Collaborative Governance and Corporate …...1 RESEARCH IN PROGRESS – PLEASE DO NOT QUOTE OR CITE...
Transcript of Collaborative Governance and Corporate …...1 RESEARCH IN PROGRESS – PLEASE DO NOT QUOTE OR CITE...
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RESEARCH IN PROGRESS – PLEASE DO NOT QUOTE OR CITE WITHOUT
PERMISSION OF THE AUTHORS
May 11, 2013
Collaborative Governance and Corporate Environmental
Compliance in China1
Paper Prepared for the Association for Public Policy Analysis and Management (APPAM)
International Conference on “Collaboration among Government, Market, and Society:
Forging Partnerships and Encouraging Competition”
Fudan University, Shanghai, China
May 26-27, 2013
Ning Liu2
Carlos Wing-Hung Lo
Xueyong Zhan
Department of Management and Marketing
The Hong Kong Polytechnic University
Hung Hom, Kowloon, Hong Kong
1 Research for the article was supported in part by the Competitive Research Grants for Newly Recruited
Junior Academic Staff (Project No. G-YJ58) of the Hong Kong Polytechnic University and the project
“Changes in the Enforcement of Environmental Regulations in China: A Longitudinal Study of
Environmental Enforcement Officials in Three Cities” of the Research Grants Council of the Hong Kong
Special Administrative Region (RGC No.: PolyU5469/10H). 2 Corresponding author. Please address comments to [email protected], Tel: (852) 64826319
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Abstract
Existing literature reveals that corporate environmental performance is largely
conditioned by regulatory pressures; yet little has been written on the ways regulated
enterprises respond to external regulatory pressures and to what extent the styles of
corporate compliance are related to corporate environmental performance. Drawing on
the literature of environmental governance and corporate management, we explore how
regulated enterprises allocate resources in different compliance styles- formalism,
accommodation, referencing, and self-determination -to achieve proactive environmental
management (PEM). Using survey data collected from 192 manufacturers in China, this
article examines the mediating effects of corporate compliance styles in bridging
organizational resource and PEM, as well as how corporate green commitment moderates
these influences. We find that two voluntary compliance style dimensions (self-
determination and referencing) have stronger bridging role in transforming organizational
resource into corporate progress in PEM: the bridging role of self-determination is more
significant in firms with higher level of green commit; and the bridging role of
referencing is more significant in firms with lower level of green commit. Moreover, the
two responsive compliance style dimensions (formalism and accommodation) do not
show significant bridging functions.
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Collaborative Governance and Corporate Environmental Compliance
in China
The literature of collaborative governance argues that collaborations between
government agencies and business firms are necessary conditions for effective making
and implementation of public policy (Daley, 2009; Freeman, 1997; Gunningham, 2009).
Existing studies of environmental governance have also examined a wide array of
voluntary and negotiated agreements between business firms and stakeholder groups to
ensure better environmental performance (King, 2007; Rondinelli & London, 2003).
However, little has been written on the organizational mechanisms through which firms
respond to environmental regulation. How do regulated enterprises respond to external
regulatory pressures? In what ways and to what extent the styles of corporate compliance
are related to corporate environmental performance?
In this study, we seek to address this research gap by examining the bridging role
of corporate compliance styles (CCS) in transforming organizational resource into
corporate progress in proactive environmental management (PEM), and we further
investigate whether the mediation effect of CCSs depends on firms’ green commitment.
We test our hypotheses by using survey data collected from 192 manufacturing
companies in China. We found that the mediation effect of CCS only exists in voluntary
compliance style dimensions (self-determination and referencing). Such mediating effect
depends on firms’ corporate green commitment level. The bridging role of self-
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determination in transforming organizational resource into corporate progress in PEM is
more significant in firms with higher level of green commit; and the bridging role of
referencing is more significant in firms with lower level of green commit. Moreover, the
two responsive compliance style dimensions (formalism and accommodation) do not
show significant bridging functions.
This paper is organized as follows. We will first provide an overview of the
current literature on corporate environmental management. Next, we develop hypotheses
on the mediating effects of corporate compliance styles in bridging organizational
resource and PEM and how corporate green commitment moderates these influences.
After the introduction of data collection methods, we present our data analyses and
results. The paper concludes with the discussions on the theoretical contributions of our
research and its practical implications.
Theoretical Background
Proactive Environmental Management (PEM)
PEM refers to business environmental actions that focus on all the negative
impacts associated with the full life cycle of a product (Liu et al., 2010; Lo, Fryxell, &
Tang, 2010). As a result of a wide range of organizational and managerial choices, PEM
aims more than fulfilling environmental regulations (Sharma, 2000). Thus, the
development and adoption of proactive environmental programs is a more comprehensive
process than compliance, and thus it requires greater managerial efforts.
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Usually, the comprehensiveness of a firm’s environmental management is
embodied in a series of environmental strategies, goals, administrative procedures and the
practical efforts to improve environmental performance (Coglianese & Nash, 2001).
However, firms differ in the extent to which these programs are genuinely integrated into
business operation. In China, for instance, although recent years have witnessed
increasing business awareness of environmental programs, internal implementation may
be a barrier in many business cases (Lo, Fryxell, & Tang, 2010). Therefore, in this study
we examine PEM by measuring the extent to which firms integrate proactive
environmental programs into business operations rather than simply counting the number
of programs.
A natural-resource-based-view of firm
The natural-resource-based view (NRBV) of firm (Hart, 1995) is a dominant
strategic management perspective to study corporate greening. Its fundamental principle
is that the basis for competitive advantages lies primarily in the application of valuable
resources and capabilities on environmental issues. It focuses on resources that allow
firms to reduce the negative impact on the natural environment, and thus addresses the fit
between what a firm is capable of and what it has the opportunity to do on environmental
issues (Berchicci & King, 2007; Russo & Fouts, 1997). Therefore, it helps to understand
how firms could achieve competitive advantage by developing unique capabilities and
proactive environmental strategies (Hart, 2011; Sharma & Vredenburg, 1998).
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Corporate compliance style dimensions
How regulated enterprises respond to external demands could also affect
corporate environmental performance. CCSs are defined as the general approaches
adopted by regulated actors to meet regulatory requirements, and the emerging research
suggests four dimensions of CCS —formalism, accommodation, referencing, and self-
determination (Liu et al., working paper). In this study we further categorize these four
dimensions into two groups, namely responsive and voluntary styles. Formalism and
accommodation are more responsive in nature. The “formalism” dimension refers to a
traditional “go-by-the-book” approach that strictly follows formal rules within a
command-and-control regulatory context (Scholz and Pinney 1995; Winter and May
2001); The “accommodation” dimension gives priority to dealing with political or
bureaucratic pressures (Levy and Egan 2003; Cho, Patten, and Roberts 2006).
Referencing and self-determination are more voluntary in nature. The “referencing”
dimension embraces a close imitation of peer enterprises’ compliance practices and
follows professional guidelines recommended by industrial trade associations (Dawson
and Segerson 2008). The “self-determination” dimension refers to a discretionary
approach that emphasizes intellectual flexibility, self-discretion, and autonomy (Oliver
1991; Sharma 2000).
Corporate green commitment
Existing literature has also identified the importance of normative commitment as
a determining factor of corporate environmental performance (Scholz & Lubell, 1998;
Weaver, Treviño, and Cochran, 1999). Among the very limited studies that explore the
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role of green commitment, many adopted a behavioral perspective. For instance,
Coglianese and Nash (2001) labeled managerial attitudes and actions as commitment in
shaping corporate performance of environmental management system (EMS). According
to Henriques and Sadorsky (1999), corporate commitment to the natural environment can
be defined as what a company is doing or has done with reference to environmental
issues. Similar definitions are also adopted by Ramus and Steger’s study (2000) about the
effect of perceived corporate commitment on environment policy and employee
innovation as well as Roy et al.’s study (2001) on the determinants of environmental
commitment.
To capture the role of corporate green commitment (CGC) in determining
proactive corporate environmental management, in this research we adopt Meyer and
Allen’s (1991) organization commitment (OC) model, and define CGC as the strength of
a firm’s identification with and willingness to improve environmental performance.
Similar to the OC, CGC can also be characterized by at least three factors (Meyer &
Allen, 1991): (a) a strong belief in and acceptance of the goals and values in
environmental protection; (b) a willingness to exert a great deal of effort to achieve
environmental goals; and (c) a definite desire to maintain a membership of green
companies.
Research Hypotheses
The positive association between organizational resources (capabilities) and
environmental performance has been confirmed in a large number of NRBV studies (e.g.,
Aragón-Correa & Sharma, 2003; Russo & Fouts, 1997; Sharma & Vredenburg, 1998).
Proactive environmental programs, such as the ISO 14001 certification, require more
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corporate efforts in internal environmental management than remedial actions. A study in
China also found that ISO-certified firms did not fully implement the standards, and one
major reason is the high costs of complying with the continual improvement principle of
management system standards (Yeung & Mok, 2005). Following these existing insights,
we hypothesize the direct influence of a firm’s resource endowment on its proactive
environmental performance as below:
Hypothesis 1. A firm’s resource availability (RA) is positively related to its
proactive environmental management (PEM).
Besides a direct impact, a firm’s resource availability could also affect its
proactive environmental management via adopting a certain compliance style. To
enterprises, resource application is far from simple investment in green technologies
nowadays but involves more complex relationships with external stakeholders. For
instance, accommodative firms usually take proactive stand to deal with bureaucratic
stakeholders, who exert additional demands on enterprises to reduce existing pollution,
and hence firms are more likely to have an integrated PEM. The greater latitude on how
to meet goals also allows firms time to deploy new means to meet goals (Majumdar &
Marcus, 2001). Therefore, we develop a general hypothesis that a firm’s CCS adoption
level plays an important role in bridging firm’s resource endowment and PEM:
Hypothesis 2. Corporate compliance styles (CCSs) mediate the positive association
between firms’ resource availability (RA) and proactive environmental
management (PEM).
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We propose that the positive association between RA and PEM through CCS
depends on firms’ green commitment. Firms with a higher degree of green commitment
are more likely to integrate formal demands into its daily practices to obtain continuous
environmental improvement. Less committed firms may adopt a ceremonial behavior to
reconcile regulatory pressure without genuine progress (Weaver, Treviño, and Cochran,
1999). Highly committed enterprises are likely to overestimate the potential benefit either
to the firm or to the society and nature through accommodating additional political
demands, while less committed may concern the cost more. Hence we suppose that CGC
could strengthen the mediated effect of formalism and accommodation.
Whether referencing firms will take proactive actions depends on how they
perceive peers are doing. Firms with a high level of CGC are more likely to follow
proactive models while those with a low CGC may think it is unnecessary to invest in
greener technologies, or even follow bad apples. The latter is common in a loose
regulated context where the number of firms in non-compliance far outweighs that of
beyond-green firms. Under this circumstance, the more a firm keeps consistent with
peers, the less likely it will integrate environmental programs into business core practices.
In terms of self-determination, managers who view environmental protection as an
essential condition of firm’s survival or further development is more likely to encourage
internal eco-innovation to promote environmental performance than who perceive
environmental protection as a non-necessary issue. Likewise, firms that strongly perceive
reducing environmental harm to be a social duty is more likely to engage in
environmental practices than those consider it to be less social responsible (Gunningham
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& Grabosky, 1998). Nevertheless, less committed firms are more likely to race to the
bottom rather than being environmental proactive. Thus, we predict that:
Hypothesis 3. CGC moderates the indirect effect of RA on PEM through CCSs.
The mediation effect of CCS is stronger when a firm has a higher degree of green
commitment.
Figure 1 about here
Methodology
Sample and Data Collection
We collected data by conducting questionnaire surveys with manufacturing firms
operating in the Pearl River Delta (PRD), Guangdong Province, China. The region leads
the nation as the forerunner of local environmental reform, making it a useful window for
identifying the frontier of ecological modernization in China (Yee, Lo, and Tang 2013).
Indeed, enterprises in this region have been increasingly under more legalistic regulation
and stricter enforcement from local EPBs (Francesch, Lo, and Tang 2012; Zhan, Lo, and
Tang forthcoming). At the same time, these enterprises have been under greater societal
and market demands for industrial pollution reduction from an increasingly affluent
society (Lo, Fryxell, and Tang 2010).
The questionnaire survey was administered in two stages. The pilot survey was
performed in late 2010 in a business environmental seminar with the objectives of pre-
testing the reliability of key variables and helping troubleshoot the questionnaire for the
main survey. Out of 110 questionnaires distributed, 71 were returned, with a response
rate of 61.7%. The Cronbach’s alphas range between 0.76 and 0.92, indicating that the
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measurements were reliable (Nunnally 1967). The main survey was implemented in early
2011, with logistic support from the management offices of four industrial parks in the
PRD region. Among the 300 enterprises selected, 121 of them responded, representing a
response rate of 40.3%.3 As a whole, a total of 192 completed questionnaires were
collected for data analysis.
Measurement
We developed the measurements following well-tested constructs in the current
literature. Items were first reviewed by a group of academics, industry experts, and local
EPB officials to ensure that the measures are relevant and easy to understand. Revisions
to the questionnaire were made based on these inputs. All items were measured in a
seven-point scale (1=extremely disagree, 7=extremely agree).
Dependent Variable
Proactive environmental management (PEM) is the dependent variable in this
study. It is difficult to measure a firm’s environmental proactive level since it does not
necessarily equal the sum of environmental plans and tools. A more feasible way is to
identify the major environmental programs/initiatives adopted to reflect a firm’s
proactive level. Based on the measurements developed in corporate environmental
management studies (particularly those in the Chinese regulatory context, e.g. Liu et al.,
2010; Lo, Fryxell, & Tang, 2010; Yee, Lo, & Tang, 2013), we asked respondents to
3 Response rates in both surveys were higher than those in recent environmental studies in U.S. (20%,
Christmann 2004; 13%, Darnall, Potoski, and Prakash 2010; 11.2%, Delmas and Keller 2005) or China (10.2%, Liu et al. 2010). This is perhaps due to the assistance we obtained from firms’ key stakeholders.
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describe the integration extent of 10 environmental programs into their management. By
providing intermediate values for enterprises that were considering or on the way of
taking up a green practice, we were able to obtain a more nuanced measure than a simple
dichotomous response that whether or not the company had already adopted it. For each
practice, we asked respondents: “What is the status of this practice (e.g. ISO 14001
certification), in your firm?” We presented the following seven-point scale: “not being
considered” (coded 1), “considered with no further implementation” (2), “pilot it without
official implementation” (3), “implemented but not the focus” (4), “currently
implementing as a focus” (5), “implementation and closely connected to other
departments” (6), and “successfully implemented as an integral part of business
operation” (7). We then summed them together to measure PEM (Cronbach’s alpha: .93).
Independent variables
RA: The measurements for resource availability are adapted from Russo and
Fouts (1997), which capture managers’ perceptions of a firm’s resource endowment. A
total of 12 items were used, including those related to technical resources, human and
financial capital, and various intangible resources. The Cronbach’s alpha is .87.
CCS: CCS is measured by 16 items, each with a statement for respondents to
indicate how strongly they agree that their company has adopted a certain compliance
style dimension. The Cronbach’s alphas of the four dimensions are: formalism (3
items)—α=.70, accommodation (4 items)—α=.72, referencing (4 items)—α=.78, self-
determination (3 items)—α=.73. The exploratory factor analysis results suggested that
four components accounting for 63.6% of the variance among the fourteen items. The
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CFA results showed that the hypothesized four-factor model yields a good fit (CFI= .95,
TLI = .93, RMSEA = .05; Chi-square = 102.52, Degrees of freedom = 66, p < .01). A
better fit was noted when compared with the one-factor model (∆χ2 =300.45, ∆ df=11,
p<.001). The χ2 /degrees of freedom (d.f.) ratios 1.55 (<2.0) indicates a very good fit
(Hair et al. 2010), and the RMSEA of 0.05 here is below the standard threshold (.08).
CGC: we developed the CGC measuring items by adapting Meyer and Allen’s
(1997) scale as the most widely used organizational commitment measurement. To be
more suitable for the re-conceptualized construct of corporate green commitment in this
research, we further revised the original items and excluded those not related to corporate
environmental management. A total of 11 items were phrased. Sample items are “we are
very proud to devote efforts into environmental issues” and “A green company is what
we aim at”. The Cronbach’s alpha was .85. Since we did not further differentiate the role
of sub-commitment dimensions, further validating analysis was not conducted.
Control Variables
Several control variables are included in the analysis: (1) years of operation in the
current location, (2) firm size, (3) export proportion, and (4) ownership. Firm size is
measured by the number of employees, and the effect of export proportion is controlled
by measuring export ratio in the firm’s annual sales. We introduced three dummy
variables to differentiate firms among four ownership groups: state-owned enterprises
(SOEs), state-controlled joint ventures (SJVs), foreign-controlled businesses (FCBs), and
privately owned enterprises (POEs).
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Results
Table 1 presents means, standard deviations, and correlations. Table 2 provides a
summary of surveyed companies’ PEM. The top four integrated environmental programs
(rated 5-6) are: recycling of resources and byproducts ( x = 5.39), routine environmental
audits ( x = 5.22), EMS certifications, ( x = 5.18), reduction in resources consumption
( x = 5.08). The least adopted proactive environmental practice is drafting an annual
environmental report ( x = 4.56), which is consistent with previous empirical results in
studying corporate environmental management in China (Liu, et al. 2010).
Table 1 about here
Table 2 about here
Tests of Mediation
We follow Baron and Kenny’s (1986) three criteria to test the mediation effects.
Table 3 shows the results. After entering all the control variables, RA was found
positively related to PEM (b = .712, p < .001). Therefore, hypothesis 1 is supported. At
the same time, RA was positively related to an adoption of accommodation (b = .473, p <
.001), referencing (b = .532, p < .001), self-determination (b = .462, p < .001), and
formalism (b = .543, p < .001). However, none of the CCSs (accommodation: b = .002,
n.s.; self-determination: b = .038, n.s., and formalism: b = -.089, n.s.) was related to PEM
when controlling the effect of RA, except referencing (b = .124, p < .05). In other words,
firm with more environmental resources are more likely to learn from external reference
groups, which in turn will lead to a better environmental performance. Thus Hypothesis 2
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about the mediation effect of CCSs is partially supported. Although the mediation model
was not significant, it suggested the presence of a potential moderator regulating the
mediation effects on PEM.
Table 3 about here
We also used a SPSS macro developed by Preacher and Hayes (2008) to test the
multiple mediator models. The advantage of testing them simultaneously is that one
learns if the mediation is independent of the effect of the other mediators4. The bootstrap
estimates are based on 5,000 bootstrap samples. An examination of the specific indirect
effects indicates that among all the four CCSs, only referencing is a mediator, since its
95% CI does not contain zero. In agreement with results of the product-of-coefficients
strategy, referencing dimension is the only significant mediator of the RA-PEM
relationship.
Tests of Moderated Mediation
Hypothesis 3 predicted that CGC moderates the indirect effect of RA on PEM
through CCSs, such that the mediation effect of CCS on the association between RA and
PEM are stronger when CGC level is high. We conducted hierarchical multiple
regressions to test our hypotheses following the steps suggested by Muller, Judd, and
Yzerbyt (2005). Following their procedure, the moderated mediation effect on PEM will
be confirmed if 1) b11 is significantly different from zero while b13 is not. 2) either (or
4 Following the advice of Baron and Kenny (1986) that different mediators should be conceptually distinct
and not too highly correlated, we found that the correlations of four CCSs ranging from .247 to .400.
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both) of two patterns should exist: both b23 and b34 are significant or both b21 and b35 are
significant. Three models as following were tested:
Y=b10+b11X+b12Mo+b13XMo+e1 (1)
Me=b20+b21X+b22Mo+b23XMo+e2 (2)
Y=b30+b31X+b32Mo+b33XMo+b34Me+b35MeMo+e3 (3)
As shown in column 2-4 in Table 4, the results from equation 1 indicate an overall
effect of RA on PEM (b11 = .892, p < .001). This effect is not moderated by CGC (b13 = -
.085, n.s.). In equation 2, there is a significant effect of RA (b21 = .437, p < .001) and a
significant RA × CGC interaction (b23 = -.112, p < .05) on the referencing dimension.
From the equation 3 results, we see that there is a significant effect of referencing on
PEM (b34 = .155, p < .05). Moreover, this is not moderated by CGC (b35 = .093, n.s.).
Thus a significant moderated mediation is noted: the effect of RA on referencing depends
on CGC, and the average partial effect of CGC on PEM is nonzero.
Column 2, 5, and 6 in Table 4 show the results of moderating role of CGC with
self-determination being the mediator. In equation 2, there is a significant effect of RA
(b21 = .291, p < .05) on self-determination. Moreover, this is not moderated by CGC (b23
= -.064, n.s.). In the equation 3 results, there is an insignificant effect of self-
determination on PEM (b34 = .06, n.s.) and a significant CCS × CGC interaction (b35 =
.243, p < .01). This significant interaction is indicative of moderated mediation. It means
that the magnitude of the indirect effect of RA, via self-determination, varies in
magnitude as a function of CGC. In other words, the partial effect of the mediator on the
outcome depends on the moderator (b35 ≠ 0), and there is an overall treatment effect on
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the mediator (b21 ≠ 0). As shown in column 2, 7, 8, 9, 10 in Table 4, the moderated
mediation of accommodation (b35 = -.056, n.s.) and formalism (b35 = -.050, n.s.) are not
significant.
Table 4 about here
Overall, H3 is partially supported. The effect of RA on referencing depends on
corporate green commitment, and the indirect effect of RA on PEM through self-
determination is depending on CGC. Figure 2 plots the interactive effect of self-
determination and CGC on PEM following the procedures outlined by Aiken and West
(1991) for testing simple slopes. As posited, the self-determination dimension is not
related to PEM (b = -.183, n.s.) when CGC is low but positively related to PEM (b =
.303, p < 0.01) when a firm’s CGC level is high. Similarly, Figure 3 shows the plot of the
interactive effect of RA on referencing at +/- SD around the mean of CGC. The
positive effect of resource availability on the referencing dimension is weaker under
conditions of a high green commitment (simple slope test: b = .328, p < .05) than it is low
(simple slope test: b = .542, p < .001). Therefore, the mediating effect of referencing is
stronger in firms with a lower level of green commitment.
Figure 2 about here
Figure 3 about here
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Discussions
Although resource availability is still a fundamental determinant of PEM, there
are indirect mechanisms through which such positive association sustains. In this study,
we explore how regulated enterprises allocate resources in different compliance styles-
formalism, accommodation, referencing, and self-determination -to achieve proactive
environmental management (PEM). Our empirical results have identified the mediating
effects of corporate compliance styles in bridging organizational resource and PEM, and
we also found that corporate green commitment can moderate these influences in subtle
ways.
A very interesting finding is that responsive and voluntary dimensions differ in
their role in connecting organizational resources with PEM. The finding that only
voluntary compliance style dimensions successfully translate firm capability into
proactive environmental management may suggest that firms’ intrinsic motivation is
indispensable in achieving environmental progress. The insignificant role of formalism
and accommodation might be partly explained by the unique regulatory context in China.
With regard to formalism, existing command-and-control dominated regulation may have
not provided enough incentives and guidance for firms to pursue progressive
improvement. In terms of accommodation, on one hand, it may means selectively joining
less investment-intensive programs that help secure minimum or symbolic compliance
instead of genuine improvement in proactive performance. On the other hand,
compromising with political demand may distract firms from focusing on their own
priority since many of those demands are temporary instead of a long-term cooperative
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form. Another possible sequel of “effective political intervention” might be the
undermined regulatees’ perceived legitimacy of environmental laws and regulations
(MacLean & Behnam, 2010). Overstated political interference may lead to a fallacious
perception of regulatees that consistent abidance with laws and regulation is unnecessary.
To achieve real environmental progress, therefore, a significant role of business internal
commitment should not be ignored in regulatory policy design and collaborative
environmental governance.
What approach that firms adopted to respond external regulatory pressure is
neither a sufficient nor necessary condition of better performance. The road towards
proactive corporate environmental management is quite different among firms with
different degree of green commitment. Corporate green commitment affects the
translation of compliance styles into actual proactive performance in an enterprise. In
firms with a higher level of green commitment, improved PEM is less likely to be
realized through referencing but more likely to be realized via emphasizing self-
discrepancy.
Overall, our research suggests that the existing theories on corporate compliance
and environmental management can be applied to the Chinese context to a large extent.
For example, the temporal natural-resource-based view of the firm can be applied to
study corporate greening process. Nevertheless, the specific compliance style dimensions
that firms adopted to respond to environmental regulation, and the mechanisms through
which these dimension transform organizational capability into genuine progress in PEM
may differ among regulatory regimes. Although corporate compliance in China is usually
20
largely related to accommodation when political and societal pressures are in place, what
cannot be ignored is that regulated enterprises are becoming increasingly independent in
pursuing proactive corporate environmental management.
Conclusions
This study contributes to the existing literature of environmental governance and
corporate environmental management on at least two fronts. First, the co-existence of
four CCSs shows that business firms do take requests from a variety of external
stakeholders into consideration and respond in different ways. The failure of formalism
and one-way accommodation by regulatees indicates that a collaborative scheme or
mutually beneficial government-business relationship is more promising in bringing
firms into proactive environmental management. Given the importance of intrinsic
motivation in promoting proactive corporate environmental management, environmental
policy making and implementation should pay more attention to the ways to enhance
firms’ intrinsic motivation for environmental protection. Furthermore, our findings
identify the importance of a multiple-stakeholder perspective in collaborative
environmental governance.
Second, by linking organizational commitment with corporate compliance, this
study suggests that a significant role of business internal commitment should not be
ignored when promoting proactive corporate environmental management. Our research
has identifed that in the developmental context of China, an increasing number of firms
have taken up environmental management practices due to internal commitment and
entrepreneurial spirit, instead of passive response to external pressure (as suggested in the
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conventional visdom), resembling a possible trend towards ecological modernization in
China (Mol, 2006; Yee, Lo, & Tang, 2013).
This research does have a few limitations. First, the survey was limited to one
specific region in China. Thus we cannot generalize our results to all firm types. A
second limitation is that because the research design was cross-sectional, the current
study is not able to inform CCSs changes over time. Therefore, many research questions
remain on both the theoretical and empirical research agenda to further study CCS. That
being said, this research has at least two major practical implications. To policy makers,
it is necessary to understand that firm-level diversity in environmental approaches and the
level of green commitment matters. Nevertheless, not all roads lead to Rome if policy
makers cannot adopt a combination of policy instruments to induce and encourage firms
with different environmental preferences to go proactive. Meanwhile, for regulated
enterprises, green commitment deserve further attention in order to improve a firm’s
environmental performance. Managers should realize that whether a selected
environmental approach or strategy can achieve an expected goal depends a lot on the
extent to which the company is genuinely committed to environmental protection.
22
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Attached figures
Figure 1 The Moderated Mediation Model
Attached tables
Figure 2 Interaction between Self-determination and CGC on PEM
Resource
Availability
Corporate Green
Commitment
Corporate
Compliance
Styles
Proactive Corporate
Environmental Management
27
Figure 3 Interaction between RA and CGC on Referencing
28
Attached tables
Table 1 Descriptive Statistics and Correlations
Mean
Std.
Deviation
1 2 3 4 5 6 7 8 9 10 11 12 13
1. RA 5.4157 .86168 1
2. Accommodation 5.4115 .94860 .462** 1
3. Referencing 5.2305 1.14405 .570** .351** 1
4. Self-determination 5.2521 1.08553 .452** .292** .400** 1
5. Formalism 5.7378 .99160 .524** .388** .285** .247** 1
6. CGC 5.6243 .79150 .786** .416** .495** .426** .543** 1
7. PEM 5.0193 1.36929 .734** .338** .526** .389** .276** .590** 1
8. Operation years 2.30 1.361 -.112 -.034 -.147* .046 .014 -.102 -.231** 1
9. Firm size 2.04 1.106 -.057 -.058 -.093 .153* -.076 -.025 -.057 .638** 1
10. Export 4.19 2.038 -.030 -.043 -.102 -.127 -.030 .039 -.088 -.058 -.139 1
11. Ownership_d1 .68 .469 .189** .100 .252** .006 .050 .177* .256** -.369** -.328** -.069 1
12. Ownership_d2 .17 .374 -.115 -.065 -.213** .021 -.027 -.022 -.153* .262** .265** .093 -.648** 1
13. Ownership_d3 .13 .332 -.058 -.040 -.042 -.020 .015 -.101 -.146* .076 .109 .023 -.547** -.169* 1
29
Table 2 Descriptive Statistics of PEM (N=192)
Mean Std. Deviation
Clean Production Assessment 4.98 1.780
EMS certifications, such as ISO 14001 5.18 2.011
Reduction in resources consumption, such as clean water and electricity, et al. 5.08 1.621
Substitution by renewable materials or energy sources 5.39 1.594
Routine environmental audits 5.22 1.645
Environmental training for managers 5.00 1.750
Environmental training for operatives 4.90 1.741
Setting environmental performance objectives as part of the annual business plans 4.93 1.705
Including environmental performance measures in management evaluations 4.95 1.801
Preparation and release of environmental reports 4.56 1.865
Table 3 Regression Results of the Mediating Role of CCSs (N=192)
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Steps and variables Estimate Estimate Estimate
(a) Control variables
Years of operation -.245*** .079 -.023 -.017 .159 -.227**
Firm size .156* -.088 -.004 .145 -.165 .136*
Export -.047 -.037 -.079 -.099 -.034 -.036
Ownershipd1 -.159 .080 .249 -.032 .008 -.188
Ownershipd2 -.184 .048 .042 .031 .051 -.186
Ownershipd3 -.268 .044 .089 -.049 .111 -.268*
RA .712*** .473*** .532*** .462*** .543*** .676***
Accommodation .002
Referencing .124*
Self-determination .038
Formalism -.089
Model F statistics 30.033*** 7.6*** 14.15*** 7.76*** 10.78*** 24.16***
Adjusted R2 .21*** .34*** .21*** .28*** .59***
30
Table 4 OLS regression results of moderated mediation
Referencing Self-determination Formalism Accommodation
Model 1 Model 2a Model 3a Model 2b Model 3b Model 2c Model 3c Model 2d Model 3d
Predictors
Years of
operation
-.301** .095 .012 .098 -
.303**
.093 .010 .103 -.322 .093 -.009 .073 -.210** .070 .055 .101 -.214** .070
Size .189* .092 .006 .097 .192* .091 .129 .100 .193 .091 .142* .088 .122 .068 -.039 .098 .136* .068
Export -.069 .069 -.079 .071 -.061 .067 -.122 .074 -.044 .068 -.173 .086 -.058 .050 -.039 .073 -.053 .051
owner_dummy1 -.580 .454 .340 .466 -.253 .451 -.305 .490 -.546 .444 -.058 .064 -.232 .158 .061 .226 -.201 .156
owner_dummy2 -.807 .464 -.024 .473 -.263 .457 -.172 .501 -.812 .453 -.115 .197 -.235 .127 .119 .184 -.232 .128
owner_dummy3 -1.216* .486 .143 .500 -.382 .478 -.354 .525 -1.188 .475 -.059 .161 -.302* .119 .100 .171 -.292* .118
X: RA .892*** .110 .484*** .086 .796** .087 .291* .118 .908*** .109 .249* .102 .677*** .081 .303*** .116 .655*** .082
MO: CGC .030 .116 .057 .085 .073 .082 .215 .125 .017 .114 .440*** .107 .077 .089 .161 .123 .041 .087
XMO: RACGC -.085 .053 -.115* .053 -.106 .062 -.064 .057 -.197** .064 .059 .049 -.032 .050 .047 .056 -.036 .047
ME: .190* .087 .060 .076 -.111 .062 -.033 .053
MEMO: .091 .075 .243** .078 -.050 .067 -.056 .062
* p < 0.05, **p < 0.01, ***p < 0.001
31