IDEAS home Printed from https://ideas.repec.org/a/wly/corsem/v27y2020i4p1605-1616.html
   My bibliography  Save this article

Does natural environment prefer the right to the left? Governors' partisanship and corporate environmental performance

Author

Listed:
  • Byungjun Yu
  • Saixing Zeng
  • Xiaohua Meng
  • Hanyang Ma
  • Daxin Sun

Abstract

This study investigates the relationship between governors' partisanship and the corporate environmental performance of firms in South Korea. According to political ideology perspective, governors' partisanship closely influences the policy directions and preferences of the provincial administration. Conservative (red) governors tend to induce and encourage competition among firms by deregulating and offering policy benefits to businesses at the provincial level. In response to increased competition in provinces governed by red governors, firms commit to aggressive environmental initiatives as a strategic differentiation tool, in contrast to their behavior in provinces controlled by liberal (blue) governors. Moreover, we examine a contingent role of the provincial Congress. According to the principle of checks and balances, the positive impact of red governors on a firm's environmental performance is stronger when the provincial Congress is controlled by the liberal (blue) party, with its checks and balances on the red governors. This study extends an institutional theory by exploring institutional setting mechanisms at the provincial level.

Suggested Citation

  • Byungjun Yu & Saixing Zeng & Xiaohua Meng & Hanyang Ma & Daxin Sun, 2020. "Does natural environment prefer the right to the left? Governors' partisanship and corporate environmental performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1605-1616, July.
    • Handle: RePEc:wly:corsem:v:27:y:2020:i:4:p:1605-1616
    DOI: 10.1002/csr.1908
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/csr.1908
    Download Restriction: no
    File URL: https://libkey.io/10.1002/csr.1908?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Candau, Fabien & Dienesch, Elisa, 2017. "Pollution Haven and Corruption Paradise," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 171-192.
    2. Byungki Kim & Jinhan Pae & Choong-Yuel Yoo, 2019. "Business Groups and Tunneling: Evidence from Corporate Charitable Contributions by Korean Companies," Journal of Business Ethics, Springer, vol. 154(3), pages 643-666, February.
    3. Ute Stephan & Lorraine M Uhlaner & Christopher Stride, 2015. "Institutions and social entrepreneurship: The role of institutional voids, institutional support, and institutional configurations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(3), pages 308-331, April.
    4. Hong, Harrison & Kostovetsky, Leonard, 2012. "Red and blue investing: Values and finance," Journal of Financial Economics, Elsevier, vol. 103(1), pages 1-19.
    5. David Detomasi, 2008. "The Political Roots of Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 82(4), pages 807-819, November.
    6. Timothy Kiessling & Lars Isaksson & Burze Yasar, 2016. "Market Orientation and CSR: Performance Implications," Journal of Business Ethics, Springer, vol. 137(2), pages 269-284, August.
    7. Daxin Sun & Saixing Zeng & Hongquan Chen & Xiaohua Meng & Zhizhou Jin, 2019. "Monitoring effect of transparency: How does government environmental disclosure facilitate corporate environmentalism?," Business Strategy and the Environment, Wiley Blackwell, vol. 28(8), pages 1594-1607, December.
    8. Fabrizio Zerbini, 2017. "CSR Initiatives as Market Signals: A Review and Research Agenda," Journal of Business Ethics, Springer, vol. 146(1), pages 1-23, November.
    9. Hongquan Chen & Saixing Zeng & Han Lin & Hanyang Ma, 2017. "Munificence, Dynamism, and Complexity: How Industry Context Drives Corporate Sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 26(2), pages 125-141, February.
    10. Christopher Marquis & Cuili Qian, 2014. "Corporate Social Responsibility Reporting in China: Symbol or Substance?," Organization Science, INFORMS, vol. 25(1), pages 127-148, February.
    11. Tom S. Clark, 2009. "The Separation of Powers, Court Curbing, and Judicial Legitimacy," American Journal of Political Science, John Wiley & Sons, vol. 53(4), pages 971-989, October.
    12. Louis†Philippe Beland & Bulent Unel, 2018. "Governors' Party Affiliation and Unions," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 57(2), pages 177-205, April.
    13. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    14. Gray, Wayne B. & Shadbegian, Ronald J. & Wang, Chunbei & Meral, Merve, 2014. "Do EPA regulations affect labor demand? Evidence from the pulp and paper industry," Journal of Environmental Economics and Management, Elsevier, vol. 68(1), pages 188-202.
    15. Abhinav Gupta & Forrest Briscoe & Donald C. Hambrick, 2017. "Red, blue, and purple firms: Organizational political ideology and corporate social responsibility," Strategic Management Journal, Wiley Blackwell, vol. 38(5), pages 1018-1040, May.
    16. Yongqiang Gao & Jian Wu & Taïeb Hafsi, 2017. "The Inverted U‐Shaped Relationship between Corporate Philanthropy and Spending on Research and Development: A Case of Complementarity and Competition Moderated by Firm Size and Visibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(6), pages 465-477, November.
    17. Georges A. Tanguay & Paul Lanoie & Jérôme Moreau, 2004. "Environmental Policy, Public Interest and Political Market," Public Choice, Springer, vol. 120(1_2), pages 1-27, July.
    18. M. K. Chin & Matthew Semadeni, 2017. "CEO political ideologies and pay egalitarianism within top management teams," Strategic Management Journal, Wiley Blackwell, vol. 38(8), pages 1608-1625, August.
    19. Cusack, Thomas R, 1997. "Partisan Politics and Public Finance: Changes in Public Spending in the Industrialized Democracies, 1955-1989," Public Choice, Springer, vol. 91(3-4), pages 375-395, June.
    20. Elisabeth R Gerber & Daniel J Hopkins, 2011. "When Mayors Matter: Estimating the Impact of Mayoral Partisanship on City Policy," American Journal of Political Science, John Wiley & Sons, vol. 55(2), pages 326-339, April.
    21. Estrin, Saul & Korosteleva, Julia & Mickiewicz, Tomasz, 2013. "Which institutions encourage entrepreneurial growth aspirations?," Journal of Business Venturing, Elsevier, vol. 28(4), pages 564-580.
    22. Hibbs, Douglas A., 1977. "Political Parties and Macroeconomic Policy," American Political Science Review, Cambridge University Press, vol. 71(4), pages 1467-1487, December.
    23. Ioannis Ioannou & George Serafeim, 2012. "What drives corporate social performance? The role of nation-level institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(9), pages 834-864, December.
    24. Candau, Fabien & Dienesch, Elisa, 2017. "Pollution Haven and Corruption Paradise," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 171-192.
    25. Garry D. Bruton & David Ahlstrom & Han–Lin Li, 2010. "Institutional Theory and Entrepreneurship: Where Are We Now and Where Do We Need to Move in the Future?," Entrepreneurship Theory and Practice, , vol. 34(3), pages 421-440, May.
    26. James Cordeiro & Manish Tewari, 2015. "Firm Characteristics, Industry Context, and Investor Reactions to Environmental CSR: A Stakeholder Theory Approach," Journal of Business Ethics, Springer, vol. 130(4), pages 833-849, September.
    27. Chemmanur, Thomas J. & He, Jie, 2011. "IPO waves, product market competition, and the going public decision: Theory and evidence," Journal of Financial Economics, Elsevier, vol. 101(2), pages 382-412, August.
    28. Won Oh & Young Chang & Aleksey Martynov, 2011. "The Effect of Ownership Structure on Corporate Social Responsibility: Empirical Evidence from Korea," Journal of Business Ethics, Springer, vol. 104(2), pages 283-297, December.
    29. Chung, Ji-Bum & Kim, Eun-Sung, 2018. "Public perception of energy transition in Korea: Nuclear power, climate change, and party preference," Energy Policy, Elsevier, vol. 116(C), pages 137-144.
    30. Han Lin & Saixing Zeng & Liangyan Wang & Hailiang Zou & Hanyang Ma, 2016. "How Does Environmental Irresponsibility Impair Corporate Reputation? A Multi‐Method Investigation," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(6), pages 413-423, November.
    31. Marion Dupire & Bouchra M’Zali, 2018. "CSR Strategies in Response to Competitive Pressures," Journal of Business Ethics, Springer, vol. 148(3), pages 603-623, March.
    32. Hutton, Irena & Jiang, Danling & Kumar, Alok, 2014. "Corporate Policies of Republican Managers," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 49(5-6), pages 1279-1310, December.
    33. Yuliang Yao & Kevin Xiaoguo Zhu, 2012. "Research Note ---Do Electronic Linkages Reduce the Bullwhip Effect? An Empirical Analysis of the U.S. Manufacturing Supply Chains," Information Systems Research, INFORMS, vol. 23(3-part-2), pages 1042-1055, September.
    34. Riley, William B. & Luksetich, William A., 1980. "The Market Prefers Republicans: Myth or Reality," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 15(3), pages 541-560, September.
    35. Sergiy Verstyuk, 2004. "Partisan Differences in Economic Outcomes and Corresponding Voting Behavior: Evidence from the U.S," Public Choice, Springer, vol. 120(1_2), pages 169-189, July.
    36. Reed, W. Robert, 2006. "Democrats, republicans, and taxes: Evidence that political parties matter," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 725-750, May.
    37. Ruxi Wang & Frank Wijen & Pursey P.M.A.R. Heugens, 2018. "Government's green grip: Multifaceted state influence on corporate environmental actions in China," Strategic Management Journal, Wiley Blackwell, vol. 39(2), pages 403-428, February.
    38. Uwafiokun Idemudia & Cynthia Kwakyewah, 2018. "Analysis of the Canadian national corporate social responsibility strategy: Insights and implications," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(5), pages 928-938, September.
    39. Hyemi Kim & Wonjun Park, 2018. "A Study of the Energy Efficiency Management in Green Standard for Energy and Environmental Design (G-SEED)-Certified Apartments in South Korea," Sustainability, MDPI, vol. 10(10), pages 1-20, September.
    40. Aviad Pe'Er & Oliver Gottschlag, 2011. "Red and Blue: the relationship between the institutional context and the performance of leveraged buyout investments," Post-Print hal-00631579, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Byungjun Yu & Saixing Zeng & Hongquan Chen & Xiaohua Meng & Chiming Tam, 2021. "Doing more and doing better are two different entities: Different patterns of family control and environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 1-20, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Byungjun Yu & Saixing Zeng & Hongquan Chen & Xiaohua Meng & Chiming Tam, 2021. "Doing more and doing better are two different entities: Different patterns of family control and environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 1-20, January.
    2. Yusen Dong & Senhua Chen & Yixue Wu, 2023. "Keeping up with the Joneses: The role of investee peers corporate environmental responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1841-1855, July.
    3. Niklas Potrafke, 2018. "Government ideology and economic policy-making in the United States—a survey," Public Choice, Springer, vol. 174(1), pages 145-207, January.
    4. Niklas Potrafke, 2017. "Government Ideology and Economic Policy-Making in the United States," CESifo Working Paper Series 6444, CESifo.
    5. Ding Wang & Jiang Wei & Niels Noorderhaven & Yang Liu, 2023. "Signaling Effects of CSR Performance on Cross-border Alliance Formation," Journal of Business Ethics, Springer, vol. 186(4), pages 831-850, September.
    6. Wang, Ding & Wei, Jiang & Noorderhaven, Niels & Liu, Yang, 2023. "Signaling effects of CSR performance on cross-border alliance formation," Other publications TiSEM 8216bc26-81cb-4d2a-b81a-4, Tilburg University, School of Economics and Management.
    7. Yusen Dong & Pengcheng Ma & Lanzhu Sun & Daniel Han Ming Chng, 2024. "Goodwill Hunting: Why and When Ultimate Controlling Owners Affect Their Firms’ Corporate Social Responsibility Performance," Journal of Business Ethics, Springer, vol. 193(3), pages 535-553, September.
    8. Ted Hayduk, 2022. "Association membership, election cycles, and political donation patterns," Economics of Governance, Springer, vol. 23(3), pages 359-384, December.
    9. Rieger, Verena & Gründler, Anna & Winkler, Hans-Jörg & Tschauner, Benjamin & Engelen, Andreas, 2021. "A cross-national perspective of compassion's role in driving social entrepreneurial intentions," Journal of International Management, Elsevier, vol. 27(1).
    10. Ľuboš Pástor & Pietro Veronesi, 2020. "Political Cycles and Stock Returns," Journal of Political Economy, University of Chicago Press, vol. 128(11), pages 4011-4045.
    11. Kadoukpè Gildas Magbondé & Djana Mignouna & Victor Manyong & Razack Adéoti & Ayélé Odile Sossou, 2023. "Impact of informal institutions on youth agribusiness participation in Southern Benin," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-26, December.
    12. Zhang, Weike & Luo, Qian & Liu, Shiyuan, 2022. "Is government regulation a push for corporate environmental performance? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 105-121.
    13. Qi, Guoyou & Zou, Hailiang & Xie, Xuemei & Meng, Xiaohua & Fan, Tijun & Cao, Yuanhe, 2020. "Obedience or escape: Examining the contingency influences of corruption on firm exports," Journal of Business Research, Elsevier, vol. 106(C), pages 261-272.
    14. McGuinness, Paul B. & Vieito, João Paulo & Wang, Mingzhu, 2017. "The role of board gender and foreign ownership in the CSR performance of Chinese listed firms," Journal of Corporate Finance, Elsevier, vol. 42(C), pages 75-99.
    15. Francisco Javier Forcadell & Antonio Lorena & Elisa Aracil, 2023. "The firm under the spotlight: How stakeholder scrutiny shapes corporate social responsibility and its influence on performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1258-1272, May.
    16. Haiqing Hu & Di Chen & Chun‐Ping Chang & Yin Chu, 2021. "The Political Economy Of Environmental Consequences: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 35(1), pages 250-306, February.
    17. Woo, Donghyup & Suresh, Nallan C., 2022. "Voluntary agreements for sustainability, resource efficiency & firm performance under the supply chain cooperation policy in South Korea," International Journal of Production Economics, Elsevier, vol. 252(C).
    18. Yongfeng Zhang & Peng Wang & Jongwook Kwon, 2021. "CSR in China: Does Being Close to the Central or Local Government Matter?," Sustainability, MDPI, vol. 13(16), pages 1-12, August.
    19. Jochimsen, Beate & Nuscheler, Robert, 2005. "The Political Economy of the German Länder Deficits," Discussion Papers 2005/6, Free University Berlin, School of Business & Economics.
    20. Dodge Cahan & Niklas Potrafke, 2021. "The Democrat-Republican presidential growth gap and the partisan balance of the state governments," Public Choice, Springer, vol. 189(3), pages 577-601, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:corsem:v:27:y:2020:i:4:p:1605-1616. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1535-3966 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.