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Journal of Business Ethics

, Volume 140, Issue 2, pp 209–223 | Cite as

How Does Environmental Corporate Social Responsibility Matter in a Dysfunctional Institutional Environment? Evidence from China

  • Zelong Wei
  • Hao Shen
  • Kevin Zheng Zhou
  • Julie Juan Li
Article

Abstract

Drawing on institutional and signaling theories, this study examines how environmental corporate social responsibility (ECSR) affects firm performance in a dysfunctional institutional environment. We extend the ECSR literature by suggesting that ECSR indirectly influences firm performance through the mediating effects of business and political legitimacy. Based on a dataset of 238 firms in China, we find that ECSR affects business and political legitimacy followed by firm performance. Moreover, legal incompleteness weakens and legal inefficiency strengthens the effects of ECSR on business and political legitimacy.

Keywords

Environmental corporate social responsibility Signaling theory Institutional theory Legitimacy Legal incompleteness Legal inefficiency 

Notes

Acknowledgments

The authors thank Prof. Alex Michalos, Prof. Thomas Clarke, and the two reviewers for their constructive comments and helpful suggestions, which enable us to substantially strengthen our paper. We would like to thank the grants from the General Research Fund from the Research Grants Council, Hong Kong SAR Government (No. HKU793613) and National Natural Science Foundation of China (Nos. 71302144 and 71102096).

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Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  • Zelong Wei
    • 1
  • Hao Shen
    • 2
  • Kevin Zheng Zhou
    • 3
  • Julie Juan Li
    • 4
  1. 1.School of ManagementXi’an Jiaotong UniversityXi’anPeople’s Republic of China
  2. 2.School of Economics and FinanceXi’an Jiaotong UniversityXi’anPeople’s Republic of China
  3. 3.Faculty of Business and EconomicsUniversity of Hong KongPokfulamHong Kong
  4. 4.College of BusinessCity University of Hong KongKowloon TongHong Kong

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