Extended Producer Responsibility and corporate performance: Effects of environmental regulation and environmental strategy

Benhong Peng; Yu Tu; Ehsan Elahi; Guo Wei

doi:10.1016/j.jenvman.2018.04.068

Extended Producer Responsibility and corporate performance: Effects of environmental regulation and environmental strategy

J Environ Manage. 2018 Jul 15:218:181-189. doi: 10.1016/j.jenvman.2018.04.068. Epub 2018 Apr 19.

Authors

Benhong Peng¹, Yu Tu², Ehsan Elahi³, Guo Wei⁴

Affiliations

¹ School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, PR China; Institute of Climate Change and Public Policy, Nanjing University of Information Science & Technology, Nanjing 210044, PR China.
² School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, PR China. Electronic address: tuy2016@foxmail.com.
³ Business School, Nanjing University of Information Science & Technology, Nanjing 210044, PR China.
⁴ Department of Mathematics & Computer Science, University of North Carolina at Pembroke, Pembroke, NC 28372, USA.

PMID: 29679824
DOI: 10.1016/j.jenvman.2018.04.068

Abstract

While contemporary manufacturing technologies stimulate the industrial revolution and promote the rapidly changing global economy, it has caused enormous environmental negative externalities and managing the industrial waste remains a primary challenge, especially for fast developing countries such as China. Though existing studies explored the influence of Extended Producer Responsibility (EPR) legislations on environmental externalities, only fewer researches aimed at policy issues. Particularly, the relationship among environmental regulations, environmental strategies and corporate performance in the EPR system has not been deeply investigated. To fill this gap, this research will focus to assess the economic aspect and environmental performance associated with the environmental regulations and strategies. For this purpose, 208 cross-sectional questionnaires were administered with three major high-pollution industries, electrical and electronic, automobile and lead-acid storage battery industries. To accomplish this study objective, we employ a two-step approach: firstly, validity tests for environmental regulation and environmental strategy along with the corporate performance are performed by the factor analysis method, and secondly, the structural equation model is utilized to test the study hypotheses. Results reveal that command and control (CAC) and market-based incentive (MBI) environmental regulations are significantly impacting on the reactive environmental strategy (RES); however, the proactive environmental strategy (PES) only has a significant relationship with MBI regulation. On the other hand, RES only has a significant relationship with the enterprises economics performance, while PES has a statistically significant relationship with both economic and environmental performance of enterprises. Therefore, the central government and its local offices are strongly urged to coordinate the industries by making, implementing and monitoring necessary and feasible environmental laws and regulations.

Keywords: Corporate performance; Environmental regulation; Environmental strategy; Extended producer responsibility; Structural equation model.

MeSH terms

China
Cross-Sectional Studies
Industrial Waste*
Organizations
Waste Management*

Substances

Industrial Waste