IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v45y2024i4p1793-1807.html
   My bibliography  Save this article

The intensity of environmental scandals, responsible innovation, and corporate resilience: The moderating role of relational trust

Author

Listed:
  • Cao Xia
  • Wang Delei

Abstract

Research on the reasons contributing to the heterogeneous effects of environmental scandals on corporate performance remains limited. This study examines the factors of corporate resilience (CR) and employs event system theory to investigate the roles of responsible innovation (RI) and relational trust (RT) in shaping the relationship between environmental scandal intensity (ESI) and CR. We focus on examining the mediating role of RI in the relationship between ESI and CR and consider the moderating effect of RT. Analyzing survey data from 211 Chinese companies, we find that RI significantly mediates the inverted U‐shaped impact of ESI on CR. Moreover, RT regulates this relationship. These findings help extend our knowledge on the practice of CR when a scandal occurs and during its aftermath.

Suggested Citation

  • Cao Xia & Wang Delei, 2024. "The intensity of environmental scandals, responsible innovation, and corporate resilience: The moderating role of relational trust," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 1793-1807, June.
    • Handle: RePEc:wly:mgtdec:v:45:y:2024:i:4:p:1793-1807
    DOI: 10.1002/mde.4106
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.4106
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.4106?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. Vincent Denommee-Gravel & Kyungho Kim, 2019. "Pipeline Accidents and Incidents, Environmental Consciousness, and Financial Performance in the Canadian Energy Industry," Sustainability, MDPI, vol. 11(12), pages 1-17, June.
    2. Bahram Soltani, 2014. "The Anatomy of Corporate Fraud: A Comparative Analysis of High Profile American and European Corporate Scandals," Journal of Business Ethics, Springer, vol. 120(2), pages 251-274, March.
    3. Michelle Worosz & Andrew Knight & Craig Harris, 2008. "Resilience in the US red meat industry: the roles of food safety policy," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 25(2), pages 187-191, June.
    4. Marco Bellucci & Diletta Acuti & Lorenzo Simoni & Giacomo Manetti, 2021. "Hypocrisy and legitimacy in the aftermath of a scandal: an experimental study of stakeholder perceptions of nonfinancial disclosure," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 34(9), pages 182-194, June.
    5. Bahram Soltani, 2014. "The Anatomy of Corporate Fraud: A Comparative Analysis of High Profile American and European Corporate Scandals," Post-Print hal-03970654, HAL.
    6. repec:eme:aaaj00:aaaj-01-2021-5113 is not listed on IDEAS
    7. Rodríguez-Sánchez, Alma & Guinot, Jacob & Chiva, Ricardo & López-Cabrales, Álvaro, 2021. "How to emerge stronger: Antecedents and consequences of organizational resilience," Journal of Management & Organization, Cambridge University Press, vol. 27(3), pages 442-459, May.
    8. Dorfleitner, Gregor & Kreuzer, Christian & Sparrer, Christian, 2022. "To sin in secret is no sin at all: On the linkage of policy, society, culture, and firm characteristics with corporate scandals," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 762-784.
    9. Zhongju Liao & Manting Zhang, 2020. "The influence of responsible leadership on environmental innovation and environmental performance: The moderating role of managerial discretion," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(5), pages 2016-2027, September.
    10. Jie Bai & Ludovica Gazze & Yukun Wang, 2022. "Collective Reputation in Trade: Evidence from the Chinese Dairy Industry," The Review of Economics and Statistics, MIT Press, vol. 104(6), pages 1121-1137, November.
    11. Yossi Sheffi, 2005. "The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693496, December.
    12. Naveed Yazdani & Hasan Murad, 2015. "Toward an Ethical Theory of Organizing," Journal of Business Ethics, Springer, vol. 127(2), pages 399-417, March.
    13. Marta Pizzetti & Lucia Gatti & Peter Seele, 2021. "Firms Talk, Suppliers Walk: Analyzing the Locus of Greenwashing in the Blame Game and Introducing ‘Vicarious Greenwashing’," Journal of Business Ethics, Springer, vol. 170(1), pages 21-38, April.
    14. Samuel Adomako & Mai Dong Tran, 2022. "Environmental collaboration, responsible innovation, and firm performance: The moderating role of stakeholder pressure," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1695-1704, May.
    15. Celina Smith & Emanuela Rondi & Alfredo de Massis & Mattias Nordqvist, 2023. "Rising Every Time We Fall : Organizational Fortitude and Response to Adversities," Post-Print hal-04325685, HAL.
    16. Jianhua Yang & Yuying Liu & Yajun Jia, 2022. "Influence of Trust Relationships with Suppliers on Manufacturer Resilience in COVID-19 Era," Sustainability, MDPI, vol. 14(15), pages 1-23, July.
    17. Daniel Hain & Sofia Johan & Daojuan Wang, 2016. "Determinants of Cross-Border Venture Capital Investments in Emerging and Developed Economies: The Effects of Relational and Institutional Trust," Journal of Business Ethics, Springer, vol. 138(4), pages 743-764, November.
    18. Pandza, Krsto & Ellwood, Paul, 2013. "Strategic and ethical foundations for responsible innovation," Research Policy, Elsevier, vol. 42(5), pages 1112-1125.
    19. Guire, William M.C. & Holtmaat, Ellen Alexandra & Prakash, Aseem, 2022. "Penalties for industrial accidents: the impact of the Deepwater Horizon accident on BP’s reputation and stock market returns," LSE Research Online Documents on Economics 115560, London School of Economics and Political Science, LSE Library.
    20. Zhang, Lihan & Gao, Yan & Lu, Wenxue & Guo, Wenqian, 2023. "The influence of conflict event strength on interorganizational cooperation: Moderating roles of contractual complexity and trust," Journal of Business Research, Elsevier, vol. 159(C).
    21. Kevin Zheng Zhou & Laura Poppo, 2010. "Exchange hazards, relational reliability, and contracts in China: The contingent role of legal enforceability," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(5), pages 861-881, June.
    22. Cole, Rebel & Johan, Sofia & Schweizer, Denis, 2021. "Corporate failures: Declines, collapses, and scandals," Journal of Corporate Finance, Elsevier, vol. 67(C).
    23. Wang, Yanxia & Shen, Tao & Chen, Yang & Carmeli, Abraham, 2021. "CEO environmentally responsible leadership and firm environmental innovation: A socio-psychological perspective," Journal of Business Research, Elsevier, vol. 126(C), pages 327-340.
    24. Panpan Yang & Bing Han, 2017. "Responsible Research and Innovation and Its Implications for China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 25(6), pages 120-138, November.
    25. Jae C. Jung & Junyon Im, 2023. "How does social trust affect corporate financial performance? The mediating role of corporate social responsibility," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 32(1), pages 236-255, January.
    26. Verónica H. Villena, 2019. "The Missing Link? The Strategic Role of Procurement in Building Sustainable Supply Networks," Production and Operations Management, Production and Operations Management Society, vol. 28(5), pages 1149-1172, May.
    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. Zahid Hameed & Rana Muhammad Naeem & Tahir Islam & Safiya Mukhtar Alshibani, 2024. "How does CEO ethical leadership transform Saudi SMEs into green firms? A moderated mediation model," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 3855-3868, September.
    2. Laure de Batz & Evžen Kočenda, 2024. "Financial crime and punishment: A meta‐analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 38(4), pages 1338-1398, September.
    3. Sophie Lythreatis & Abdul-Nasser El-Kassar & Palie Smart & Alberto Ferraris, 2024. "Participative leadership, ethical climate and responsible innovation perceptions: evidence from South Korea," Asia Pacific Journal of Management, Springer, vol. 41(3), pages 1285-1312, September.
    4. Laure Batz, 2023. "Financial market enforcement in France," European Journal of Law and Economics, Springer, vol. 55(3), pages 409-468, June.
    5. Saffet A. Uygur & Christopher J. Napier, 2024. "Understanding Fraud in the Not-For-Profit Sector: A Stakeholder Perspective for Charities," Journal of Business Ethics, Springer, vol. 190(3), pages 569-588, March.
    6. Mark Beasley & Allen Blay & Christina Lewellen & Michelle McAllister, 2023. "Tempering Financial Reporting Risk through Board Risk Management," JRFM, MDPI, vol. 16(12), pages 1-22, November.
    7. Naveed Ahmad Faraz & Fawad Ahmed & Zhengde Xiong, 2024. "How firms leverage corporate environmental strategy to nurture green behavior: Role of multi‐level environmentally responsible leadership," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 243-259, January.
    8. Wei Xuecheng & Qaisar Iqbal, 2022. "Ethical Leadership, Bricolage, and Eco-Innovation in the Chinese Manufacturing Industry: A Multi-Theory Perspective," Sustainability, MDPI, vol. 14(12), pages 1-15, June.
    9. Steven J. Hyde & Eric Bachura & Jonathan Bundy & Richard T. Gretz & Wm. Gerard Sanders, 2024. "The tangled webs we weave: Examining the effects of CEO deception on analyst recommendations," Strategic Management Journal, Wiley Blackwell, vol. 45(1), pages 66-112, January.
    10. Liting Li & Haichao Zheng & Dongyu Chen & Bin Zhu, 2024. "Whose reviews are most valuable for predicting the default risk of peer-to-peer lending platforms? Evidence from China," Electronic Commerce Research, Springer, vol. 24(3), pages 1619-1658, September.
    11. Xin Xu & Feng Xiong & Zhe An, 2023. "Using Machine Learning to Predict Corporate Fraud: Evidence Based on the GONE Framework," Journal of Business Ethics, Springer, vol. 186(1), pages 137-158, August.
    12. Fawad Ahmed & Naveed Ahmad Faraz & Zhengde Xiong & Ying Ma, 2024. "The multilevel interplay of responsible leadership with leader identification and autonomous motivation to cultivate voluntary green behavior," Asia Pacific Journal of Management, Springer, vol. 41(4), pages 1861-1889, December.
    13. Hui Lu & Weiting Xu & Shaohan Cai & Fang Yang & Qingqing Chen, 2022. "Does top management team responsible leadership help employees go green? The role of green human resource management and environmental felt‐responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(4), pages 843-859, July.
    14. He, Liangxing & Zheng, Jianwen & Zhao, Meijuan & Li, Teng, 2024. "Mapping pathways to responsible innovation: Configurations of digital economy, effectuation, and firm size in SMEs—A fuzzy set qualitative comparative analysis," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    15. Christopher Dupuis & Ying Zheng, 2024. "Import Penetration and Corporate Misconduct: A Natural Experiment," Journal of Business Ethics, Springer, vol. 195(3), pages 475-506, December.
    16. Xiaoyu Cui & Baolei Qi & Muhammad Jameel Hussain, 2024. "Vendor sustainability performance and corporate customers' supplier selection," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 2910-2928, July.
    17. James Bierstaker & William D. Brink & Sameera Khatoon & Linda Thorne, 2024. "Academic Fraud and Remote Evaluation of Accounting Students: An Application of the Fraud Triangle," Journal of Business Ethics, Springer, vol. 195(2), pages 425-447, November.
    18. Shichao Sun & Xin Ran & Xuanya Shi, 2023. "The Preference of Inter-Organizational Trust on Corporate Benefit-Seeking Behaviors: A Mechanisms-Based and Policy-Capturing Analysis," Sustainability, MDPI, vol. 15(15), pages 1-23, July.
    19. Feng He & Xin Huang & Guanchun Liu & Ziqiao Wang, 2024. "Does CSR Engagement Deter Corporate Misconduct? Quasi-natural Experimental Evidence from Firms Joining a Government-Initiated Social Program in China," Journal of Business Ethics, Springer, vol. 193(3), pages 555-587, September.
    20. Aymen Sajjad & Gabriel Eweje & Muhammad Mustafa Raziq, 2024. "Sustainability leadership: An integrative review and conceptual synthesis," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 2849-2867, May.

    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:mgtdec:v:45:y:2024:i:4:p:1793-1807. 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: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    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.