IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v11y2024i1d10.1057_s41599-024-03623-z.html
   My bibliography  Save this article

The potential of smart factories in reducing environmental emissions: the evidence from Chinese listed manufacturing firms

Author

Listed:
  • Weihua Liu

    (Tianjin University)

  • Jiahe Hou

    (Tianjin University)

  • Yang Cheng

    (Aalborg University)

  • Chaolun Yuan

    (Tianjin University)

  • Rui Lan

    (Tianjin University)

  • Hing Kai Chan

    (Nottingham University Business School China)

Abstract

The nature of smart factories to help manufacturing firms reducing environmental emissions has attracted the widespread attention of governments and industries. However, some research also worried that if smart factories were not effectively constructed, they may increase firms’ environmental emissions. To address this concern, we use PSM-progressive DID model to analyze the relationships between the construction of smart factories and environmental emissions, based on 144 Chinese listed manufacturing firms. The main findings are as follow. First, the construction of smart factories can lead to the short-term increase of 7.55% GHG emissions (1.001 tCO2e) and 4.12% air pollutants cost (1.011 $) per $M operation cost for firms. Second, the negative impact of smart factory construction on GHG emissions can be partially explained by physical technologies. Third, mimetic institution (industrial maturity of environment management system) can reduce the negative impact of smart factory construction, but coercive institution (government regulation) and normative institution (social media attention) have no significant moderating effect. With these findings, this study provides a clear understanding of how the construction of smart factories influences firms’ environmental sustainability and accordingly offers insights for business considering environmental objectives in smart factory development.

Suggested Citation

  • Weihua Liu & Jiahe Hou & Yang Cheng & Chaolun Yuan & Rui Lan & Hing Kai Chan, 2024. "The potential of smart factories in reducing environmental emissions: the evidence from Chinese listed manufacturing firms," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-16, December.
    • Handle: RePEc:pal:palcom:v:11:y:2024:i:1:d:10.1057_s41599-024-03623-z
    DOI: 10.1057/s41599-024-03623-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-024-03623-z
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-024-03623-z?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.

    References listed on IDEAS

    as
    1. Clemens, Bruce & Douglas, Thomas J., 2006. "Does coercion drive firms to adopt 'voluntary' green initiatives? Relationships among coercion, superior firm resources, and voluntary green initiatives," Journal of Business Research, Elsevier, vol. 59(4), pages 483-491, April.
    2. Yanpeng Chen & Wenjun Mai, 2024. "Investor attention and environmental performance of Chinese high-tech companies: the moderating effects of media attention and coverage sentiment," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-16, December.
    3. Christopher Marquis & Michael W. Toffel & Yanhua Zhou, 2016. "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing," Organization Science, INFORMS, vol. 27(2), pages 483-504, April.
    4. Renneboog, L.D.R. & Liang, H. & Ferrell, A., 2014. "Socially Responsible Firms," Other publications TiSEM b543ca6a-e8f8-490e-9ae2-d, Tilburg University, School of Economics and Management.
    5. Tsan‐Ming Choi & Subodha Kumar & Xiaohang Yue & Hau‐Ling Chan, 2022. "Disruptive Technologies and Operations Management in the Industry 4.0 Era and Beyond," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 9-31, January.
    6. Ilídio Barreto & Charles Baden‐Fuller, 2006. "To Conform or To Perform? Mimetic Behaviour, Legitimacy‐Based Groups and Performance Consequences," Journal of Management Studies, Wiley Blackwell, vol. 43(7), pages 1559-1581, November.
    7. Andrea Chiarini, 2021. "Industry 4.0 technologies in the manufacturing sector: Are we sure they are all relevant for environmental performance?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 3194-3207, November.
    8. Shengqing Xu, 2023. "China’s climate governance for carbon neutrality: regulatory gaps and the ways forward," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    9. Simone Cenci & Matteo Burato & Marek Rei & Maurizio Zollo, 2023. "The alignment of companies' sustainability behavior and emissions with global climate targets," Nature Communications, Nature, vol. 14(1), pages 1-14, December.
    10. Osterrieder, Philipp & Budde, Lukas & Friedli, Thomas, 2020. "The smart factory as a key construct of industry 4.0: A systematic literature review," International Journal of Production Economics, Elsevier, vol. 221(C).
    11. Ernst Fehr & Ivo Schurtenberger, 2018. "Normative foundations of human cooperation," Nature Human Behaviour, Nature, vol. 2(7), pages 458-468, July.
    12. Prayag Lal Yadav & Seung Hun Han & Hohyun Kim, 2017. "Sustaining Competitive Advantage Through Corporate Environmental Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 26(3), pages 345-357, March.
    13. Yuquan Meng & Yuhang Yang & Haseung Chung & Pil-Ho Lee & Chenhui Shao, 2018. "Enhancing Sustainability and Energy Efficiency in Smart Factories: A Review," Sustainability, MDPI, vol. 10(12), pages 1-28, December.
    14. Ferrell, Allen & Liang, Hao & Renneboog, Luc, 2016. "Socially responsible firms," Journal of Financial Economics, Elsevier, vol. 122(3), pages 585-606.
    15. Bai, Chunguang & Dallasega, Patrick & Orzes, Guido & Sarkis, Joseph, 2020. "Industry 4.0 technologies assessment: A sustainability perspective," International Journal of Production Economics, Elsevier, vol. 229(C).
    16. Li, Ying & Dai, Jing & Cui, Li, 2020. "The impact of digital technologies on economic and environmental performance in the context of industry 4.0: A moderated mediation model," International Journal of Production Economics, Elsevier, vol. 229(C).
    17. Jing‐Lin Duanmu & Maoliang Bu & Russell Pittman, 2018. "Does market competition dampen environmental performance? Evidence from China," Strategic Management Journal, Wiley Blackwell, vol. 39(11), pages 3006-3030, November.
    18. Chengming Li & Meiyu Wen & Shaoxiang Jiang & Huaxing Wang, 2024. "Assessing the effect of urban digital infrastructure on green innovation: mechanism identification and spatial-temporal characteristics," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    19. Mohamed Abubakr & Adel T. Abbas & Italo Tomaz & Mahmoud S. Soliman & Monis Luqman & Hussien Hegab, 2020. "Sustainable and Smart Manufacturing: An Integrated Approach," Sustainability, MDPI, vol. 12(6), pages 1-19, March.
    20. Asmamaw Mulusew & Mingyong Hong, 2024. "A dynamic linkage between greenhouse gas (GHG) emissions and agricultural productivity: evidence from Ethiopia," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-17, December.
    21. Yang, Yang & Jia, Fu & Chen, Lujie & Wang, Yichuan & Xiong, Yu, 2021. "Adoption timing of OHSAS 18001 and firm performance: An institutional theory perspective," International Journal of Production Economics, Elsevier, vol. 231(C).
    22. Ma, Shuaiyin & Huang, Yuming & Liu, Yang & Kong, Xianguang & Yin, Lei & Chen, Gaige, 2023. "Edge-cloud cooperation-driven smart and sustainable production for energy-intensive manufacturing industries," Applied Energy, Elsevier, vol. 337(C).
    23. Ye, Fei & Ouyang, You & Li, Yina, 2023. "Digital investment and environmental performance: The mediating roles of production efficiency and green innovation," International Journal of Production Economics, Elsevier, vol. 259(C).
    24. Du, Juntao & Shen, Zhiyang & Song, Malin & Zhang, Linda, 2023. "Nexus between digital transformation and energy technology innovation: An empirical test of A-share listed enterprises," Energy Economics, Elsevier, vol. 120(C).
    25. Clarkson, Peter M. & Li, Yue & Richardson, Gordon D. & Vasvari, Florin P., 2008. "Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis," Accounting, Organizations and Society, Elsevier, vol. 33(4-5), pages 303-327.
    26. Sachin Kamble & Angappa Gunasekaran & Neelkanth C. Dhone, 2020. "Industry 4.0 and lean manufacturing practices for sustainable organisational performance in Indian manufacturing companies," International Journal of Production Research, Taylor & Francis Journals, vol. 58(5), pages 1319-1337, March.
    Full references (including those not matched with items on IDEAS)

    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. Wenbin Long & Le Luo & Hongfeng Sun & Qiqi Zhong, 2023. "Does going abroad lead to going green? Firm outward foreign direct investment and domestic environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 484-498, January.
    2. Patrick J. Ferguson & Jane Hronsky & Matt Pinnuck, 2023. "Who pays attention to sustainability reports and why? Evidence from Google search activity," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(3), pages 3519-3551, September.
    3. Wang, Xiaolin & Ye, Yingying, 2024. "Environmental protection tax and firms’ ESG investment: Evidence from China," Economic Modelling, Elsevier, vol. 131(C).
    4. Jing Jia & Zhongtian Li, 2022. "Corporate Environmental Performance and Financial Distress: Evidence from Australia," Australian Accounting Review, CPA Australia, vol. 32(2), pages 188-200, June.
    5. Tao, Zhibin & Chao, Jiaxiao, 2024. "Unlocking new opportunities in the industry 4.0 era, exploring the critical impact of digital technology on sustainable performance and the mediating role of GSCM practices," Innovation and Green Development, Elsevier, vol. 3(3).
    6. Liang, Hao & Marquis, C. & Renneboog, Luc & Li Sun, Sunny, 2018. "Future-time framing : The effect of language on corporate future orientation," Other publications TiSEM 1c1a2d0f-4720-46b9-829b-2, Tilburg University, School of Economics and Management.
    7. Arouri, Mohamed & El Ghoul, Sadok & Gomes, Mathieu, 2021. "Greenwashing and product market competition," Finance Research Letters, Elsevier, vol. 42(C).
    8. Yanbing Wang & Michael S. Delgado & Jin Xu, 2023. "When and where does it pay to be green? – A look into socially responsible investing and the cost of equity capital," International Journal of Corporate Social Responsibility, Springer, vol. 8(1), pages 1-23, December.
    9. Soh Young In & Young Joon Lee & Robert G. Eccles, 2024. "Looking back and looking forward: A scientometric analysis of the evolution of corporate sustainability research over 47 years," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2225-2259, May.
    10. Le Luo & Qingliang Tang, 2021. "Corporate governance and carbon performance: role of carbon strategy and awareness of climate risk," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2891-2934, June.
    11. Wajih Abbassi & Sabri Boubaker & Wael Louhichi, 2024. "Why do corporate social responsibility‐oriented companies opt for bond debt? Evidence from crisis periods," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 1534-1568, April.
    12. Lihong Wang & Shaoqing Kang & Hongjun Wu, 2021. "Do Politically Connected Firms Pay Less Toward Environmental Protection? Firm‐level Evidence from Polluting Industries in China," Abacus, Accounting Foundation, University of Sydney, vol. 57(2), pages 362-405, June.
    13. de Villiers, Charl & Jia, Jing & Li, Zhongtian, 2022. "Are boards' risk management committees associated with firms’ environmental performance?," The British Accounting Review, Elsevier, vol. 54(1).
    14. Yanlei Zhang, 2021. "Greasing Dirty Machines: Evidence of Pollution-Driven Bribery in China," Journal of Business Ethics, Springer, vol. 170(1), pages 53-74, April.
    15. Jongmoo Jay Choi & Hoje Jo & Jimi Kim & Moo Sung Kim, 2018. "Business Groups and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 153(4), pages 931-954, December.
    16. Yu, Ellen Pei-yi & Luu, Bac Van & Chen, Catherine Huirong, 2020. "Greenwashing in environmental, social and governance disclosures," Research in International Business and Finance, Elsevier, vol. 52(C).
    17. Hao Liang & Christopher Marquis & Luc Renneboog & Sunny Li Sun, 2018. "Future-Time Framing: The Effect of Language on Corporate Future Orientation," Organization Science, INFORMS, vol. 29(6), pages 1093-1111, December.
    18. Li, Haitong & Lu, Lanting & Lin, Ziang & Meng, Tianze, 2024. "Digital innovation and corporate social responsibility performance: Evidence from firms' digital patents," Technological Forecasting and Social Change, Elsevier, vol. 207(C).
    19. Marco Ghitti & Gianfranco Gianfrate & Lorenza Palma, 2024. "The agency of greenwashing," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(3), pages 905-941, September.
    20. Zhu, Minghao & Liang, Chen & Yeung, Andy C.L. & Zhou, Honggeng, 2024. "The impact of intelligent manufacturing on labor productivity: An empirical analysis of Chinese listed manufacturing companies," International Journal of Production Economics, Elsevier, vol. 267(C).

    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:pal:palcom:v:11:y:2024:i:1:d:10.1057_s41599-024-03623-z. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: https://www.nature.com/ .

    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.