Spatial Dynamics between Firm Sales and Environmental Responsibility: The Mediating Role of Corporate Innovation

Abstract

Corporate environmental responsibility (CER) is increasingly gaining interest among researchers and practitioners. Despite this extensive interest, systematic research regarding the effect of sales on environmental performance remains scarce. In this study, an empirical analysis on a sample of 909 Chinese listed companies from 2010 to 2016 showed that sales positively impact environmental performance. This study also showed that corporate innovation mediates the relationship between sales and environmental performance. Furthermore, this study showed that environmental performance has a positive spatial spillover effect. Enterprises appear to promote their own environmental performance as a response to a rise in the environmental performance of their neighbors. The external control theory of organization has important reference significance and explanatory power for CER behavior in emerging economies.