Abstract
Using Chinese listed companies as research setting, this paper constructs a measure of corporate competing culture through textual analysis on firms’ management discussion and analysis (MD&A) disclosures, and examines the impact of corporate competing culture on environmental investment. The results show that competing culture has a significant and positive impact on firms’ environmental investment, and the results remain robust to a battery of robustness tests. Moreover, the mediating analysis indicates that competing culture promotes corporate environmental investment through enhancing firms’ internal control quality. Furthermore, the heterogeneity results show that the positive impact of corporate competing culture on environmental investment is more pronounced in firms with larger size, stronger corporate governance, in high-polluting industry, and located in less developed regions. Our findings shed light on the importance of corporate competing culture and provide practical implications for corporate sustainable development.
Highlights
Corporate culture is a set of norms and values that are widely shared and strongly held within an organization (Guiso et al, 2015)
The results show that the impact of corporate competing culture on environmental investment is positive and statistically significant at the 1% significance level, indicating that corporate competing culture significantly promotes environmental investment
Using Chinese listed firms from 2010 to 2019 as the research setting, this paper develops a quantitative measure of corporate competing culture through textual analysis and examines the impact of corporate competing culture on environmental investment
Summary
Corporate culture is a set of norms and values that are widely shared and strongly held within an organization (Guiso et al, 2015). In terms of corporate culture, Fiordelisi et al (2019) find that corporate culture plays a guiding role in the strategic decision making of environmental investment. Corporate culture, as an internal factor, could play an important role in firms’ strategic decision-making process of environmental investment (Lu and Wang, 2021). Based on the management discussion and analysis (MD&A) disclosures of Chinese listed companies, this paper uses text mining technique to construct a quantitative measure of corporate competing culture and examines the impact of competing culture on corporate environmental investment. The results show that corporate competing culture has a significant and positive impact on environmental investment This positive impact is more pronounced in companies with larger size, stronger corporate governance, in high-polluting industry, and located in less developed regions. Section “Literature Review” reviews related literature on corporate competing culture and environmental investment, followed by data and variable descriptions in section “Research Design.” Section “Results” shows the results and section “Conclusion” concludes the paper
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