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The green reputation: Corporate culture and environmental reputation risk

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  • Wang, Xinyu
  • Zhao, Jing

Abstract

This study examines the corporate culture outcomes over the Environmental Reputation Risk (ERR). We show that firms with a strong corporate culture are associated with a lower ERR. In particular, the relationship is stronger among corporate cultural values that emphasize innovation, respect, and product and service quality, and it is more significant among firms with higher managerial opportunistic incentives. Moreover, a strong culture is associated with a lower environmental cost. Overall, our results suggest that corporate culture plays a disciplinary role in preventing managers from conducting environmentally irresponsible activities.

Suggested Citation

  • Wang, Xinyu & Zhao, Jing, 2023. "The green reputation: Corporate culture and environmental reputation risk," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006190
    DOI: 10.1016/j.frl.2023.104247
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    More about this item

    Keywords

    Corporate culture; Environmental reputation risk; Environmental cost;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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