Shielding or propelling? Political connections and corporate environmental sustainability: the moderating role of social performance feedback

Xiaonan Tuo and Jianzu Wu

Sustainability Accounting, Management and Policy Journal, 2025, vol. 17, issue 6, 1552-1576

Abstract: PurposePrior studies offer mixed evidence on how political connections (PCs) affect corporate environmental behavior. To address this puzzle, the authors distinguish between ascribed and achieved PCs and examine their differential impacts on corporate environmental sustainability (CES) by drawing on resource dependence theory and stakeholder theory. Moreover, this study aims to investigate the moderating role of social performance feedback (SPF).Design/methodology/approachUsing a fixed-effects model, the authors analyze a panel data set of 1,127 Chinese A-share listed firms from 2010 to 2022.FindingsFirms with ascribed PCs are less engaged in CES (shielding effect), whereas firms with achieved PCs are more involved in CES (propelling effect). Positive SPF strengthens both the shielding effect of ascribed PCs and the propelling effect of achieved PCs on CES, while negative SPF weakens the shielding effect of ascribed PCs.Practical implicationsIn politically embedded environments, firms should strategically differentiate and manage their PCs, to ensure that environmental initiatives are aligned with regulatory mandates, stakeholder demands and sustainability goals.Social implicationsBy uncovering the unequal effects of ascribed and achieved PCs on CES, this study reveals institutional inequalities rooted in political privilege, and underscores the role of stakeholder vigilance and public oversight in promoting corporate accountability, environmental justice and sustainable development.Originality/valueThis study reveals the double-edged effect of ascribed and achieved PCs on CES, and introduces SPF as a key contingency that shapes firms’ environmental strategy. By linking political ties, stakeholder evaluations and environmental sustainability, the authors develop an integrated framework that advances prior studies.

Keywords: Political connections; Corporate environmental sustainability; Social performance feedback; Legitimacy; ESG framework; Stakeholder management (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:sampjp:sampj-08-2024-0866

DOI: 10.1108/SAMPJ-08-2024-0866

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