Abstract
This study investigates how the interplay of mandatory environmental pressure from governments and voluntary pressure self-imposed by firms themselves influences the environmental performance of the firm at different stages of the CEO’s career horizon. The result reveals that there is only a synergistic effect between mandatory and voluntary environmental pressures when the CEO’s career horizon is low. We argue that this phenomenon could be explained by the fact that the motivation to improve the firm environmental performance decreases as the CEO’s career horizon shortens because of the associated economic short-termism. Theoretically, this study builds on the Awareness-Motivation-Capability framework to provide a social cognitive model that links mandatory environmental pressure, voluntary environmental pressure, CEOs’ career horizon and the environmental performance of the firm.
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