Abstract
This paper combines determinants of corporate environment performance (CEP) and the effect of CEP on corporate value together, namely how to motivate firms to conduct environmental protection from the perspective of enhancing firm value. Using a sample of 204 observations of listed corporations in Chinese pollution-intensive industries over the period of 2013–2014, we observed that: (1) compared to investment in a single stakeholder, combinations of multidimensional stakeholders are more likely to affect CEP, and the path is not unique; (2) employees have a positive role, but investors, the community, suppliers, and customers have negative roles; (3) among three patterns for high CEP, both high investment in employees and low investment in the community, suppliers and customers will not detract from firm value, i.e., a win-win outcome; (4) among three patterns for low CEP, one will enhance firm value; and (5) the investor should be seen as an important breakthrough in corporate environmental protection. Such conclusions have stronger promotional value for other emerging countries where corporate social and environmental responsibility is still in the initial stage and the traditional corporate government mode still has a leading position.
Highlights
Global environmental degradation is a side-effect of economic development, which is why achieving a balance between economic development and environmental protection has attracted significant public concern [1,2]
The results found that the employee is in a core position to guarantee high corporate environmental performance (CEP) and that the investor is in a core position to guarantee a high firm value, which provides appropriate classifications of stakeholders rather than traditional elements in primary and secondary stakeholders
We can infer that a single stakeholder cannot lead to high CEP, and this conforms to Hypothesis 1: namely, a single stakeholder cannot result in the formation of a corporate environmental strategy
Summary
Global environmental degradation is a side-effect of economic development, which is why achieving a balance between economic development and environmental protection has attracted significant public concern [1,2]. The corporate value mainly refers to the corporate market value [8], since it has less discretionary space, compared to the accounting-based variable [9]. It can better predict firm performance in the long run, testing whether a certain corporate environmental strategy is sustainable [10]. The expectation of a win-win situation between corporate environmental performance (CEP) and corporate value is an additional incentive to make headway in the pro-environmental change process [11]. Our paper is determined to answer how to obtain a win-win outcome between CEP and corporate value
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