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The Relationship between Corporate Environmental Responsibility and Firm Performance: A Moderated Mediation Model of Strategic Similarity and Organization Slack

Dang Van Thac (), Ninh Nguyen (), Xiangzhi Bu () and Jianming Wang ()
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Dang Van Thac: Business School, Shantou University, Guangdong 515063, China
Ninh Nguyen: Department of Entrepreneurship Innovation and Marketing, La Trobe Business School, La Trobe University, Bundoora, Victoria 3086, Australia
Xiangzhi Bu: Business School, Shantou University, Guangdong 515063, China
Jianming Wang: School of Business Administration, Zhejiang University of Finance & Economics, Hangzhou 310018, China

Sustainability, 2019, vol. 11, issue 12, 1-14

Abstract: There has been growing interest among business managers and academics in corporate environmental responsibility (CER), which represents a company’s focus on its long-term sustainability and society. Past research, however, has reported inconsistent and mixed results with regard to the link between CER and firm performance. This study, therefore, proposes and validates a moderated mediation model of strategic similarity and organizational slack to better explain the relationship between CER and firm performance. Data were obtained from 260 listed firms in China from 2015 to 2017, resulting in 780 firm-year observations. Multivariate data analysis indicates that strategic similarity mediates the relationship between CER and firm performance. Furthermore, organizational slack moderates the relationship between CER and strategic similarity and the indirect effect of CER on firm performance through strategic similarity. The findings of this study provide insights for business managers attempting to understand and enhance the quality of their decision making regarding CER. Importantly, business managers should engage in CER activity and pursue strategic similarity to deal with pressure from stakeholders while following the competitive speed of competitors in the marketplace.

Keywords: corporate environmental responsibility; sustainability; strategic similarity; organizational slack; firm performance; China (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2019
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