Shahab, Yasir and Hussain, Tanveer and Wang, Peng and Zhong, Ma and Kumar, Satish (2023) Business groups and environmental violations: Evidence from China. International Review of Financial Analysis, 85. p. 102459. DOI https://doi.org/10.1016/j.irfa.2022.102459
Shahab, Yasir and Hussain, Tanveer and Wang, Peng and Zhong, Ma and Kumar, Satish (2023) Business groups and environmental violations: Evidence from China. International Review of Financial Analysis, 85. p. 102459. DOI https://doi.org/10.1016/j.irfa.2022.102459
Shahab, Yasir and Hussain, Tanveer and Wang, Peng and Zhong, Ma and Kumar, Satish (2023) Business groups and environmental violations: Evidence from China. International Review of Financial Analysis, 85. p. 102459. DOI https://doi.org/10.1016/j.irfa.2022.102459
Abstract
lthough, in the modern era, stakeholders put pressure on firms to engage in environmental friendly practices, yet collaborative arrangements in the shape of business group affiliations may prove a double-edged sword. Accordingly, this study examines the impact of such collaborative arrangements on firm's environmental violations. On one hand, this affiliation can better pursue environmental policies and regulations because of their higher political or social visibility and reduce environmental infractions. Conversely, higher political legitimacy may derive from engaging in environmental violations. Using a unique sample from China comprising 6860 firm-year observations over the 2010 to 2020 time period, we find that business group affiliation increases environmental violations, implying that stronger political legitimacy provides them relaxation in strictly following environmental regulations in comparison to standalone firms. We also find that this nexus is more pronounced when the affiliated firms have poor shareholder and board monitoring. These findings are helpful for policymakers/regulators concerning the initiative's evaluation regarding sustainable development and ecological protection.
Item Type: | Article |
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Uncontrolled Keywords: | Business groups; Environmental violations; Political legitimacy; Board monitoring |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 02 Mar 2023 13:45 |
Last Modified: | 26 May 2024 01:00 |
URI: | http://repository.essex.ac.uk/id/eprint/34992 |
Available files
Filename: Business group.pdf
Licence: Creative Commons: Attribution-Noncommercial-No Derivative Works 4.0