Impact of Corporate Environmental Responsibility on Operating Income: Moderating Role of Regional Disparities in China

Wing Yan Wong, Xin Miao, Shuang Cui, Yanhong Tang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

39 Citations (Scopus)

Abstract

Although the same environmental regulations apply to all regions in China, legal enforcement can be different due to local economic development priorities. There is still a lack of knowledge about how regional disparities affect the operating performance results of the implementation of corporate environmental management practices, thus providing little information for foreign companies when they invest and develop their production base in China. To fill this research gap, this paper collects data from the Fortune 500 Chinese firms to investigate the moderating role of regional disparities in affecting the performance results of corporate environmental management efforts based on the institutional theory. The disclosed corporate environmental responsibility (CER) practices serve as proxy to represent corporate environmental management practices. Content analysis approach was applied to collect and analyze CER practices published in the corporate reports of Chinese manufacturers. The results show that CER has a positive impact on operating income, while regional disparities influence the relationship between CER and corporate operating income. Specifically, CER and operating income are positively related in Eastern China; on the contrary, they are negatively related in Western China. This paper adds to the body of knowledge about environmental discrepancies in the same emerging economy, and provides insights for systematic consideration in terms of the issues of government environmental regulations and corporate environmental strategies.
Original languageEnglish
Pages (from-to)363-382
Number of pages20
JournalJournal of Business Ethics
Volume149
Issue number2
DOIs
Publication statusPublished - 1 May 2018

Keywords

  • Corporate environmental responsibility
  • Environmental regulations
  • Governmental environmental responsibility
  • Institutions
  • Operating income
  • Regional disparities

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Law

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