ABSTRACT This paper studies whether local informal environmental regulation can limit corporate ESG inconsistency, understood as the gap between what firms disclose about ESG and how they actually perform. Although ESG credibility has attracted growing scholarly attention, evidence remains limited on how community‐based supervision restrains the separation between symbolic disclosure and substantive action. Using Chinese A‐share listed firms from 2010 to 2022, this study finds that stronger local informal regulation is accompanied by a narrower ESG inconsistency gap. The channel tests provide evidence consistent with public attention and pollution‐control investment as potential transmission channels, but do not provide support for the environmental textual emphasis channel. Additional analyses show that the disciplining role of informal regulation depends on the surrounding governance setting: formal enforcement, capital‐market pressure, internal governance arrangements, and negative investor sentiment may dilute the role of social supervision. These findings highlight the macro‐level value of informal environmental regulation in emerging markets. Rather than serving only as a background institutional condition, informal regulation connects public environmental concern, local state response, and corporate ESG accountability. The study contributes to sustainable development and ESG governance research by showing how non‐state pressure can help curb symbolic‐substantive decoupling and strengthen the credibility of corporate sustainability practices.
ABSTRACT This study examines the impact of Environmental, Social and Governance (ESG) performance on corporate external financing needs (EFN), using a global panel comprising 3437 firms and 11,075 firm‐year observations. Drawing on theories from institutional, risk management and behavioral finance, we decompose short‐ and long‐run dynamics using correlated random effects models, addressing endogeneity through two‐stage least squares (2SLS) estimations. Our findings show that higher ESG performance significantly reduces EFN, with the greatest benefits accruing over the long term. Formal mediation analysis reveals that this relationship operates through four economic channels: enhanced asset tangibility, improved free cash flow generation, eased financial constraints and superior investment efficiency. A key contribution of this study is the identification of a U‐shaped relationship between the materiality of ESG reporting and EFN. Above an optimal threshold, information overload and compliance costs dominate, thereby increasing EFN. We also document that the mitigating effect of ESG varies across pillars and time horizons. These results emphasize the temporal, contingent and mechanism‐driven nature of ESG in corporate financing, providing actionable guidance for managers and policymakers seeking to align sustainability practices with financial resilience.
The goal of our research is to enhance our understanding of what organizations can do to decrease perceived hostility in the workplace. We propose that perceived workplace hostility develops as a function of a disregard for organizational ethics. Therefore, workplace hostility is unlikely to develop in organizations that embed organizational ethics in their infrastructure. One way to accomplish this is through an institutionalization of ethics. We rely on social information processing theory to explain how and when the institutionalization of ethics helps reduce workplace hostility. Across three studies, we find that the institutionalization of ethics is positively related to supervisory inclusive leadership. In turn, as supervisors demonstrate inclusive leadership, this decreases workplace hostility. The positive impact of the institutionalization of ethics on supervisory inclusive leadership was more salient for relatively younger employees compared to relatively older employees. Theoretical and practical implications are discussed.
This study examines whether the relationship between average board age and corporate social responsibility (CSR) is nonlinear and whether product market competition conditions this relationship. Drawing on Upper Echelons Theory and stakeholder, agency, and institutional perspectives, we argue that increasing board age initially supports CSR through greater experience, stakeholder knowledge, and reputational awareness, but eventually constrains it as conservatism and risk aversion become more pronounced. Using 2201 firm-year observations from 259 Vietnamese listed firms over 2015-2023, we estimate firm- and year-fixed-effects models and conduct extensive robustness and endogeneity analyses. The results reveal an inverted U-shaped relationship between board age and CSR. Because the estimated turning point is below the sample mean, most firms lie on the declining portion of the curve, producing a predominantly negative average association, especially for environmental and governance CSR. Product market competition serves as an important boundary condition: in less competitive industries (higher HHI), the negative effect associated with higher board age is weaker. The findings remain robust across alternative specifications, winsorized data, subgroup analyses, lagged models, fixed-effects instrumental-variable estimation, and two-step system GMM. By integrating a threshold-based account of board age with an external competitive boundary condition, this study explains when and why board demographics shape responsible corporate behavior in an emerging market.
Entrepreneurs today increasingly operate in conditions of radical uncertainty, where the future is difficult to predict and traditional risk-based decision-making models offer little support. In such contexts, decision-making becomes particularly challenging as entrepreneurs often face ethical dilemmas in their relationships with customers, employees, and business partners, as well as when operating within weak, ambiguous, or inconsistently enforced regulatory frameworks. This study examines how entrepreneurs manage "ethical storms" characterized by the convergence of diverse ethical conflicts and high-risk factors amid significant uncertainty. This study utilized a qualitative research design, incorporating narrative interviews and ethnographic observations involving ten founder-led entrepreneurial firms across four Western Balkan countries (Kosovo, Albania, Montenegro, and North Macedonia). The Western Balkans are identified by institutional instability, regulatory uncertainty, and economic fluctuation. The research findings demonstrate that entrepreneurs significantly depend on personal values, prior experiences, and corporate culture in their decision-making processes, particularly when formal regulations and probabilistic assessments are inadequate. In such uncertain settings, ethical reasoning emerges as an essential instrument for sustaining resilience, trust, and the generation of long-term value. By examining ethical decision-making under radical uncertainty, this study contributes to both entrepreneurial judgment and business ethics research. It shows that, in practice, entrepreneurs do not rely on formal ethical frameworks alone; instead, they draw on their personal moral compass as a pragmatic guide when navigating ambiguous and high-pressure situations.
