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The role of party embeddedness in environmental governance of Chinese firms: An institutional perspective

Author

Listed:
  • Li, Jian
  • Zhao, Yueru
  • Yao, Nengzhi
  • Guo, Qiaozhe
  • Zhao, Lexin

Abstract

Despite the importance of political forces in corporate environmental practices, whether party embeddedness, an important form of political governance, affects corporate environmental investment remains unclear. Drawing on institutional theory, this study explores the relationship between party embeddedness and corporate environmental investment and the moderating roles of three institutional pillars (legal development, media attention and firm polluting status). Utilizing panel data of 1,652 publicly listed firms in China from 2010 to 2022, our findings indicate that the embeddedness of the Chinese Communist Party (CCP) within firms has a positive impact on their environmental investment. Moreover, the positive effect is strengthened for firms in regions with advanced legal development and those in heavily polluting status. These findings contribute to a more comprehensive understanding of political forces in environmental governance and offer important implications for promoting sustainable business practices.

Suggested Citation

  • Li, Jian & Zhao, Yueru & Yao, Nengzhi & Guo, Qiaozhe & Zhao, Lexin, 2025. "The role of party embeddedness in environmental governance of Chinese firms: An institutional perspective," Journal of Business Research, Elsevier, vol. 189(C).
    • Handle: RePEc:eee:jbrese:v:189:y:2025:i:c:s0148296324006805
    DOI: 10.1016/j.jbusres.2024.115176
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    Keywords

    Party embeddedness; Chinese Communist Party; Corporate environmental investment; Legal development; Institutional theory;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M38 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Government Policy and Regulation

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