The synergistic influence of board capital and environmental regulation in driving environmental performance: insights from heterogeneous analysis

Ishmael Wiredu (), Samuel Yayra Agbadzidah () and Prince Kofi Boadi ()
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Ishmael Wiredu: Jiangsu University
Samuel Yayra Agbadzidah: Wuhan Textile University
Prince Kofi Boadi: Wuhan Textile University

SN Business & Economics, 2025, vol. 5, issue 8, 1-28

Abstract: Abstract Amid growing global concern for corporate environmental responsibility, understanding how internal governance structures and external regulatory pressures jointly shape environmental outcomes has become increasingly important. Drawing on stakeholder theory and resource dependence theory, this study examines the synergistic influence of board capital and environmental regulation on firms’ environmental performance, with a particular focus on the mediating role of sustainability committees. Using a panel dataset of 316 listed construction firms in China from 2012 to 2022, the study employs Dynamic Common Correlated Effects (DCCE), Pooled Mean Group (PMG) estimators, and other instrumental variables to test the proposed relationships. The results reveal that both board human capital and social capital positively influence environmental performance, and that sustainability committees play a significant mediating role. Additionally, environmental regulation not only directly improves environmental performance but also strengthens the positive effects of board capital. The study emphasizes the importance for firms to build knowledgeable and well-connected boards and to institutionalize environmental governance structures. Policymakers are encouraged to design regulatory frameworks that foster both external compliance and internal sustainability capacity. The research contributes new insights into corporate environmental governance within the emerging economy context, offering important implications for theory and practice.

Keywords: Environmental performance; Board capital; Sustainability committee; Environmental regulation; Construction firms; China (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-00870-3

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