Seeking legitimacy? “Ownerless” companies and environmental performance

This study explores the relationship between “ownerless” companies and environmental performance in the absence of actual controllers. We argue that companies lacking actual controllers may opt to enhance their environmental performance to address external doubts about their governance legitimacy. Opting for an empirical analysis approach, we devised a theoretical framework, and executed a regression analysis on a sample of 6676 listed companies within China’s A-shares market spanning from 2011 to 2021. The findings corroborated our hypothesis that “ownerless” companies are significantly positively related to environmental performance. Furthermore, we find that the top management team (TMT) stability negatively moderates the “ownerless” companies—environmental performance relationship, while external stakeholder environmental pressure (government environmental governance and public environmental attention) positively moderates this relationship. These findings contribute to the research on stakeholder theory and the growing literature on emerging economies. They also provide insights in practice for policymakers on how to properly perceive the phenomenon of “ownerless” companies and promote their environmental performance through institutional design and policy guidance.