Firm Proactive Environmental Management Practices:stakeholder

In the past few decades,China has experienced prospering economic growth.However,the progress of industrialization and urbanization causes severe environmental problems to the country.The issue of environmental pollution induces widespread reflection:Is it possible for firms to reduce harm to the environment and the public as much as possible,while keeping strong economic growth?As Chinese government is enforcing environmental laws and regulations tightly and the public are realizing the significance of environmental protection,increased firms become aware of the importance of environmental protection,and involve in proactive environmental practices.Firms' proactive environmental practices include obtaining ISO 14001 certification,building up an environmental strategy,using reusable energy and recycling resources,adopting environment friendly processes and products,promoting environmental protection initiatives,and managing green supply chains.There are three critical issues when investigating firms' initiatives in proactive environmental management.First,is proactive environmental management effective?In other words,do the practices substaintially reduce pollutant emission and undermine operational and environmental risks?The issue emphasizes whether firms actual implement proactive environmental management practices,a subject matter to the government and the public to a great degree.Second,does it pay to adopt proactive environmental management practices?In other words,are the practices helpful for firms to cut down costs,improve profits,increase sales volumes,and enhance financial and market performance.Investigating this issue is relevant to whether firms are willing to involve in proactive environmental management,which matters to the interests of firms.Third,what is the antecedents of proactive environmental management?Namely how do firm managers perceive and interpret different stakeholder pressures and how do they pursue environmental strategy based on their value orientations?Understanding this issue is important to understand the motivations for firms to adopt proactive environmental practices.This research starts from the status quo of proactive environmental manamgent in Chinese firms.Based on multiple theoretical lenses(i.e.,resource-based view,institutional theory,signaling theory,stakeholder theory,and manager cognition theory),this research collects data from multiple sources and employs multiple methodologies to conduct three related studies.The first study investigates the impact of ISO 14001 adoption on operational risks,and the moderating roles of government monitor and slack resources.The aim of this study is to examine the effectiveness of proactive environmental management pratices and the contingent factors.Based on resource-based view and institutional theory,this study puts forward several hypotheses,collects archival data from multiple sources,including firm certifications,environmental violations,accident announcements,and annual financial reports,and uses econometric methods to test the hypotheses.Specifically,I first conduct selection analysis to compare operational risks in those that will adopt ISO 14001 certifications and those that will not.Then,I use propensity score matching to generate the treatment and the control group and conducts difference-in-difference analysis to examine the difference in operational risks before and after the treatment across the two groups.In this way,I obtain the exactly quantitative impact of ISO 14001 adoption on operational risks,while controlling for selection bias and endogeneity.After that,I use triple-difference model to examine the moderating impacts of government monitor and slack resources.Finally,I conduct a series of robustness tests including event study method to ensure that the results are reliable.This study shows that ISO 14001 adoption significantly decreases operational risks.For firms that receive government monitor,the impact of ISO 14001 adoption on causality risks is strengthened.For firms with more slack resources,the impact of ISO 14001 adoption on regulatory violation risks is weakened.The second study investigates the impact of ISO 14001 adoption on financial risks and market growth,and the moderating effects of certification time and industry pollution level.The main aim of this study is to examine whether it pays for firms to involve in proactive environmental management,and when it pays.Following the signaling theory,this study raises several hypotheses,collects secondary data from multiple sources,including firm certifications,stock market data,and annual financial reports,and uses rigorous econometric analysis methods.In detail,first I conduct selection analysis to compare financial risks and market growth before treatment in those that will adopt ISO 14001 certifications and those that will not.Then,I use propensity score matching to generate treatment and control groups and conduct difference-in-difference analysis to examine the difference in financial risks and market growth before and after the treatment across the two groups.In this way,I obtain the exactly quantitative impact of ISO 14001 adoption on financial risks and market growth,while controlling for selection bias and endogeneity.Finally,I implement a few robustness and additional tests to ensure the reliability of the results.This study finds that ISO 14001 adoption decreases financial risks and attenuates market growth.The earlier a firm obtains an ISO 14001 certification,the more financial risks and market growth are reduced by the adoption.For firms in highly polluted industries,the negative impact of ISO 14001 adoption on financial risks is strengthened,while its negative impact on market growth is weakened.The third study investigates the impact of perceived stakeholder pressures on firm environmental strategy and the moderating roles of managerial value orientations.The aim of this study is to explore the antecedents of firms' proactive environmental management from the perspective of managers.This study examines the impact of perceived stakeholder pressures and managerial value orientations on environmental strategy and analyzes their interactions.This study uses the survey method to obtain several variables:perceived stakeholder pressure,value orientations,and environmental strategy.After a series tests for variable reliability and validity,I use hierarchical regression analysis to test the hypotheses.This study shows that as antecedents to environmental strategy,perceived competitor pressure is positively related to environmental strategy,while perceived social pressure does not have an effect.Managerial legal orientation is positively related to environmental strategy,while economic orientation does not show an effect.For the moderating effects,economic orientation positively moderates the impact of competitor and social pressures on environmental strategy,while legal orientation negatively moderates the impact of competitor and social pressures on environmental strategy.The research enriches the literature about performance outcomes and antecedents of proactive environmental management,applies different theories to the research context,improves our understanding in different research fields,and provides more empirical evidences about environmental management in Chinese manufacturing firms.Specifically,the first study sheds light on the effectiveness of ISO 14001 adoption by probing into its impact on operational risks and emphasizing the people dimension in operations management research.By investigating the moderating effects of external and internal factors(i.e.,government monitor and slack resources),this study improves our understanding of the contingent effectiveness of ISO 14001 certifications.The second study extends our understanding of ISO 14001 adoption and financial performance by focusing on the underlying,intangible,and long-term benefits(i.e.,financial risks sand market growth).The second study also examines the moderating effects of certification time and industry pollution level from the perspective of signaling theory,which further enriches our understanding of when it pays to obtain ISO 14001 certifications.The third study provides empirical evidences for the antecedents of firm environmental strategy and improves our understanding from the perspective of stakeholder and managerial cognition theories.Besides,the research as a whole uses institutional theory,resource-based view,signaling theory,stakeholder theory,managerial cognition theories and so on,which contributes to the theory grounding of proactive environmental management.The research focus on Chinese manufacturing firms,collects data from multiple sources,and applies multiple methods to examine the antecedents and outcomes of proactive environmental management,which enriches our understanding about environmental management practices in Chinese firms.