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Journal of Business Ethics

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Erschienen in: Journal of Business Ethics 1/2021

22.10.2019 | Original Paper

Greasing Dirty Machines: Evidence of Pollution-Driven Bribery in China

verfasst von: Yanlei Zhang

Erschienen in: Journal of Business Ethics | Ausgabe 1/2021

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Abstract

Environmental pollution has become a serious challenge in emerging markets. Using a unique survey of privately owned enterprises in China, this paper investigates how polluting firms respond to institutional pressures. We find that polluting firms conform to external pressures by combining relational activities and clean technology investments. However, some polluting firms alleviate regulative pressures by bribing government officials, which represents an unethical relational strategy to manage political relationship. We further analyze the contingency on firm-level political connection and local institutional conditions. Political connection buffers firms from institutional demand and demotivates firms’ willingness to respond to institutional pressures; stronger local civic activism and better bureaucratic governance curb the pollution-driven bribery, but they are not strong enough to enhance environmentally friendly practices. Collectively, our study demonstrates how polluting firms navigate institutional pressures in emerging markets, and it particularly highlights the pollution-driven bribery as an obstacle to sustainability.
Vorheriger Artikel Corporate Social Responsibility as Obligated Internalisation of Social Costs
Nächster Artikel Consumer Reactions to Tax Avoidance: Evidence from the United States and Germany

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Fußnoten
1
As reported by the World Health Organization (WHO), among the 499 most polluted cities during 2008–2016, 287 are in China. In 2015, 1.8 million people died in China because of pollution-related diseases (Landrigan et al. 2018).
 
2
The sample firms of CPES change every year, and the survey questions also show variations across years. Consequently, we cannot obtain a panel dataset, and the firm fixed effects model does not work in this case.
 
3
Duanmu et al. (2018) document the influence of market competition on environmental performance. The profit margin in our regression can partially capture the firm-specific market power (Kale and Loon 2011; Dass et al. 2015), and the industry-specific market competition can be captured by the industry fixed effects.
 
4
We also run an ex-post test to see whether local institutional conditions stimulate politically connected polluting firms’ responses to institutional pressures. We implement it by introducing the three-way interaction terms of Pollution Intensity, Political Connection, and local institutional conditions. The untabulated results show that the coefficients of three-way interaction terms are not statistically significant, implying that currently the local institutional conditions are not strong enough to push politically connected polluting firms out of their comfort zone.
 
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Metadaten
Titel
Greasing Dirty Machines: Evidence of Pollution-Driven Bribery in China
verfasst von
Yanlei Zhang
Publikationsdatum
22.10.2019
Verlag
Springer Netherlands
Erschienen in
Journal of Business Ethics / Ausgabe 1/2021
Print ISSN: 0167-4544
Elektronische ISSN: 1573-0697
DOI
https://doi.org/10.1007/s10551-019-04301-w

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