Environmental Policy, Environmental performance and financial distress in China: Do top management team characteristics matter?
This study investigates the effect of environmental performance that is driven by good environmental policies, regulations and management on firm’s financial distress, and consequently, ascertains the extent to which top management teams’ (TMT) characteristics can moderate the environmental performance–financial distress nexus in China using 749 firms over the 2009-2014 period (i.e., generating over 3,000 individual observations). Our findings are two-fold. First, our results indicate that increased environmental performance that is driven by good environmental policies tend to strategically reduce the extent of firm financial distress. Second, this nexus is moderated by TMT gender diversity, foreign exposure and political connection. We interpret our findings within neo-institutional, upper echelons and risk management theoretical perspectives. The findings are robust to the use of alternative measures of financial distress, estimation techniques and endogeneity problems.
The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.
Citation : Shahab, Y., Ntim, C.G., Chengang, Y., Ullah, F. and Fosu, S. (2018) Environmental policy, environmental performance, and financial distress in China: Do top management team characteristics matter?. Business Strategy and the Environment. pp.1–18.
ISSN : 0964-4733
Research Institute : Finance and Banking Research Group (FiBRe)
Peer Reviewed : Yes