Impact of Corporate Environmental Responsibility on Operating Income: Moderating Role of Regional Disparities in China
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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.
KeywordsCorporate environmental responsibility Environmental regulations Governmental environmental responsibility Institutions Operating income Regional disparities
Corporate environmental responsibility
Corporate social responsibility
Environmental Kuznets curve
Environmental protection law
Kinder Lydenberg domini
Gross domestic product
Governmental environmental responsibility
The authors thank the editors and reviewers for their valuable and insightful comments on earlier versions of the paper. This research was partially supported by the National Natural Science Foundation of China (Grant No. 71471047, Grant No. 71390522), the Humanities and Social Sciences Fund of Ministry of Education (Grant No. 15YJC630116), the Hong Kong Scholars Program (Grant No. XJ2013008), the Research Grants council of the Hong Kong Special Administrative Region of China (Grant No. PolyU 152170/14E), and the Hong Kong Polytechnic University (Grant No. G-YZ48).
Compliance with Ethical Standards
Conflict of interest
The authors declare that they have no other conflict of interest.
Research Involving Human and Animal Rights
This article does not contain any studies with human participants or animals performed by any of the authors.
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