Research On The Influence Of Government Environmental Regulation On Corporate Environmental Strategy

China’s long-term,extensive economic development model has resulted in significant pollution and resource scarcity issues.Green development has been proposed at the national level as a primary factor for achieving high-speed economic growth and overcoming the tension between the environment and economic development to build a resource-conserving and environmentally-friendly society.Among these,corporate environmental strategy,as an organizational management approach capable of effectively reducing environmental risks,has emerged as a critical endeavor for manufacturing companies seeking to achieve sustainable development.Because of the magnitude of the environmental management undertaking and the difficulties of achieving significant economic gains in the short term,rational companies lack the incentive to adopt proactive environmental policies.Given the externality of environmental pollution problems,it is vital to employ the government to restrain and regulate.Hence the function of government environmental regulations is critical to corporate environmental strategy.China’s environmental regulating system is growing more complex,progressing from coercive constraint regulation to economic motivational regulation.With the development of ownership of public monitoring,it has progressively attained the importance of heterogeneous environmental regulation.However,companies may face additional operating cost pressures to comply with governmental environmental regulations,resulting in a lack of corporate initiative,requiring a clear understanding and cognition of environmental regulations among the top management team(abbreviated as top manager’s cognition).Whether there is an effective drive mechanism to corporate strategic decisions during the environmental strategy formulation process,and how the perception of government environmental regulations’ pressure influences top manager’s cognition of environmental strategy formulation.To that aim,the core study issue of this paper is the impact of environmental regulation on corporate environmental strategy,and it poses the following questions for further discussion: Do various types of environmental regulations encourage corporate environmental strategy? Is it possible that government environmental regulation indirectly impacts corporate environmental strategy via top manager’s cognition?This research investigates the impact of various types of government environmental regulations on corporate environmental strategies.It incorporates top manager’s cognition as an intervening variable to further investigate the effect mechanisms.First,this article examines the relevant concepts,theoretical foundations,and previous research findings before categorizing government environmental regulations into three types: command-and-control regulation,market-incentive regulation,and socially engaged regulation.A conceptual model of the influence of government environmental regulations on corporate environmental strategies is constructed,with top manager’s cognition serving as an intervening variable,and relevant research hypotheses are provided.Second,this article uses A-share manufacturing listed company as the research object and 2015-2020 as the research period to filter.This paper identifies the variable measurement method,obtains relevant data for measurement,and determines the appropriate data analysis method based on the variables’ features.Finally,the impact of government environmental regulations on corporate environmental strategies and the intervening effect of top manager’s cognition are evaluated.A robustness check is performed to analyze,discuss,and draw conclusions from the study.This paper discovers that:(1)command-and-control environmental regulation and socially engaged environmental regulation have a significant positive impact on corporate environmental strategies,whereas market-incentive environmental regulation has a significant negative impact on corporate environmental strategies.(2)Top manager’s cognition plays a partially intervening role in the impact of command-and-control,market-incentive,and socially engaged environmental regulations on corporate environmental strategies.This paper makes the following contributions:(1)it investigates the effects of various government environmental regulations on corporate environmental strategies from the standpoint of heterogeneity of government environmental regulations,thus enriching research findings on heterogeneous environmental regulations.(2)By introducing top manager’s cognition as an intervening variable,it investigates the mechanism of top manager’s cognition in the influence of government environmental regulation on corporate environmental strategy,promoting the organic integration of institutional theory and higher-order theory.Thus,it enriches research in related theoretical fields and expands the analytical framework of corporate environmental strategy.(3)Based on existing research,it remedies the shortcomings of previous studies in which only a single substitution variable was selected to measure government environmental regulation.It quantifies the policy text at the central level in two dimensions: policy strength and policy measures.It also provides a comprehensive picture of the government’s environmental governance in China,offering new ideas for measuring government environmental regulation.