Government's green grip: Multifaceted state influence on corporate environmental actions in China
Research summary: Emerging economies such as China enjoy economic expansion, but also face dramatic environmental challenges. China's government is a central actor in both stimulating economic activities and pursuing environmental protection. Drawing on panel data and indepth interviews, we exa...
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| Published in | Strategic management journal Vol. 39; no. 2; pp. 403 - 428 |
|---|---|
| Main Authors | , , |
| Format | Journal Article |
| Language | English |
| Published |
Chichester, UK
John Wiley & Sons Ltd
01.02.2018
John Wiley & Sons, Ltd Wiley Periodicals Inc |
| Subjects | |
| Online Access | Get full text |
| ISSN | 0143-2095 1097-0266 |
| DOI | 10.1002/smj.2714 |
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| Abstract | Research summary: Emerging economies such as China enjoy economic expansion, but also face dramatic environmental challenges. China's government is a central actor in both stimulating economic activities and pursuing environmental protection. Drawing on panel data and indepth interviews, we examined the influence of the Chinese state at multiple levels on the environmental actions of publicly listed firms. The results show that corporate environmental actions follow an inverted U-shape as control of environmental practices moves from the central government to the most decentral administrative level. This curvilinear relationship is positively moderated by the stringency of environmental regulation and negatively moderated by environmental monitoring capacity. We conclude that state influence on corporate environmental actions in China is multifaceted and subject to "policy-policy decoupling." Managerial summary: As China's environmental awareness is growing, the country's government is increasingly concerned with the question as to how it can improve the environmental performance of the firms it controls. Our evidence shows the concurrence of two contravening government influences on corporate environmental practices: a performance-enhancing effect of the regulatory pressure by multiple authorities and a performancediminishing effect of the autonomy enjoyed by local governments. Both the most centrally and the most decentrally controlled firms in China show significantly weaker environmental performance than those controlled by intermediary levels of government. The stringency of sectorial environmental regulation and environmental monitoring capacity affect the strength of the Chinese government's green grip. |
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| AbstractList | Research summary: Emerging economies such as China enjoy economic expansion, but also face dramatic environmental challenges. China's government is a central actor in both stimulating economic activities and pursuing environmental protection. Drawing on panel data and in‐depth interviews, we examined the influence of the Chinese state at multiple levels on the environmental actions of publicly listed firms. The results show that corporate environmental actions follow an inverted U‐shape as control of environmental practices moves from the central government to the most decentral administrative level. This curvilinear relationship is positively moderated by the stringency of environmental regulation and negatively moderated by environmental monitoring capacity. We conclude that state influence on corporate environmental actions in China is multifaceted and subject to “policy‐policy decoupling.”Managerial summary: As China's environmental awareness is growing, the country's government is increasingly concerned with the question as to how it can improve the environmental performance of the firms it controls. Our evidence shows the concurrence of two contravening government influences on corporate environmental practices: a performance‐enhancing effect of the regulatory pressure by multiple authorities and a performance‐diminishing effect of the autonomy enjoyed by local governments. Both the most centrally and the most decentrally controlled firms in China show significantly weaker environmental performance than those controlled by intermediary levels of government. The stringency of sectorial environmental regulation and environmental monitoring capacity affect the strength of the Chinese government's green grip. Research summary: Emerging economies such as China enjoy economic expansion, but also face dramatic environmental challenges. China's government is a central actor in both stimulating economic activities and pursuing environmental protection. Drawing on panel data and indepth interviews, we examined the influence of the Chinese state at multiple levels on the environmental actions of publicly listed firms. The results show that corporate environmental actions follow an inverted U-shape as control of environmental practices moves from the central government to the most decentral administrative level. This curvilinear relationship is positively moderated by the stringency of environmental regulation and negatively moderated by environmental monitoring capacity. We conclude that state influence on corporate environmental actions in China is multifaceted and subject to "policy-policy decoupling." Managerial summary: As China's environmental awareness is growing, the country's government is increasingly concerned with the question as to how it can improve the environmental performance of the firms it controls. Our evidence shows the concurrence of two contravening government influences on corporate environmental practices: a performance-enhancing effect of the regulatory pressure by multiple authorities and a performancediminishing effect of the autonomy enjoyed by local governments. Both the most centrally and the most decentrally controlled firms in China show significantly weaker environmental performance than those controlled by intermediary levels of government. The stringency of sectorial environmental regulation and environmental monitoring capacity affect the strength of the Chinese government's green grip. Research summary: Emerging economies such as China enjoy economic expansion, but also face dramatic environmental challenges. China's government is a central actor in both stimulating economic activities and pursuing environmental protection. Drawing on panel data and in‐depth interviews, we examined the influence of the Chinese state at multiple levels on the environmental actions of publicly listed firms. The results show that corporate environmental actions follow an inverted U‐shape as control of environmental practices moves from the central government to the most decentral administrative level. This curvilinear relationship is positively moderated by the stringency of environmental regulation and negatively moderated by environmental monitoring capacity. We conclude that state influence on corporate environmental actions in China is multifaceted and subject to “policy‐policy decoupling.” Managerial summary: As China's environmental awareness is growing, the country's government is increasingly concerned with the question as to how it can improve the environmental performance of the firms it controls. Our evidence shows the concurrence of two contravening government influences on corporate environmental practices: a performance‐enhancing effect of the regulatory pressure by multiple authorities and a performance‐diminishing effect of the autonomy enjoyed by local governments. Both the most centrally and the most decentrally controlled firms in China show significantly weaker environmental performance than those controlled by intermediary levels of government. The stringency of sectorial environmental regulation and environmental monitoring capacity affect the strength of the Chinese government's green grip. Video Abstract Research summary: Emerging economies such as China enjoy economic expansion, but also face dramatic environmental challenges. China's government is a central actor in both stimulating economic activities and pursuing environmental protection. Drawing on panel data and in‐depth interviews, we examined the influence of the Chinese state at multiple levels on the environmental actions of publicly listed firms. The results show that corporate environmental actions follow an inverted U‐shape as control of environmental practices moves from the central government to the most decentral administrative level. This curvilinear relationship is positively moderated by the stringency of environmental regulation and negatively moderated by environmental monitoring capacity. We conclude that state influence on corporate environmental actions in China is multifaceted and subject to “policy‐policy decoupling.” Managerial summary: As China's environmental awareness is growing, the country's government is increasingly concerned with the question as to how it can improve the environmental performance of the firms it controls. Our evidence shows the concurrence of two contravening government influences on corporate environmental practices: a performance‐enhancing effect of the regulatory pressure by multiple authorities and a performance‐diminishing effect of the autonomy enjoyed by local governments. Both the most centrally and the most decentrally controlled firms in China show significantly weaker environmental performance than those controlled by intermediary levels of government. The stringency of sectorial environmental regulation and environmental monitoring capacity affect the strength of the Chinese government's green grip. Video |
| Author | Wang, Ruxi Wijen, Frank Heugens, Pursey P.M.A.R. |
| Author_xml | – sequence: 1 givenname: Ruxi surname: Wang fullname: Wang, Ruxi – sequence: 2 givenname: Frank surname: Wijen fullname: Wijen, Frank – sequence: 3 givenname: Pursey P.M.A.R. surname: Heugens fullname: Heugens, Pursey P.M.A.R. |
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| Copyright | Copyright © 2017 John Wiley & Sons Ltd. Copyright © 2017 John Wiley & Sons, Ltd. Copyright © 2018 John Wiley & Sons, Ltd. |
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| DOI | 10.1002/smj.2714 |
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| Snippet | Research summary: Emerging economies such as China enjoy economic expansion, but also face dramatic environmental challenges. China's government is a central... |
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| SubjectTerms | Action Autonomy Central government China Companies corporate environmentalism environmental actions Environmental monitoring Environmental performance environmental policy Environmental protection Environmental regulations government power Influence Local government Panel data RESEARCH ARTICLE |
| Title | Government's green grip: Multifaceted state influence on corporate environmental actions in China |
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