Abstract
As global environmental problems become increasingly severe, corporate social (environmental) responsibility has become a hot topic in research, but there is still a lack of clear understanding of corporate environmental irresponsibility behavior and the driving factors behind this behavior. Our research aims to reveal the factors affecting corporate environmental irresponsibility from both internal and external perspectives. Inside enterprises, financial constraints will affect the degree of capital adequacy and thus affect the environmental behavior of enterprises. Externally, the fulfillment of corporate environmental responsibility will be affected by external regulatory pressure. Taking 399 A-share listed companies in China’s heavily polluting industries as the research objects, this paper empirically analyzes the influence paths and internal mechanisms of financial constraints and regulatory distance on corporate environmental irresponsibility, and it further divides regulatory distance into physical regulatory distance and power regulatory distance. This paper’s findings show that both financial constraints and physical regulatory distance were positively correlated with corporate environmental irresponsibility in China, and that the positive correlation between physical regulatory distance and corporate environmental irresponsibility was more significant in non-state-owned enterprises. In addition, financial constraints and regulatory distance have a complementary effect on corporate environmental irresponsibility. These findings can reduce the environmental risks posed by enterprises and help them to avoid environmental irresponsibility.
Highlights
At the current stage of rapid economic development in China, domestic enterprises are presented with many external development opportunities, and most of them have a strong impulse to expand
The study found that corporate financial constraints and environmental irresponsibility were significantly positively correlated, physical regulatory distance was significantly positively correlated with corporate environmental default, but that power regulatory distance failed the significance test
The grouping results show that the positive correlation between financial constraints and corporate environmental failure was more significant in non-state-owned enterprises than in state-owned enterprises, and the positive correlation between the physical regulatory distance and corporate environmental failure was only significant in non-state-owned enterprises
Summary
At the current stage of rapid economic development in China, domestic enterprises are presented with many external development opportunities, and most of them have a strong impulse to expand. With increase in regulatory distance, regulators need to spend more time, energy, money, and other resources to collect relevant information on listed companies, which weakens the ability of regulators to obtain corporate environmental protection information. The main research questions of this paper are: How do financial constraints and regulatory distance affect corporate environmental misconduct? How does executive gender diversity mediate the relationship among financial constraints, regulatory distance, and corporate environmental irresponsibility? This study contributes to existing literature in several ways: First, we add to the limited extant literature by focusing on the association among financial constraints, regulatory distance, and corporate environmental irresponsibility. We introduce the conclusions, meanings, and limitations of the research, and we offer some suggestions for future research
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