Green by Affiliation? Ownership Identity and Environmental Management System Adoption in Chinese Business Groups

Ruxi Wang, Pursey Heugens*, Frank Wijen

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

2 Citations (Scopus)

Abstract

How does owner identity affect environmental management system (EMS) adoption by business group affiliates? While current research on EMS adoption is mostly focused on stand-alone Western firms, a marked uptake of adoption has unfolded in Eastern countries such as China, where business group affiliates are the dominant organizational form. This stark contrast between corporate interest and research attention has left a clear lacuna in our understanding of how systems that can reduce environmental impact diffuse across industrial settings. We argue that state, family, and foreign owners of affiliated firms show distinct propensities to adopt an EMS, owing to differences in legitimacy needs, ownership competencies, and group-level preferences to engage in systematic environmental practices. Logistic regressions based on data from listed Chinese business group affiliates between 2008 and 2019 show that state and family ownership negatively influence the likelihood of EMS adoption, whereas foreign control has a positive effect. More intragroup transactions exacerbate the low adoption propensity of family-owned firms. Our study contributes to the literatures on business groups and corporate environmentalism.
Original languageEnglish
Pages (from-to)1331-1360
Number of pages30
JournalJournal of Management
Volume50
Issue number4
Early online date3 Jan 2023
DOIs
Publication statusPublished - Apr 2024

Bibliographical note

Funding Information:
We appreciate the insightful comments and suggestions from Senior Associate Editor, Zeki Simsek, the two anonymous reviewers, Christopher Marquis, Heli Wang, Pasha Mahmood, Chi-Nien Chung, Joep Cornelissen, Flore Bridoux, and Jordi Surroca, conference participants at the SMS 36th Annual Conference (Berlin) and the 77th Annual Meeting of the Academy of Management (Atlanta, Georgia), as well as seminar participants at National University of Singapore, Peking University, and Erasmus University Rotterdam. We acknowledge the financial support of the National Natural Science Foundation of China (Grant No. 72202226).

Publisher Copyright:
© The Author(s) 2023.

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