The power of informal institutions: evidence from the impact of religious culture on corporate green governance in China

Lan Yang (), Yangyang Wang () and Huayan Geng ()
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Lan Yang: Southwestern University of Finance and Economics
Yangyang Wang: Southwestern University of Finance and Economics
Huayan Geng: Southwestern University of Finance and Economics

Empirical Economics, 2025, vol. 69, issue 1, No 7, 213-261

Abstract: Abstract Apart from formal environmental regulations, religious culture is considered a crucial element of informal regulations affecting corporate green governance (CGG) practices. Diverging from literature examining the association between local religious culture and CGG, our study employs a novel instrumental variable, i.e., the number of religious sites by city in the Qing dynasty. This allows for the exploration of the causal impact of religious culture on CGG, specifically pollutant discharge fees (PDF) and environmental information disclosure (EID), using 848 Chinese A-share listed firms across 14 polluting industries from 2009 to 2018. Our findings illustrate that local religious culture reduces corporate PDF and heightens EID by firms. Furthermore, mechanism analysis unveils that (1) religious culture enhances CGG by fostering corporate social responsibility (CSR) and public environmental awareness; (2) a significant substitution effect exists between religious culture and environmental regulation.

Keywords: Informal regulation; Corporate green governance; Religious culture; Pollution discharge fee; Environmental information disclosure; Instrumental variable (search for similar items in EconPapers)
JEL-codes: M14 Q59 Z12 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s00181-025-02741-0

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