Social trust and environmental performance in China: Does state ownership matter?

• DOI: 10.1016/j.econmod.2023.106328
• Publication Date: 2023-04-21T18:42:21Z
• Authors: Yasir Shahab; Peng Wang; Ammar Ali Gull; Yugang Chen; Collins G. Ntim
• Keywords: Social trust; State ownership

The recent surge in global environmental issues and climate change has stimulated researchers to explore different determinants which can reduce firms’ carbon footprints and enhance environmental performance. In particular, China – the world’s greatest polluter– has continued to attract extreme criticism due to its engagement in environmental deterioration. This research uses Chinese firms’ data from 2010 to 2017 to explore the effect of social trust on environmental performance. The findings indicate that firms in areas with high levels of trust are associated with improved environmental performance, signifying altruistic reflections in their corporate decision-making. Moreover, this nexus is (a) stronger in non-state-owned enterprises and (b) not driven by provincial development or by firms in more polluting industries. Our research offers new evidence of how social trust stimulates and inspires firms to effectively work towards a shared goal of protecting and restoring the environment by enhancing environmental performance.