Environmental Management Under Subnational Institutional Constraints

Shujun Ding, Chunxin Jia, Zhenyu Wu, Wenlong Yuan

Journal of Business Ethics · 2016 · Volume 134 · Issue 4

Abstract

This study uses the institutional perspective to examine the interaction effects between the subnational institutional context and firm-level parameters on corporate environmental behaviors, based on a unique cross-sectional data set of private firms compiled from three different sources in China. Our results suggest that both enforcement stringency of environmental regulations at the provincial-level and private firms’ foreign ownership negatively affect compensation fees, which are levies charged for firms’ emissions. Enforcement stringency also moderates the firm-level relationship between foreign ownership and compensation fees, but such a cross-level moderating effect holds only for private firms with non-HMT (Hong Kong, Macau, or Taiwan) investments.

Keywords

Foreign ownership, Environmental management, Institutional constraints, Private firms, Subnational

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