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Firm sustainable development and stakeholder engagement: The role of government support
Author(s) -
Quan Yi,
Wu Huiying,
Li Sihai,
Ying Sammy Xiaoyan
Publication year - 2018
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.2057
Subject(s) - government (linguistics) , business , stakeholder , sustainable development , context (archaeology) , sample (material) , resource (disambiguation) , economics , paleontology , computer network , philosophy , linguistics , chemistry , management , chromatography , political science , computer science , law , biology
This study examines the sustainable development of Chinese firms in the context of the government implementing environmental policies that support green initiatives, from a resource‐based perspective. Using a sample of Chinese listed firms in the most polluting industries during the period 2001–2015, we find a positive relationship between environmental performance and economic performance. We also find that government‐controlled resources, including bank loans and tax benefits, are the mechanisms through which the effects of environmental investments are transformed into economic gains. Further analyses show that the positive association between environmental and economic performance holds for state‐owned firms only. These results indicate that although “being green” is associated with improvements in firm performance, such a strategy benefits only those firms that receive preferential treatment from the government. This study reveals that the Chinese Government, as the most influential stakeholder, plays an important role in determining the impact of environmental performance on economic performance.