An Economic and Environmental Bi-Performance Objective Incentive Model for a Firm

After discussing the features of a firm´s economical performance and environmental performance, the relationship between them, and the running requirement, this paper builds up an economic and environmental bi-performance objective incentive model for a firm with principal/agent theory. Economical performance is inside-driven, and environmental performance is outside-driven. Both local government and firms are required to act with the results of model analyzing. An outside incentive or monitoring mechanism should be built for a firm´s environmental behaviors.