The influence mechanism of multi-government environmental regulation synergy on corporate environmental responsibility

The United Nations Development Programme (UNDP) calls for enhanced global efforts to achieve the 17 sustainable development goals by 2030, highlighting the crucial role of corporate environmental responsibility (CER) in advancing global sustainability. As a significant participant, China is leveraging its government-led environmental regulation (ER) system, which has a multi-level and multi-sectoral structure, to effectively combat climate change. However, the effect of this ER system, especially collaborative efforts among multiple government subjects, on CER remains unknown. Thus, this paper is the first attempt to investigate the effect and underlying mechanisms of multi-government ER synergy on CER from the perspective of government subject synergy. Using a dataset of Chinese A-share listed manufacturing firms from 2010 to 2021, this study finds the following. First, multi-government ER synergy boosts CER. Direct ER synergy, stemming from joint policy-making across departments, encourages CER in end-of-pipe governance. Indirect ER synergy, arising from administrative hierarchy constraints among multi-level governments, fosters CER in front-end governance. Second, financing constraints and executives’ attention to CER are two key channels through which multi-government ER synergy influences CER. Third, firms with political connections, those in heavily polluting industries, or those located in central and western regions adopt more proactive CER strategies under multi-government ER synergy. This paper expands research on government collaborative governance from the regional macro-perspective to the micro-firm level, providing valuable insights for countries worldwide, particularly emerging economies that share similar characteristics with China, to contain rapidly growing environmental challenges and advance global sustainability.