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Environmental performance, sustainability, governance and financial performance: Evidence from heavily-polluting industries in China

Environmental performance, sustainability, governance and financial performance: Evidence from heavily-polluting industries in China
Environmental performance, sustainability, governance and financial performance: Evidence from heavily-polluting industries in China

This study seeks to contribute to the existing business strategy and the environment literature by examining the effect of governance structures on Chinese firms' environmental performance, and consequently ascertain the extent to which the financial performance–environmental performance nexus is moderated by governance mechanisms. Using a sample of Chinese companies from heavily polluting industries over a 5-year period, our baseline findings suggest that, on average, board size and governing board meetings are positively associated with Chinese firms' environmental performance, whilst board independence and gender diversity have positive, but insignificant association with firms' environmental performance. Our evidence suggests further that the examined internal governance mechanisms have a mixed moderating effect on the link between financial performance and environmental performance. Our findings have important implications for company executives, environmental activists, policy-makers, and regulators. Our results support insights drawn from agency, resource dependence, stakeholder, and legitimacy theories.

Environmental management and sustainability, Environmental performance, Environmental pollution, Financial Performance, Governance
0964-4733
2313-2331
Nguyen, Thi Hong Hanh
8deda4df-540d-4d80-aa86-b92b3c2ae18d
Elmagrhi, Mohamed H.
4961f329-8a2d-47c5-83ee-34fc058030fe
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Wu, Yue
7dc7aa28-76a1-413e-b43e-48e194e9075c
Nguyen, Thi Hong Hanh
8deda4df-540d-4d80-aa86-b92b3c2ae18d
Elmagrhi, Mohamed H.
4961f329-8a2d-47c5-83ee-34fc058030fe
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Wu, Yue
7dc7aa28-76a1-413e-b43e-48e194e9075c

Nguyen, Thi Hong Hanh, Elmagrhi, Mohamed H., Ntim, Collins and Wu, Yue (2021) Environmental performance, sustainability, governance and financial performance: Evidence from heavily-polluting industries in China. Business Strategy and the Environment, 30 (5), 2313-2331. (doi:10.1002/bse.2748).

Record type: Article

Abstract

This study seeks to contribute to the existing business strategy and the environment literature by examining the effect of governance structures on Chinese firms' environmental performance, and consequently ascertain the extent to which the financial performance–environmental performance nexus is moderated by governance mechanisms. Using a sample of Chinese companies from heavily polluting industries over a 5-year period, our baseline findings suggest that, on average, board size and governing board meetings are positively associated with Chinese firms' environmental performance, whilst board independence and gender diversity have positive, but insignificant association with firms' environmental performance. Our evidence suggests further that the examined internal governance mechanisms have a mixed moderating effect on the link between financial performance and environmental performance. Our findings have important implications for company executives, environmental activists, policy-makers, and regulators. Our results support insights drawn from agency, resource dependence, stakeholder, and legitimacy theories.

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Accepted_31_January_2021_BSE - Accepted Manuscript
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Accepted/In Press date: 31 January 2021
e-pub ahead of print date: 9 February 2021
Keywords: Environmental management and sustainability, Environmental performance, Environmental pollution, Financial Performance, Governance

Identifiers

Local EPrints ID: 446269
URI: http://eprints.soton.ac.uk/id/eprint/446269
ISSN: 0964-4733
PURE UUID: 42126456-bad1-43a0-83a2-9cc691226f7e
ORCID for Thi Hong Hanh Nguyen: ORCID iD orcid.org/0000-0002-0738-1606
ORCID for Collins Ntim: ORCID iD orcid.org/0000-0002-1042-4056

Catalogue record

Date deposited: 02 Feb 2021 17:52
Last modified: 26 Nov 2021 02:27

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Contributors

Author: Thi Hong Hanh Nguyen ORCID iD
Author: Mohamed H. Elmagrhi
Author: Collins Ntim ORCID iD
Author: Yue Wu

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