The Relationship between Subjective Status and Corporate Environmental Governance: Evidence from Private Firms in China

Yue Tang, Xueliang Tang () and Hong Shen ()
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Yue Tang: Business School, Yangzhou University, Yangzhou 225012, China
Xueliang Tang: Business School, Yangzhou University, Yangzhou 225012, China
Hong Shen: Business School, Yangzhou University, Yangzhou 225012, China

Sustainability, 2023, vol. 15, issue 11, 1-22

Abstract: Private enterprise governance is influenced by how status is perceived by business owners. In this essay, the role of business owners’ subjective statuses on their decisions on pollution control is discussed, along with social-psychology-based justifications. This study distinguishes front-end pollution treatment from back-end pollution treatment and finds the following: (1) A higher subjective status increases the front-end pollution control input but has no discernible impact on the back-end pollution control input. (2) Both the front-end and back-end control inputs are significantly influenced positively by a subjective economic status (ability motive). (3) A subjective social status only increases the front-end pollution control input (altruistic motive). (4) A subjective political standing (prestige motivation) significantly lowers environmental violations of businesses more than it does front-end or back-end inputs. (5) A subjective status can also boost owner expectations and business confidence, as well as help businesses to make the best pollution control measures. The optimum of private firms’ pollution control strategies depends heavily on their subjective status when the government’s pollution regulations are lax. The importance of subjective status is also influenced by how well capitalized private businesses are. This paper offers a novel perspective on the value of social governance from the viewpoint of maximizing the pollution management of private firms. It argues that raising the subjective status of private entrepreneurs has value.

Keywords: private enterprises; subjective status; environmental governance; social psychology (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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