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Tournament incentives and environmental performance: the role of green innovation

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Abstract

Since sustainable development concerns emerged, researchers have studied which environmental regulations motivate companies to improve their environmental performance. Environmental goals are best achieved by either changing people’s behavior or modifying technology. Thus, this study contributes to the existing literature on corporate governance and social and environmental accountability by examining the impact of CEO’s tournament incentives (TI) on Chinese firms’ environmental reporting and performance. Furthermore, the study consequently establishes how much tournament incentives and environmental practices connection are explained with green innovation. Using the panel data regression model, the study finds that CEOs’ tournament incentives are favorably connected with Chinese enterprises’ environmental performance and negatively with environmental reporting over 10 years (2010–2019). Furthermore, our findings suggest that green innovation positively mediates the TI environmental performance nexus. The study provided excellent implications for Chinese society, which can lead to achieving a “greener GDP” and a “harmonious society” for which China is dreaming and striving. The study findings have significant implications for stakeholders, including CEOs’ policymakers, corporate regulators, environmentalists, and policymakers.

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Funding

This research is funded by the National Natural Science Foundation of China (71972153).

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Authors and Affiliations

  1. School of Management Science and Engineering, Nanjing University of Information Science and Technology, Nanjing, 210044, China

    Shahid Ali & Junfeng Jiang

  2. Faculty of Business, Sohar University, Sohar, Oman

    Ramiz ur Rehman

  3. Lahore Business School, The University of Lahore, Lahore, Pakistan

    Ramiz ur Rehman

  4. Asia-Australia Business College, Liaoning University, Shenyang, 110136, China

    Muhammad Kaleem Khan

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  1. Shahid Ali
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  2. Junfeng Jiang
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  3. Ramiz ur Rehman
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Contributions

Shahid Ali: writing — initial draft, writing — analysis, visualization, and validation

Junfeng Jiang: review, editing, and supervision

Ramiz ur Rehman: writing literature review, editing, and methodology

Muhammad Kaleem Khan: witing literature review and editing

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Correspondence to Junfeng Jiang.

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Ali, S., Jiang, J., Rehman, R.u. et al. Tournament incentives and environmental performance: the role of green innovation. Environ Sci Pollut Res 30, 17670–17680 (2023). https://doi.org/10.1007/s11356-022-23406-w

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