Abstract
The purpose of this study is to determine the ways in which the religiosity of a firm’s CEO affects his/her firm’s green initiatives. Previous research on corporate green initiatives offers limited insights into the micro-foundations of such behaviors. From an upper echelon perspective, we argue that CEOs with religiosity are more likely to engage in corporate green initiatives, because they hold higher perceptions about being monitored to fulfill religious role expectations, driving individuals to maintain public goods. Furthermore, this positive impact of CEOs’ religiosity is weaker when he/she uses participative decision-making processes. We examine a sample of 1184 small- and medium-sized manufacturers in the Tokyo metropolitan area. Using latent class modeling, we classify respondent CEOs’ religious belief systems into eight classes and find general support for the hypothesized relationships. Our findings contribute to the upper echelon and corporate social responsibility literature by revealing the missing link between a CEO’s religiosity and his/her firm’s corporate green initiatives.
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Notes
We tested the statistical difference between CEOs who responded to all seven religious concepts and those who did not, using firm age and number of employees. The fact that these observables are not significantly different between the two groups is suggestive of the absence of systematic differences in unobservable factors.
The results of LCA imply that eight classes are the statistically optimal number to explain the observed patterns in our data set. Therefore, it should be emphasized that a model with eight classes does not necessary apply to CEOs in other countries, other Japanese regions, and general Japanese individuals.
To detect common method variance (CMV) in our data, we used Harman’s single factor test. Although this test is associated with several problems (Podsakoff et al. 2003), it is widely used. We note this fact for the sake of completeness. Our exploratory factor analysis shows that the first factor accounts for 30.2% of covariance, which does not exceed the commonly accepted threshold of 50% (Tehseen et al. 2017). This result indicates that CMV may exist at a relatively lower to moderate level in our data set. A recent study indicated that a relatively high level of CMV must be present to bias true relationships (Fuller et al. 2016). Therefore, we consider that CMV is not a pervasive issue in our study and there is relatively low potential for common method bias due to CMV in our study.
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We appreciate the comments and suggestions from the participants at Hitotsubashi Institute of Innovation Research, Summer School 2017 and the 2018 Chicago Academy of Management Annual Meeting Program.
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The authors received financial support from the Japan Society for the Promotion of Science KAKENHI with grant number JP 24243037.
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Iguchi, H., Katayama, H. & Yamanoi, J. CEOs’ religiosity and corporate green initiatives. Small Bus Econ 58, 497–522 (2022). https://doi.org/10.1007/s11187-020-00427-8
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DOI: https://doi.org/10.1007/s11187-020-00427-8