University of the Chinese Academy of Sciences, China and University of Groningen, Netherlands

Green Responsibility and the Black Swan: How Corporate Environmental Practices Shape Organizational Resilience

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ABSTRACT

How to help companies survive the crisis has become a growing concern in the rapidly changing global business landscape. Despite corporate efforts to address grand societal challenges may contribute to organizational capability to respond to crises, the potential complex and nonlinear associations between them have received little attention, particularly from an international business standpoint. We focus on the resilience-related consequences of corporate environmental practices and how the relationship is shaped by the nation-level institutional environment and firms’ stakeholder diversity. Drawing on Stakeholder theory, we explore the impact of environmental practices in mitigating the severity of loss by leveraging this exogenous shock caused by COVID-19. We empirically investigate this relationship using global data of 12558 firms from 32 countries. We find that there is an inverted U-shaped impact of environmental practices on organizational resilience. This effect is enhanced when the institutional environment deteriorates or when firms connect to overseas players. The study makes a pioneering attempt to reveal the complex and nonlinear relationship between social and environmental practices and organizational resilience from an international business perspective, and also provides practical implications on how firms can better foster resilience through environmental practices. 

BIOGRAPHY

Xiongkai is a Ph.D. candidate in the joint dual-degree program between the School of Economics and Management at the University of the Chinese Academy of Sciences and the Faculty of Economics and Business at the University of Groningen. He conducts several quantitative research projects using econometric analysis, particularly causal inference techniques, to study the antecedents and consequences of corporate environmental practices. His first study explores the tension between corporate sustainability goals and resilience goals, examining the inverted U-shaped relationship between corporate environmental practices and organizational resilience. The second study investigates the relationship between internationalization challenges, institutional complexity, and the establishment of Chief Sustainability Officers (CSOs) in companies, revealing the different roles of informal and formal institutions in driving companies to appoint substantive and symbolic CSOs. The third project explores how natural and man-made environmental risks differently impact corporate attention allocation and the subsequent tactical and strategic environmental practices.