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Opportunism Motivation of Environmental Protection Activism and Corporate Governance: An Empirical Study from China

Author

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  • Shengnan Li

    (College of Management and Economics, Tianjin University, Tianjin 300072, China)

  • Jianbo Niu

    (China Academy of Corporate Governance, Nankai University, Tianjin 300071, China
    Business School, Nankai University, Tianjin 300071, China
    Collaborative Innovation Center for China Economy, Nankai University, Tianjin 300071, China)

  • Sang-Bing Tsai

    (Zhongshan Institute, University of Electronic Science and Technology of China, Zhongshan 528400, China
    Research Center for Environment and Sustainable Development of China Civil Aviation, Civil Aviation University of China, Tianjin 300300, China)

Abstract

In the study of environmental protection issues for more than forty years, research on the impact of financial performance on environmental protection has been one of the important branches. In the framework of principal-agent theory, this paper explores the opportunism motives in a company’s environmental protection activism and the moderating role of corporate governance using the data of Chinese listed companies from 2005 to 2016. The study finds that: (1) the company’s environmental protection activism is driven by the opportunist motives of policymakers who want to mask their inability; and (2) environmental protection activism does not enhance the company’s future performance and value creation capability. Further studies find that corporate governance mechanisms play different moderating roles. Fund Shareholders play a positive governance role and reduce the correlation between financial performance and environmental protection activism. However, independence of the board of directors intensifies the opportunist motives. This paper provides new theoretical explanations for environmental protection decision-making, provides novel enlightenment for the protection of environmental protection policies in developing countries and regions.

Suggested Citation

  • Shengnan Li & Jianbo Niu & Sang-Bing Tsai, 2018. "Opportunism Motivation of Environmental Protection Activism and Corporate Governance: An Empirical Study from China," Sustainability, MDPI, vol. 10(6), pages 1-18, May.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:6:p:1725-:d:148901
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    2. Libin Han & Chong Peng, 2022. "Do the Age and Gender of Chairperson Affect Firms’ Environmental Protection Investment?," IJERPH, MDPI, vol. 19(21), pages 1-12, November.
    3. Ionica Oncioiu & Delia-Mioara Popescu & Elena Anghel & Anca-Gabriela Petrescu & Florentina-Raluca Bîlcan & Marius Petrescu, 2020. "Online Company Reputation—A Thorny Problem for Optimizing Corporate Sustainability," Sustainability, MDPI, vol. 12(14), pages 1-13, July.
    4. Xinfeng Jiang & Ahsan Akbar, 2018. "Does Increased Representation of Female Executives Improve Corporate Environmental Investment? Evidence from China," Sustainability, MDPI, vol. 10(12), pages 1-19, December.
    5. Lei Yu & Daojuan Wang & Qi Wang, 2018. "The Effect of Independent Director Reputation Incentives on Corporate Social Responsibility: Evidence from China," Sustainability, MDPI, vol. 10(9), pages 1-15, September.

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