IDEAS home Printed from https://ideas.repec.org/a/eee/glofin/v62y2024ics1044028324000991.html
   My bibliography  Save this article

Bright is the moon over my home village: Chinese local executives and environmental decoupling

Author

Listed:
  • Ye, Yong
  • Gao, Mengyang
  • Luo, Runmei

Abstract

This study investigates whether and how local executives' hometown identities affect enterprises' environmental decoupling. Environmental decoupling refers to the discrepancy between a company's environmental sustainability promises and its actual environmental sustainability performance. Based on the place attachment theory, we expect local executives to engage in fewer corporate environmental decoupling actions than non-local executives. Using the annual data for Chinese companies listed on the A-share market between 2009 and 2021, we tested this hypothesis. Our findings reveal that local executives' sense of identification and belonging to their hometowns lessens the likelihood of businesses engaging in environmental decoupling. This result is more pronounced for companies located in regions with low population mobility, a slow marketization process, strict environmental regulations, and companies with high financing constraints and low corporate governance levels. Furthermore, we find that local executives decrease underreporting of the environmental performance of firms, thereby reducing firms' environmental decoupling. Following several robustness tests, the primary conclusions remain valid. This study offers new evidence that executive characteristics affect company sustainability from an environmental performance decoupling standpoint. It shows that identifying the executives' hometowns motivates them to uphold a sincere commitment to corporate social responsibility.

Suggested Citation

  • Ye, Yong & Gao, Mengyang & Luo, Runmei, 2024. "Bright is the moon over my home village: Chinese local executives and environmental decoupling," Global Finance Journal, Elsevier, vol. 62(C).
  • Handle: RePEc:eee:glofin:v:62:y:2024:i:c:s1044028324000991
    DOI: 10.1016/j.gfj.2024.101027
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1044028324000991
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.gfj.2024.101027?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Local executives; Environmental decoupling; Hometown identity; Environmental information disclosure; Environmental performance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    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:eee:glofin:v:62:y:2024:i:c:s1044028324000991. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620162 .

    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.