Social trust and environmental performance in China: does state ownership matter?

The recent surge in global environmental issues and climate change has stimulated researchers to explore different determinants which can reduce firms’ carbon footprints and enhance environmental performance. In particular, China – the world’s greatest polluter– has continued to attract extreme criticism due to its engagement in environmental deterioration. This research uses Chinese firms’ data from 2010 to 2017 to explore the effect of social trust on environmental performance. The findings indicate that firms in areas with high levels of trust are associated with improved environmental performance, signifying altruistic reflections in their corporate decision-making. Moreover, this nexus is (a) stronger in non-state-owned enterprises and (b) not driven by provincial development or by firms in more polluting industries. Our research offers new evidence of how social trust stimulates and inspires firms to effectively work towards a shared goal of protecting and restoring the environment by enhancing environmental performance.

China, Environmental performance, Non-state-owned firms, Polluting firms, Social trust

10.1016/j.econmod.2023.106328

0264-9993

Shahab, Yasir

b7753ae4-760a-447f-9895-10269f5dfca3

Wang, Peng

9496fb0a-1c17-4b6b-a755-aedf19bb83e5

Gull, Ammar Ali

dc69392a-4b32-4945-b298-29c6fa06d89c

Yugang, Chen

530e9f19-35b1-497b-8874-c38fc38ded8f

Ntim, Collins

1f344edc-8005-4e96-8972-d56c4dade46b

July 2023

Shahab, Yasir

b7753ae4-760a-447f-9895-10269f5dfca3

Wang, Peng

9496fb0a-1c17-4b6b-a755-aedf19bb83e5

Gull, Ammar Ali

dc69392a-4b32-4945-b298-29c6fa06d89c

Yugang, Chen

530e9f19-35b1-497b-8874-c38fc38ded8f

Ntim, Collins

1f344edc-8005-4e96-8972-d56c4dade46b

Shahab, Yasir, Wang, Peng, Gull, Ammar Ali, Yugang, Chen and Ntim, Collins (2023) Social trust and environmental performance in China: does state ownership matter? Economic Modelling, 124, [106328]. (doi:10.1016/j.econmod.2023.106328).

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Social trust and environmental performance in China: Does state ownership matter? - Accepted Manuscript

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Accepted/In Press date: 19 April 2023

e-pub ahead of print date: 21 April 2023

Published date: July 2023

Additional Information: Funding Information: The authors are grateful to the editor Prof. Sushanta Mallick and two anonymous reviewers for their constructive and helpful comments. Yasir Shahab acknowledges the financial support from the “ National Natural Science Foundation of China ” for the “Research Fund for International Young Scientists”, Grant Number: 72150410446 and “ Funds for High-Level Talents of Xijing University (2019)”, Grant Number: XJ19B02 . Yugang Chen would like to thank Guangdong Natural Science Foundation (Grant number: 2019A1515011394 ) for financial support. Publisher Copyright: © 2023 Elsevier B.V.

Keywords: China, Environmental performance, Non-state-owned firms, Polluting firms, Social trust