How Can Entrepreneurs’ Social Organization Identity Affect the Environmental Investment?

Abstract

Political connections and corporation social responsibility (CSR) play important roles in firms’ investment decisions. This paper examines empirically how distinct social organization identities of the entrepreneurs affect their environmental investment using Chinese private enterprises from the 13th national private enterprise sampling survey in 2018. The results show that: (1) The social organization identities of private entrepreneurs has a significant positive effect on firms’ environmental investment; (2) The positive effects decrease in sequence for government-pushed organizations, industry associations and fellowship organizations; (3) There are significant heterogeneities among regions, industries, external risks and internal ownership structures; and (4) Environmental investment has a significant positive effect on firms’ economic performance. After the methods of variable substitution, instrumental variable, PSM, etc., the results are all robust, which ensures the reliability of our findings. Finally, the research proposes policies of voluntary environmental management for Chinese private enterprises with different social organization identities.