Research on the Impact of Party Organization Embedding on the Corporate Environmental Performance

Abstract

The party organization’s participation in the governance of state-owned enterprises can affect corporate environmental performance. First of all, in terms of stakeholders’ theories, enterprises should not pursue the interests of shareholders in the traditional sense, but to maximize the overall interests of stakeholders. As a special group in China’s corporate governance, the party organization has the right to participate in the decision of major environmental matters on the corporate. At the same time, the party organization urges enterprises to support the policies of the party, play an important role in supervising the environmental performance of the enterprise, and then maintain the overall interests of the stakeholders. Secondly, under the framework of organizational legitimacy, the party organization embedded mainly through the supervision effect and checks and balance effects to improve the environmental performance of the enterprise. Therefore, this paper studies the relationship between party organizations participating in the governance of state-owned enterprises and corporate environmental performance. This paper argues that the "two-way entry" of the party organization has a positive correlation with the corporate environmental performance, that is, the higher the "two-way entry" of party organizations participating in the governance of state-owned enterprises, the higher the environmental performance of state-owned enterprises will be improved accordingly. Also, after further robustness tests, this conclusion is still established.