The Influence of Firms’ Pragmatic Legitimacy on Investors’ Perceptions of Their Environmental Protection Activities

Keigo Fujikura and Akitsu Oe ()
Additional contact information
Keigo Fujikura: School of Management, Tokyo University of Science, Tokyo 162-8601, Japan
Akitsu Oe: School of Management, Tokyo University of Science, Tokyo 162-8601, Japan

Sustainability, 2023, vol. 15, issue 18, 1-18

Abstract: This study demonstrates the mechanisms by which the pragmatic characteristics of legitimacy influence the promotion of corporate social responsibility activities, focusing on firms and investors. We hypothesize that the more aggressive a firm is in its environmental protection efforts, the higher the reduction in investment risk from its environmental performance. Multiple regression analysis was performed for Japanese chemical-related industries from 2017 to 2019. The results revealed that firms that balance environmental performance with business profits should invest in environmental protection activities and improve their environmental performance without touting profitability. The findings reveal the need to incorporate a profitability perspective when considering the relationship between environmental protection activities and investor perceptions.

Keywords: CSR; legitimacy; pragmatic characteristics; investor; environmental performance; information asymmetry (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:

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/18/13744/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/18/13744/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:18:p:13744-:d:1240087

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().