Environmental policy, environmental performance, and financial distress in China: Do top management team characteristics matter?

Abstract

This study investigates the effect of environmental performance that is driven by good environmental policies, regulations, and management on firm's financial distress and, consequently, ascertains the extent to which top management teams' (TMTs') characteristics can moderate the environmental performance–financial distress nexus in China using 749 firms over the 2009–2014 period (i.e., generating over 3,000 individual observations). Our findings are twofold. First, our results indicate that increased environmental performance that is driven by good environmental policies tends to strategically reduce the extent of firm financial distress. Second, this nexus is moderated by TMT gender diversity, foreign exposure, and political connection. We interpret our findings within neo‐institutional, upper echelons, and risk management theoretical perspectives. The findings are robust to the use of alternative measures of financial distress, estimation techniques, and endogeneity problems.

Exploring factors relating to extinction disclosures: What motivates companies to report on biodiversity and species protection?

“…Prior studies explain greenwashing by noting that unscrupulous companies may misreport their CSR to capitalise on the face value of CSR reports (Lyon & Maxwell, 2011;Zijl, Wostmann, & Maroun, 2017) to influence stakeholders' perceptions and gain legitimacy. In this vein, Shahab, Ntim, Chengang, Ullah, andFosu (2018, p. 1639) explain "CSR performance acts as a risk-mitigating tool by providing an insurance cover-age and changing the firms adverse scenario into a favourable one." Firms aim to legitimise company activity by implementing environmental strategies, comply with regulative pressures and regulations to help them maintain and gain organisational legitimacy (Haque & Ntim, 2018).…”

Board gender diversity and environmental performance: An industries perspective

“…Two topics that are front of mind of many large firms today are gender diversity in the boardroom (Amran, Lee, & Devi, ; Bravo & Reguera‐Alvarado, ; Galbreath, ; Glass, Cook, & Ingersoll, ; Horbach & Jacob, ; Jizi, ; Pucheta‐Martínez & Bel‐Oms, ) and environmental performance (Boiral, Heras‐Saizarbitoria, & Brotherton, ; Danso, Adomako, Amankwah‐Amoah, Owusu‐Agyei, & Konadu, ; Elmagrhi, Ntim, Elamer, & Zhang, ; Henry, Buyl, & Jansen, ; Pucheta‐Martínez, Gallego‐Álvarez, & Bel‐Oms, ; Shahab, Ntim, Chengang, Ullah, & Fosu, ; Zou, Xie, Qi, & Yang, ). Through our research, we show how these two themes are related and that firms could improve their environmental performance with a gender diversified board, especially in more environmentally impacting (resource extractive) industries.…”

Corporate environmental performance, environmental management and firm risk

“…In the past decades, CEP has attracted considerable interest from not only policy makers but also researchers (e.g., Dobler, Lajili, & Zéghal, 2014;Elmagrhi, Ntim, Elamer, & Zhang, 2019;Horvathova, 2012;Ren, He, Zhang, & Chen, 2019;Shahab, Ntim, Chengang, Ullah, & Fosu, 2018;Trumpp, Endrikat, Zopf, & Guenther, 2015;Trumpp & Guenther, 2017). A great number of studies have focused on examining the association between CEP and corporate financial performance (CFP).…”

“…Second, previous studies have examined environmental performance and responsibility as a single or monodimensional construct (e.g., Dobler et al, 2014;Fujii et al, 2013;Gatimbu et al, 2018;Shahab et al, 2018;Trumpp & Guenther, 2017). Despite a consensus on the multidimensional nature of CEP, few studies on CEP have taken this into account.…”