The Influence Mechanism of Corporate Environmental Responsibility on Corporate Performance: The Mediation Effect of Green Innovation

Abstract

Facing the current increasingly severe environmental problems, the government and the public make increasingly strong demands for environmental protection. It is the key to sustainable development to study how to motivate enterprises to actively fulfill their environmental responsibilities and practice green production mode. This study selects large steel enterprises of the China Iron and Steel Association from 2009 to 2017 as samples to empirically analyze the effect and mechanism of environmental responsibility on corporate performance. The results show that corporate environmental responsibility (CER) has a significant promoting effect on corporate performance, and green innovation has a significant mediating effect between them. Furthermore, from the perspective of regional and ownership heterogeneity, the differences in the mediating effect of green innovation on the relationship between corporate environmental responsibility and corporate performance are explored. Finally, based on the research results, this paper suggests that enterprise managers should balance the relationship between enterprise performance and environmental protection, so as to achieve a “win–win” situation.

1. Introduction

Human activities since the Industrial Revolution, especially the discharge of waste generated by the massive consumption of fossil energy, have led to environmental deterioration, and frequent environmental pollution incidents have brought severe challenges to human survival and development, and have brought serious challenges to global food, water, ecology, energy, infrastructure, etc. The lack of safety of facilities and people’s lives and properties poses a long-term major threat. These environmental issues have aroused great public attention, and it is urgent to deal with environmental issues [1].

The environmental pollution caused by the production and operation of enterprises has brought great trouble to people’s production and life. As the main bearer of economic development, enterprises should bear the responsibility and risk of environmental problems brought about by their own economic development. Enterprises play an important role in the process of environmental governance. Enterprises can solve environmental problems through effective environmental management and strategic investment in cleaner production. In order to solve environmental problems, enterprises need to enhance ecological awareness and carry out environmental protection activities [2]. Corporate environmental responsibility (CER) fully reflects the understanding and commitment of enterprises to environmental problems. In this context, how to enhance the awareness of enterprises to fulfill environmental responsibility is the key to achieve sustainable development strategy at this stage. Barney believes that enterprises can achieve sustainable development when dealing with natural environmental problems [3]. In order to achieve sustainable development, enterprises must pursue profits without neglecting environmental protection, because environmental protection will affect the current and future competitiveness of organizations.

Enterprises need to consider environmental issues in their daily operations, and the development of enterprises should be within the scope of environmental load, otherwise the environment will be damaged and difficult to recover, which is not conducive to ecological and economic sustainable development. Enterprises should grasp the balance and coordination between environmental protection and economic benefits, and under the condition of ensuring the reduction in environmental pollution, in order to promote the continuous improvement of enterprise benefits. A series of documents including “Agenda 21” and “United Nations Framework Convention on Climate Change” clearly link economic development with environmental protection and call on the world to take action to protect the environment, advocate actively fulfilling environmental responsibilities, and achieve sustainable development.

The contribution of Chinese iron and steel enterprises to the development of the national economy is crucial, but as iron and steel enterprises have high energy consumption, high pollution, and high emissions, they have an inescapable responsibility for preventing and controlling resource depletion and environmental pollution, and they should take the initiative to assume environmental responsibility. Enterprises should properly handle the relationship between environmental responsibilities and corporate performance, and should fulfill their environmental responsibilities in the process of their own survival and development, make decisions that are beneficial to both the enterprise and the environment, and achieve sustainable economic and social development.

Therefore, based on resource-based view and institutional theory, this paper combines corporate environmental responsibility with corporate financial objectives to explore the impact of corporate environmental responsibility on corporate performance, so as to provide richer empirical evidence to explain the relationship between the two. The innovation of this paper is mainly reflected in two aspects. First, the SBM super-efficiency model is used to calculate corporate environmental responsibility, and the results are more accurate. Second, we selected green innovation as a mediating variable to construct a mediating effect model, and empirically tested the transmission mechanism and impact degree between corporate environmental responsibility and corporate performance. These methods enrich the related research on the impact of corporate environmental responsibility on corporate performance and are useful supplements to the existing research. It provides new ideas for improving enterprise environmental management and provides reference suggestions for enterprises to actively undertake environmental responsibilities.

The rest of the paper has been organized as follows: The review of previous studies is covered in Section 2, corporate environmental responsibility is measured in Section 3, methodological framework is defined in Section 4. Section 5 is the empirical analysis, and the Section 6 is the discussion based on the empirical results, Section 7 concludes the paper and provides policy implications.

2. Literature Review and Research Hypotheses

This section reviews and sorts out the relevant research literature on corporate environmental responsibility, and puts forward corresponding theoretical assumptions for the research on the impact and mechanism of corporate environmental responsibility on corporate performance.

2.1. Research on Corporate Environmental Responsibility

In recent years, enterprises have paid more and more attention to their own impact on the environment, and their practices on environmental management have become more specific and in-depth, and they have tried to mitigate the negative impacts on the environment through these management practices. Shrivastava’s research is the first to propose that the management style of enterprises is changing to “ecology-centric” to highlight the relationship between ecological enterprise sustainability and the environment [4]. Research seeks effective ways to systematically renew natural resources and minimize waste and pollution. Nowadays, scholars use a series of variables to identify and evaluate environmental responsibility, including pollution reduction plan, the degree of organization to protect natural resources, the voluntary participation in environmental restoration, the rationality of ecological design practice, and the feasibility of systematically reducing waste and emissions in practice [5,6]. Academia and the industry have reached a consensus on the importance of corporate environmental responsibility, believing that corporate environmental responsibility is an essential link in the process of achieving sustainable development, and the behavior of undertaking corporate environmental responsibility has received common attention in terms of the environment and society [7].

2.1.1. Resource-Based View

In order to understand how the natural environment affects management decisions, scholars began to introduce a more resource-based view into the academic research of business management [8]. The resource-based view adds environmental elements to the original resource-based view, emphasizes the importance of ecological environment to the sustainable development of enterprises, and endows the core role of ecological environment. The resource-based view assumes that enterprises can achieve sustainable development when dealing with natural environmental problems [3]. The core principle of the resource-based view is that reducing the consumption of resources and increasing public regulation will challenge enterprises to develop new strategies, but at the same time, it can help enterprises to establish sustainable competitive advantages and reduce the impact of enterprises on the environment. One of the most basic assumptions of the resource-based view is that the natural environment represents a unique, rare, and valuable resource, and enterprises that develop strategies around the effective utilization of natural resources will generate greater economic, social, and environmental values [9]. Research evidence shows that, even though a company may operate in different markets and management systems, formulating a pollution prevention strategy is still an important basis for determining the sustainable development of an enterprise at the economic, social, and environmental levels [10]. In addition, the resource-based view emphasizes the important role of the legality of the environment and, especially, environmentally sensitive industry enterprises are put forward, so enterprises will be more willing to improve the environment legality in capital investment, because the legality and legitimacy can reduce the challenges enterprises may encounter in the process of environmental liability risks, improve the enterprise reputation, improve enterprise access to resources, and strengthen the relationship between enterprises and stakeholders.

The proposal of the resource-based view has long-term management and policy significance for enterprise management. To achieve sustainable development, organizations must pursue profits without neglecting the ecological environment and human interests, because environmental protection will affect the current and future competitiveness of organizations.

2.1.2. Institutional Theory

Institutional theory has been widely used to study corporate environmental issues and practices [11,12]. Institutional theory holds that an enterprise is an open system, the boundary between it and the surrounding environment is blurred, and they permeate each other. The development of an enterprise is not only subject to pressure related to technology and resources, but also to pressure related to the surrounding institutions, belief, and custom [13]. Dimaggio and Powell emphasized that the institutional environment restricts the strategic choice of enterprises [14]. Legitimacy is a core concept of institutional theory, which refers to whether an organization’s behavior conforms to certain social systems and cognitive norms [15]. In order to be recognized, enterprises should not only comply with legal requirements or market demands, but also conform to mainstream social norms and values [16]. If stakeholders do not recognize the activities of the enterprise, then the enterprise faces legitimacy pressure. For enterprises, regulatory pressure mainly comes from government agencies, customers, and NGOs [17]. Delgado-Ceballos et al. found that stakeholders can influence the environmental behavior of enterprises through various channels, including environmental regulations, environmental reports of NGOs, social media supervision, and resistance of customers and suppliers to non-environmental products [18]. Generally speaking, green behavior has become an important way for enterprises to cope with external pressure [17]. The more legitimacy pressure a company receives from its stakeholders, the more likely it is to adopt a green strategy [19].

In recent years, more and more attention has been paid to the illegal behavior of enterprises, especially in environmental aspects (such as the release of toxic substances and emissions that contribute to global warming) [20]. Enterprises began to take environmental performance into consideration and re-evaluate their participation in enterprises. For example, investors lowered the share price of polluting enterprises and the government introduced emission cost policy [8]. Under this pressure, with the promulgation of environmental laws and regulations by the government and the legislature, the external environment of enterprises is also changing. Enterprises are being forced to re-evaluate their strategic approach to the natural environment and environmental protection measures are having an increasing impact on their operations. In addition, Institutional theory focuses on the impact of non-market institutions on corporate policies [21]. This suggests that firms are not always profit maximizers and that their policies often reflect responses to legitimacy pressures. To win the trust of outside agencies, businesses can have a compelling reason to green their products and provide consumers with sufficient and verifiable information on these topics. According to institutional theory, in order to obtain legitimacy and survive, enterprises tend to comply with the norms and institutions prevailing in their environment [14].

Based on previous studies [9,22], this study defines corporate environmental responsibility as the behavior of enterprises voluntarily bringing environmental factors into daily operations. It is the responsibility of pollution reduction and resource consumption that enterprises should bear in order to maximize economic benefits in the process of production and operation, and it is the contribution of enterprises to sustainable development.

2.2. Research on the Relationship between Corporate Environmental Responsibility and Corporate Performance

In the past economic development, enterprises often only took into account the short-term interests of economic development, wantonly destroying and squandering environmental resources, ignoring the long-term consequences for the environment and society.

In recent years, more and more attention has been paid to the illegal acts of enterprises, especially in the environment (such as the release of toxic substances and the emissions that exacerbate global warming). Enterprises began to take the environmental performance into account, and reassessed their participation. For example, investors reduced the share price of polluting enterprises, the government introduced the policy of emission costs, and consumers considered the environmental concept of enterprises when purchasing products and services [8]. In this context, there are more and more studies on the impact of corporate environmental responsibility on corporate performance. For the empirical research on the relationship between corporate environmental responsibility and corporate performance, there are mainly four conclusions: Promoting relationship, inhibiting relationship, non-linear relationship, and no significant correlation.

First, corporate performance of environmental responsibilities will improve corporate performance [23,24]. Cai and He screened a sample of US listed companies from 1992 to 2011, and formed a stock pool based on companies with better KLD indicators. The results show that from the fourth year, these companies have an investment return that exceeds the industry average return by more than 3% [25]. Clarkson analyzed the average ROE, average EPS, and average ROC data of the paper industry, and empirically studied the impact of corporate environmental management on profitability. The results show that the better the corporate environmental management, the higher the corporate profitability will be [26]. Freeman believes that in the long run, corporate performance is positively related to corporate environmental responsibility [27]. McLaughlin and Klassen found that after enterprises enhance their environmental responsibility management, their market returns and stock prices will increase, resulting in an increase in the expected value of enterprises [15]. Robert and Mahoney empirically studied the relationship between corporate environmental responsibility and corporate value in the Canadian Toronto stock market, and found that there is a significant positive correlation between environmental responsibility and corporate value [28]. Hang et al. found that improving environmental performance has no short-term impact on corporate financial performance, but it significantly benefits in the long run, which is consistent with Porter’s hypothesis [29]. Second, corporate performance of environmental responsibility will inhibit corporate performance [30]. Some scholars believe that corporate environmental responsibility will increase costs [31], reduce corporate benefits [32], and may have a negative impact on economic performance [33,34]. Thirdly, there is a non-linear relationship between corporate performance of environmental responsibility and corporate performance [35,36,37]. Fourth, there is no significant relationship between corporate performance of environmental responsibility and corporate performance [38,39,40].

On the basis of previous research, the theoretical link between corporate environmental responsibility and corporate performance will be based on resource-based theory and institutional theory. The resource-based view holds that enterprises should incorporate environmental protection into their core operation and strategic management systems. They view CER as a unique resource or means, or as a way in which management can run the organization to generate higher revenue or reduce costs to improve financial performance [41]. At present, it is widely believed that good performance of environmental responsibility by enterprises can effectively reduce energy use and waste generation, so that enterprises can save costs [42].

Faced with increasingly severe environmental problems, enterprises need to actively undertake environmental responsibilities and conduct environmental management. Some scholars have found that the fulfillment of environmental responsibilities by enterprises will prompt enterprises to demonstrate a high level of environmental management capabilities, in order to achieve social legitimacy and avoid government regulatory risks, thereby increasing corporate benefits [43]. Research based on institutional theory shows that even if compliance with environmental regulations incurs additional costs, it can also reduce costs in other areas (such as waste treatment technology) [44]. Many studies have explored the factors that promote enterprises to participate in environmental responsibility and their positive impact on corporate performance [45,46]. Spicer actually tracked and investigated the relationship between environmental responsibility and corporate performance. The study found that if the driving force to reduce pollution only comes from legislative coercion and public pressure, then the relationship between environmental responsibility and corporate performance is fragile and short-lived [47]. In the long run, if enterprises actively fulfill their environmental responsibilities, take effective measures to save energy and reduce emissions, establish an excellent corporate image of environmental protection, and safeguard the rights and interests of stakeholders, they will be able to receive government environmental subsidies. Through the vigorous publicity and reporting of the media, they can improve their image, increase product sales, bring lasting profits, and realize sustainable development. Therefore, we propose the following assumptions:

Hypothesis 1 (H1):

Corporate environmental responsibility has a positive impact on corporate performance.

Recent studies have begun to delve into the transmission mechanism between corporate environmental responsibility and corporate performance [48]. If the enterprise managers lack understanding of the environmental management transmission mechanism, the enterprise’s environmental management decision making will not be able to demonstrate its due value.

2.3. Research on the Transmission Mechanism of Corporate Environmental Responsibility to Corporate Performance

Although some early studies have explored the more general relationship between corporate environmental responsibility and corporate performance, in recent years scholars have not only studied whether corporate environmental responsibility can improve corporate performance, but also tried to find out the potential mechanism of corporate environmental responsibility affecting corporate performance [49].

In terms of potential intermediary mechanisms, some scholars have studied how legitimacy regulates the impact of CER on corporate performance. As a signal to protect the environment, CER enhances corporate legitimacy and thus improves corporate performance [50]. Yang et al. took 677 enterprises as the research object to explore the impact of the existence of environmental NGOs (ENGOs) on the performance of corporate environmental responsibility. The results show that environmental NGOs play an important intermediary role between government regulation and enterprise implementation [2]. Based on the stakeholder theory, Peng et al. established a mediation effect model to reveal the important relationship between environmental regulation and corporate environmental responsibility [51]. Based on the theory of institutions and signaling, Wei et al. explored how corporate environmental responsibility affects the performance of enterprises in abnormal institutional environments. The results show that CER indirectly affects corporate performance through the mediating effect of commercial and political legitimacy [52]. Using the unique data set of Chinese listed companies from 2008 to 2014, Ning et al. studied how corporate social responsibility affects different types of corporate environmental product innovation and corresponding corporate performance. The empirical results show that sustainable product innovation plays an intermediary role between strategic corporate social responsibility and corporate performance [53]. In addition, some scholars have also identified some important intermediary mechanisms, including corporate reputation [54], external environmental management [55], customer satisfaction [56], internal intangible resources [57], consumer trust [58], and environmental management capabilities [59].

This paper will explore the potential transmission mechanism of corporate environmental responsibility to corporate performance from the perspective of green innovation. Scholars have conducted extensive research on the impact between environmental responsibility, green innovation, and corporate performance, with widely divergent results [60,61]. Porter and Linde proposed that Pareto improvement can be achieved through well-designed environmental regulations, as this approach both protects the environment and increases competitiveness by accelerating innovation and compensating for compliance costs [62]. By fulfilling environmental responsibilities, enterprises promote their green innovation R&D activities and improve the performance of industries or enterprises. According to Jaffe et al., the size of the environmental protection cost of industrial enterprises mainly depends on the cost of industrial enterprises’ green technology innovation investment and environmental pollution control investment cost, and policies and measures themselves can also change the nature and speed of industrial enterprise technological innovation [63]. Through the empirical research on the relationship between the pollutant emissions of manufacturing enterprises and the number of environmental protection technology patents, Albort et al. found that the implementation of environmental protection policies and measures can effectively promote the number of environmental protection patents of manufacturing enterprises. However, there is a negative correlation between the industrial pollutant emissions of manufacturing enterprises and the number of environmental protection patents [64]. Strict environmental regulations and environmental governance measures can motivate enterprises to fulfill their environmental responsibilities, encourage enterprises to invest in green innovation projects, and encourage enterprises to actively introduce new pollution control technologies, thereby improving the efficiency and performance of enterprises [65].

Combing the literature, we can see that enterprises sometimes have to meet the hard requirements from the government to fulfill their environmental responsibilities, such as purchasing pollution emission rights, paying pollution discharge fees, etc. Under the environmental regulation of the government, enterprises are likely to divert the funds planned for R&D investment to buy pollution emission rights, which will have a crowding out effect on the R&D investment of enterprises. However, it also stimulates and motivates businesses to innovate their production processes and products to meet or even exceed the requirements of environmental policy. Through green innovation, it can not only offset the additional compliance costs of enterprises, but also cultivate the competitive advantages of enterprises [62]. Enterprise innovation is not only the basic requirement for enterprises to maintain their competitive advantage in the market, but also an important guarantee for enterprises to improve business performance and enhance profitability [66]. The goal of green innovation is to reduce energy consumption in the production process or in the process of converting waste into valuable goods. In particular, green innovation includes reducing air or water emissions, reducing water consumption, improving resource and energy efficiency, and shifting from fossil fuels to bioenergy [67]. By doing so, those enterprises that take the lead in implementing the green innovation strategy can form a competitive advantage and enhance their profitability. Finally, enterprises will be encouraged to achieve the improvement of enterprise performance through the progress of green innovation technology.

The existence of environmental responsibility means that environmental factors have the same characteristics as other production factors. The demand of enterprises for environmental factors is the same as that of other production factors. Therefore, environmental costs are also included in the production function of enterprises. Enterprises with sustainability as the goal of production and operation can have more competitive advantages in terms of enterprise performance [68] and social legitimacy [22]. George et al. showed that enterprises enter the advanced stage of environmental management development by participating in decision making to achieve corporate sustainability [69]. It is of great significance to study how to motivate enterprises to actively fulfill environmental responsibility and practice green production mode to realize sustainable development of enterprises. Some scholars have studied the priority of enterprises in emerging markets in terms of performance and tested the importance of corporate social responsibility on corporate performance [70]. May et al. studied the relationship between corporate social responsibility, employee green behavior and environmental sustainability, and tested the important role of green behavior on corporate sustainable development [71]. It can be seen from this that when enterprises pay more and more attention to environmental responsibility, it will inevitably lead to an increase in environmental input, thereby promoting green innovation and R&D activities of enterprises. The essence of enterprise green innovation is to solve the contradiction between enterprise production activities and resources and environment, and obtain additional profits through the compensation effect of green innovation, which ultimately stimulates the improvement of enterprise performance. Therefore, based on the above analysis, the following assumptions are put forward:

Hypothesis 2 (H2):

Corporate environmental responsibility through green innovation has a positive incentive effect on corporate performance.

3. Measurement of Corporate Environmental Responsibility

Although the topic of corporate environmental responsibility has been on the rise in recent years, and its importance has been widely recognized by academia and the industry, the empirical research is still relatively weak, especially the quantification of corporate environmental responsibility. As far as the research mechanism of quantifying CER is concerned, the difficulty in studying the relationship between CER and corporate performance lies in the lack of standard measurement of CER. Most of the existing studies use a content analysis method [72] and questionnaire survey method [54,73]. In order to further improve the research mechanism of quantifying CER, this study uses the DEA method to measure corporate environmental responsibility, which is of great significance to fully understand the relationship between CER and corporate performance.

3.1. Samples and Data

As one of the main energy-intensive industries, China’s steel industry has always been characterized by “high energy consumption, high pollution, and high emissions”. Chinese steel enterprises consume a lot of resources and energy in the production process, and their utilization efficiency is still lower than the international advanced level. Many Chinese steel enterprises have had a negative impact on the environment during production and operation [74]. Henriques and Sadorsky argue that the closer enterprises are to natural resources (production-oriented enterprises) in the industrial chain, the more likely they are to adopt positive environmental plans, while the enterprises providing services in the industrial chain (such as sales-oriented enterprises) are much less likely to adopt corporate environmental responsibility strategies [75]. Banerjee et al. believe that industry type can mitigate the impact of regulators, the public, and competitors on corporate environmental practices. The impact of industry on corporate environmental responsibility is beyond the control of enterprises. As different industries have different pollution or emission tendencies, enterprises need to follow the supervision and monitoring procedures of their industries [76]. Especially for some special industries with high environmental sensitivity such as iron and steel, petroleum, printing, and dyeing, the emission level of enterprises must meet industry standards. Therefore, this study selects the steel industry as the research sample. Based on the statistical data of the China Iron and Steel Industry Association, this study collects and constructs an environmental panel data set of 60 large enterprises in China’s iron and steel industry from 2009 to 2017. On the basis of summarizing, comparing, and evaluating the measurement methods of corporate environmental responsibility, the data envelopment analysis (DEA) method is selected to calculate and analyze the environmental responsibility of Chinese iron and steel enterprises.

This study selects the iron and steel industry as the research object, which can explain why some companies in the same industry with similar technology and business structure are facing the same external pressure, and some companies take more advanced environmental management measures, while some companies do not. So, in the same industry, this determines whether the environmental protection work is more successful than that of the competitors in the market. Therefore, this paper deeply discusses the impact of corporate environmental responsibility on corporate performance, which is conducive to the rational decision making of corporate environmental responsibility, improving the ability to perform environmental responsibility, and promoting enterprises to actively perform environmental responsibility.

3.2. Data Envelopment Analysis

In 1978, Chames et al. first proposed the data envelopment analysis (DEA) CCR evaluation model [77]. Since the CCR model was proposed, in the past 40 years, scholars at home and abroad have continued to innovate the theory and methods of new DEA models (such as BCC, FG, and super-efficiency models) and their application research has become more extensive [78]. With the continuous development of DEA methods, a large number of new models and methods have emerged to adapt to solving different problems, and some have expanded into new cross-research fields. The DEA method has been rapidly developed in both theoretical modeling and practical operation, and many research results have been achieved. The DEA method has been widely used in various fields of economics and management, including energy economics and environmental management.

Only input and expected output are considered in the analysis framework of a traditional DEA model. When it comes to environmental efficiency, greenhouse gas emissions, waste water, bad output solid waste, and other pollution, the traditional DEA model that only considers the expected output is no longer applicable. In order to overcome the limitations of the original data envelopment analysis method, some scholars proposed a data envelopment analysis method containing unexpected output [79]. The efficiency value obtained by the standard DEA model is at most 1, and the effective decision-making unit (DMU) efficiency value is the same, and the efficiency of these effective DMUs cannot be further distinguished. To solve this problem, Andersen and Petersen proposed a method to further distinguish the effective degree of effective DMU, this method is called “super-efficiency” model. For the needs of further research in this paper, we combine the SBM model with undesired output and the “super-efficiency” model to form an SBM super-efficiency model with undesired output. The planning formula of the model is as follows:

$$\min \mathrm{\Psi }=\frac{1+\frac{1}{m}{\displaystyle \sum _{i=1}^m{E}_i^{-}/x_{ik}}}{1-\frac{1}{o_1+o_2}({\displaystyle \sum _{r=1}^{o_1}{E}_r^{+}/y_{rk}+}{\displaystyle \sum _{t=1}^{o_2}{E}_t^{b-}/b_{tk}})}$$

(1)

$$\mathrm{S}.\mathrm{t}.{\displaystyle \sum _{j=1,j\ne k}^u{x}_{ij}{\ell }_j-E_i^{-}\le x_{ik}}$$

(2)

$${\displaystyle \sum _{j=1,j\ne k}^u{y}_{ij}{\ell }_j-E_r^{+}\ge y_{rk}}$$

(3)

$${\displaystyle \sum _{j=1,j\ne k}^u{b}_{tj}{\ell }_j-E_t^{b-}\le b_{tk}}$$

(4)

$$1-\frac{1}{o_1+o_2}({\displaystyle \sum _{r=1}^{o_1}{E}_r^{+}/y_{rk}+{\displaystyle \sum _{t=1}^{o_2}{E}_t^{b^{-}}/b_{tk}}})>0$$

(5)

$${\ell }_j,E_i^{-},E_r^{+}\ge 0$$

(6)

$$i=1,2,\cdots ,m;r=1,2,\cdots ,o;j=1,2,\cdots ,u(j\ne k).$$

(7)

In the above model, it is assumed that there are $u$ decision-making units. Assuming that there are $m$ types of inputs and o types of outputs, including o₁ expected outputs and o₂ undesired outputs, the input vector is $x\in R^m$, the expected output vector is $y\in R^{o_1}$, and the undesired output vector is $b\in R^{o_2}$, where $E$ represents the slack of input and output, $E^{-}$ represents the input redundancy, $E^{+}$ represents the expected output shortage, $E^{b-}$ represents the undesired output excess, $\ell$ is the weight vector, and $\mathrm{\Psi }$ represents the efficiency score.

3.3. Description of Input and Output Variables

According to the existing research [80] and through careful analysis of the actual environmental management profiles of the enterprises included in the sample, the input and output variables were determined, as shown in

Table 1. Descriptive statistics of input and output variables for iron and steel enterprises (2009–2017).

Variable	Units	Mean	Std. Dev.	Min	Max
New water consumption	Ten thousand m3	2765.50	2231.18	31.82	11,495.04
Fixed assets	Billion yuan	190.77	219.20	3.10	1177.92
Number of employees	Thousand people	18.51	22.31	1.28	140.00
Energy consumption	Ten thousand tons	425.46	351.86	21.37	2062.20
Waste residue	Ten thousand tons	412.32	458.37	1.64	2682.52
Waste gas	Hundred million m3	1391.18	1477.41	0.02	7976.02
Waste water	Million m3	458.65	582.37	0.55	3760.80
Sewage charges	Ten thousand yuan	2211.86	2574.47	10.52	14,690.21
Output value of the three wastes	Ten thousand yuan	57,198.08	8589.25	261.7	59,5652

. Among them, new water consumption, fixed assets, number of employees, and energy consumption are input variables, output values of the three wastes are expected output variables, and waste residue, waste gas, waste water, and sewage charges are undesired output variables. The basis for the selection of indicators is that assets and labor are traditional input variables for research efficiency evaluation. On this basis, this paper focuses on the environmental responsibility of iron and steel enterprises, so new water consumption and energy consumption variables are added to make the input indicators more comprehensive. The selection of sewage charges as an output indicator is based on the belief of Pigou, a pioneer of welfare economics, that through taxation and subsidies, the cost of environmental pollution can be internalized into enterprises [81]. According to this principle, governments around the world generally adopt the method of charging polluters to restrain enterprises’ polluting behavior. Due to their large volume and large total amount of pollutant discharge, iron and steel enterprises are the key targets for pollutant discharge verification and pollutant discharge fee collection. Waste residue, waste gas, and waste water are the main pollutants discharged by enterprises. The expected output variable selects the output value of the three wastes, which indicates the degree of utilization of pollutants by the enterprise, and fully reflects the degree of importance that the enterprise attaches to environmental management.

3.4. Measurement Results of Corporate Environmental Responsibility

Corporate environmental responsibility reflects the degree of impact of corporate management decisions and production behaviors on the natural environment. This paper calculates the environmental input and output data of iron and steel enterprises through the SBM super-efficiency model including undesired outputs, and provides objective and effective data for the following examination of the relationship between corporate environmental responsibility and corporate performance. Due to space limitations, Figure 1 only shows the calculation results in 2009. Among them, the output variables in CER1 include the expected output variable output value of the three wastes and the undesired output variables three wastes (waste residue, waste water, and waste gas) and sewage charges; CER2 as a control group only includes the expected output variable output value of the three wastes.

At present, China’s iron and steel industry is in a period of strategic transformation, from labor-intensive enterprises with high pollution and high energy consumption to capital intensive enterprises with environmental protection and efficiency. It can be seen from Figure 1 that the environmental responsibility level of China’s steel enterprises varies greatly. The environmental responsibility level of most enterprises is low, and there is much room for progress. In the following sections, this paper will further explore the impact and mechanism of corporate environmental responsibility on corporate performance.

4. Research Design

In China, due to the lack of environmental protection facilities in industrial enterprises, backward technology, lax emission standards, and lack of supporting supervision, industry has become China’s largest source of pollution, and industrial enterprises have a long way to go in environmental protection. As the main bearer of economic development, enterprises are not only responsible for market demand, but also responsible for resource and environmental protection. In order to solve environmental problems, enterprises need to improve their ecological awareness and fulfill their environmental responsibilities. Corporate environmental responsibility plays a vital role in the interaction between enterprises and the natural environment. However, as rational economic people, creating economic benefits is the decision-making goal of almost all senior managers. Whether environmental management can bring economic benefits is one of the most concerning issues for enterprises. Therefore, in order to enable enterprises to actively fulfill their environmental responsibilities, this section links corporate environmental responsibilities with corporate financial goals, discusses the impact of corporate environmental responsibilities on corporate performance, and provides new ideas for improving corporate environmental management.

4.1. Model Building

4.1.1. Basic Regression Model

In order to make an empirical analysis of the above assumptions, the index of corporate environmental responsibility is calculated by using the environmental panel data of 60 large and medium-sized enterprises in China’s iron and steel industry from 2009 to 2017, and the relationship between corporate environmental responsibility and corporate performance is empirically tested on this basis. Based on the previous research assumptions, this paper proposes the following econometric equation model:

$$\begin{array}{lll}IV{A}_{i,t}=& {\beta }_0+{\beta }_{1}CER{1}_{i,}{}_{t-1}+{\beta }_2\ln Scal{e}_{i,t}+{\beta }_3\ln Kl{r}_{i,t}+{\beta }_4\ln T{C}_{i,t}+{\beta }_5\ln MB{I}_{i,t}& \\ & +{\beta }_6\ln Le{v}_{i,t}+{\mu }_{i,t}& ,\end{array}$$

(8)

$$\begin{array}{lll}IV{A}_{i,t}=& {\alpha }_0+{\alpha }_{1}CER{2}_{i,}{}_{t-1}+{\alpha }_2\ln Scal{e}_{i,t}+{\alpha }_3\ln Kl{r}_{i,t}+{\alpha }_4\ln T{C}_{i,t}+{\alpha }_5\ln MB{I}_{i,t}& \\ & +{\alpha }_6\ln Le{v}_{i,t}+{\eta }_{i,t}& .\end{array}$$

(9)

In the above model, $i$ represents the enterprise and $t$ represents the time (2009–2017). ${\beta }_0\sim {\beta }_6$ and ${\alpha }_0\sim {\alpha }_6$ are parameters to be estimated; ${\mu }_{i,t}$ and ${\eta }_{i,t}$ are random disturbance terms. CER stands for corporate environmental responsibility, and adopts the measurement results in the third part of this paper. Among them, CER1 represents the measurement results of undesired output variables including three wastes (waste residue, waste gas, and waste water) and sewage charges. CER2 as the control group only includes the expected output variables (output value of three wastes). Scale, Klr, TC, MBI, and Lev are the set of control variables.

4.1.2. Mediation Model

In order to comprehensively examine the impact of corporate environmental responsibility on corporate performance, this study selects relevant variables and builds a mediating effect model to test the mechanism of environmental responsibility on corporate performance. This study uses the mediation effect test procedure proposed by Sui et al. to build a model to further clarify the mechanism of environmental responsibility on corporate performance [82]. The specific inspection steps are as follows:

$$Y=\rho X+\epsilon ,$$

(10)

$$M=\omega X+\mu ,$$

(11)

$$Y=\delta X+\theta M+\tau .$$

(12)

Among them, $X$ is the explanatory variable, $Y$ is the explained variable, $\epsilon$, $\mu$, $\tau$ are the error term, $M$ is the mediator variable, and the explanatory variable $X$ affects the explained variable $Y$ through the action of $M$. $\rho \times \delta$ is the total and direct effect of $X$ on $Y$, and $\theta \times \omega$ is the effect of $X$ on $Y$ through $M$. The basic steps of the test include: The first step is to judge whether the main effect of $X$ on $Y$ exists according to whether the coefficient $\rho$ is significant, and if it is significant, the second step is to be carried out. The second step is to test whether the effect of $X$ on $M$ is significant. The third step is to test the mediation effect. If the coefficients $\theta$ and $\omega$ are both significant, it indicates that there is a mediation effect. Further, according to whether the coefficient $\delta$ is significant, it indicates whether there is a partial mediation effect or a complete mediation effect. However, if at least one of the coefficients $\theta$ and $\omega$ is not significant, a further Sobel test is required. The mediating effect is measured by $\theta \times \omega$, which is different from the standard normal distribution. The critical value of the Sobel test statistic at the 5% significance level is about 0.97 [83], and the probability distribution is shown in the MacKinnon measurement table [84].

In order to test the mediating effect of green innovation (GI) on the impact of corporate environmental responsibility on corporate economic performance and its transmission mechanism, this study constructs the following mediating effect model:

$$\begin{array}{lll}IV{A}_{i,t}=& {\rho }_0+{\rho }_{1}CER{1}_{i,}{}_{t-1}+{\rho }_2\ln Scal{e}_{i,t}+{\rho }_3\ln Kl{r}_{i,t}+{\rho }_4\ln T{C}_{i,t}+{\rho }_5\ln MB{I}_{i,t}& \\ & +{\rho }_6\ln Le{v}_{i,t}+{\epsilon }_{i,t}& ,\end{array}$$

(13)

$$\begin{array}{lll}\ln G{I}_{i,t}=& {\omega }_0+{\omega }_{1}CER{1}_{i,}{}_{t-1}+{\omega }_2\ln Scal{e}_{i,t}+{\omega }_3\ln Kl{r}_{i,t}+{\omega }_4\ln T{C}_{i,t}+{\omega }_5\ln MB{I}_{i,t}& \\ & +{\omega }_{6}Le{v}_{i,t}+{\varphi }_{i,t}& ,\end{array}$$

(14)

$$\begin{array}{lll}IV{A}_{i,t}=& {\delta }_0+\theta \ln G{I}_{i,t}+{\delta }_{1}CER{1}_{i,}{}_{t-1}+{\delta }_2\ln Scal{e}_{i,t}+{\delta }_3\ln Kl{r}_{i,t}+{\delta }_4\ln T{C}_{i,t}& \\ & +{\delta }_5\ln MB{I}_{i,t}+{\delta }_6\ln Le{v}_{i,t}+{\tau }_{i,t}& .\end{array}$$

(15)

Among them, $i$ and $t$ represent the $i-th$ iron and steel enterprise and the $t-th$ year, respectively, and ${\epsilon }_{i,t}$, ${\varphi }_{i,t}$, ${\tau }_{i,t}$ are random disturbance terms. The above model (13) constructs the direct impact of environmental responsibility on the performance of iron and steel enterprises. Then, the intermediary variable “green innovation” is added to explore how corporate environmental responsibility has an indirect impact on enterprise performance through green innovation, so as to construct models (14) and (15).

4.2. Variable Description

Dependent variable: Industrial value added (IVA) refers to the outcome of industrial production activities expressed in currency during the reporting period; it is the total outcome of all industrial enterprises’ production activities minus the material products consumed or transferred production process. Industrial value added is the new added value in the production process of industrial enterprises. Therefore, the selection of industrial value added as the dependent variable is completely in line with the purpose of this study.

Independent variable: Corporate environmental responsibility (CER). In this paper, the SBM super-efficiency model including undesired output is used to evaluate the status of the environmental input and output of iron and steel enterprises, and the evaluation results are expressed as CER. Since the impact of corporate environmental behavior on corporate performance often has a lag effect, we will conduct an empirical test based on the first lag period of corporate environmental responsibility.

Mediating variable: Green innovation (GI) mainly refers to the investment made by iron and steel enterprises for environmental protection and pollution control. Since the investment in environmental protection can reflect the investment level of enterprises’ pollution control technology, combined with the availability of data, the green innovation of this paper is measured by the investment in environmental protection of iron and steel enterprises.

Control variable: Enterprise scale (Scale) is measured by the natural logarithm of total assets at the end of the year. The factor endowment structure (Klr) is expressed by the ratio of the firm’s net fixed assets to the firm’s annual average number of employees. The higher the factor endowment structure of an enterprise, the more capital-intensive the enterprise tends to be. Total operating cost (TC) refers to the total cost of goods sold or services provided by an enterprise. This variable is added to control the impact of total investment on corporate performance. Main business income (MBI) refers to the operating income obtained by an enterprise engaged in the production and operation activities of the industry. The asset–liability ratio (Leverage) is used to measure the corporate financial leverage, considering the impact of corporate financial leverage on the company.

Table 2. Descriptive statistics of variables.

Variable	Units	Symbol	Mean	Std. Dev.	Min	Max
Industrial value added	Billion yuan	IVA	4.97	23.85	−4.36	33.41
Corporate environmental responsibility 1	Efficiency value	CER1	0.534	0.314	0.006	1.250
Corporate environmental responsibility 2	Efficiency value	CER2	0.388	0.614	0.001	1.572
Green innovation	Million yuan	lnGI	5.232	5.783	3.219	5.594
Scale	Ten thousand yuan	lnScale	15.080	0.948	11.956	17.006
Factor endowment structure	Percentage	lnKlr	2.398	2.092	−0.892	3.903
Total operating cost	Ten thousand yuan	lnTC	14.926	0.849	12.788	17.009
Main business income	Ten thousand yuan	lnMBI	14.853	0.870	12.549	17.022
Asset–liability ratio	Percentage	lnLev	4.220	2.607	3.472	4.793

is the descriptive statistical analysis of the variables.

5. Empirical Analysis

5.1. Benchmark Regression Analysis

Based on the panel data used in this study, the fixed-effects model was finally determined as the optimal model by a Hausman test. Based on the previous model construction, this section describes the relationship between corporate environmental responsibility and corporate performance. The results are shown in

Table 3. Benchmark regression test results.

Variable	Model I	Model II	Model III	Model IV
	IVA	IVA	IVA	IVA
CER1t−1	13.148 **		12.412 **
	(0.98)		(1.18)
CER2t−1		9.092 **		8.532 **
		(0.69)		(1.29)
lnScale			3.114 *	3.089 *
			(1.73)	(1.74)
lnTC			−2.528 ***	−2.255 ***
			(−3.45)	(−3.26)
lnMBI			5.796 ***	5.963 ***
			(4.55)	(4.39)
lnKlr			0.342 *	0.240*
			(1.85)	(1.74)
lnLev			−1.755 ***	−1.935 ***
			(−4.87)	(−4.32)
Constant	18.328 **	19.165 **	15.734 **	18.453 **
	(2.14)	(2.05)	(2.04)	(2.11)
N	480	480	480	480
R2	0.056	0.050	0.260	0.205

Notes: t statistics in parentheses. ***, **, and * denote the statistical significance at the 0.01, 0.05, and 0.10 levels, respectively.

.

In model III and model IV in Table 3, the test results of the impact of corporate environmental responsibility on corporate performance are significantly positive, indicating that the environmental responsibility of Chinese iron and steel enterprises at the current stage has a significant role in promoting corporate performance. Model I and model II do not add control variables, which is convenient to check whether the regression results are robust.

Specifically, in model III in Table 3, the impact coefficient of corporate environmental responsibility (CER1_t−1) on industrial value added (IVA) is 12.412, which is significant at the level of 5%. It shows that there is a significant positive correlation between corporate environmental responsibility (CER1_t−1) and industrial added value, which includes undesired output variables. The theoretical hypothesis H1 is verified: Chinese iron and steel enterprises’ fulfillment of environmental responsibility has a positive impact on corporate performance. In model IV, CER2_t−1 as a control group only included expected output variables and did not include undesired output variables. We compare and analyze the results of model I and model IV, and find that corporate environmental responsibility considering environmental undesired output variables has a greater impact on corporate performance. This suggests that in the process of environmental management, enterprise managers should not only focus on the expected environmental output, but should also consider the environmental undesired output, so as to promote the enterprise to achieve better economic performance.

At present, the overall level of Chinese iron and steel enterprises’ fulfillment of environmental responsibilities is still relatively low. Therefore, with the continuous improvement of corporate environmental responsibility, the contribution of environmental responsibility to corporate performance has gradually increased. This may be reflected in the increasingly serious current environmental problems in China. Whether it is the government’s incentives and penalties for enterprises to protect the environment, or the public’s expectations and requirements for enterprises to protect the environment, all of them urge enterprises to actively perform their environmental responsibilities and improve the image of enterprises to bear environmental responsibilities, so as to reduce the operating costs and risks of enterprises, improve the legitimacy and reputation of enterprises, create competitive advantages, and promote the improvement of corporate performance. At present, China’s iron and steel industry is in a period of strategic transformation, changing from a labor-intensive enterprise with high pollution and high energy consumption to an environmentally friendly and efficient capital-intensive enterprise. It shows that the impact of environmental responsibility of most Chinese iron and steel enterprises on corporate performance is far from optimal. Therefore, Chinese iron and steel enterprises should take the initiative to undertake environmental responsibility to maximize environmental and economic benefits.

The regression results of control variables show that there is a significant positive correlation between enterprise size, main business income, factor endowment structure, and industrial value added. It shows that enterprise size, main business income, and factor endowment structure can significantly promote corporate performance. The regression results show that there is a significant negative correlation between the total cost of enterprises, asset–liability ratio, and industrial value added. It shows that the total cost and asset–liability ratio of enterprises have an inhibitory effect on corporate performance.

The above analysis shows that corporate environmental responsibility has a significant positive impact on corporate economic performance, and it also shows that corporate environmental responsibility has a lagging effect. This means that environmental management is a long-term investment process, and enterprise managers and decision makers need to have a strategic vision and formulate long-term environmental management plans.

5.2. Robustness Test

In order to test the robustness of the above regression results, this section describes the dynamic system GMM model and the replacement variable test method for a robustness test.

5.2.1. Dynamic System GMM Test

Considering the possible endogenous problems in the model variables, using a GMM dynamic panel model for a robustness test can solve the endogenous problems caused by sample selective deviation and missing variables. This paper refers to the method of Cai et al. for a dynamic panel system GMM test [85]. The results are shown in

Table 4. Dynamic system GMM test results.

Variable	Model I	Model II
	IVA	IVA
CER1t−1	21.852 ***
	(3.11)
CER2t−1		14.122 *
		(1.82)
IVAt−1	0.151 **	0.094 **
	(2.47)	(2.21)
lnScale	2.486 ***	1.269 *
	(3.23)	(1.71)
lnTC	−2.347 **	−2.813 **
	(−2.54)	(−2.63)
lnMBI	3.425 ***	3.964 ***
	(2.88)	(3.01)
lnKlr	0.067	0.069
	(1.25)	(1.43)
lnLev	−2.614 ***	−2.718 ***
	(−3.49)	(−3.08)
Constant	−41.563 ***	−32.486 *
	(−2.92)	(−1.91)
N	480	480
AR(1) test (p-value)	0.013	0.011
AR(2) test (p-value)	0.203	0.219
Hansen test (p-value)	0.135	0.237

Notes: t statistics in parentheses. ***, **, and * denote the statistical significance at the 0.01, 0.05, and 0.10 levels, respectively.

.

Based on the estimation results of the GMM dynamic panel model, the p-values of the AR(2) test and the Hansen test with over-identification limit all exceed the levels of 1%, 5%, and 10%, and the null hypothesis that there is no second-order serial correlation cannot be rejected and the null hypothesis is that the tool is valid. This means that the positive relationship between corporate environmental responsibility and industrial value added is not driven by simultaneity bias. This provides strong support for hypothesis H1.

5.2.2. Replacement Variable Test

In order to verify the robustness of the basic regression results, this section describes the replacement of explained variables to conduct robustness tests. In previous studies, there are many indicators to measure corporate performance, so in this section of the robustness test, return on equity (ROE) and net profit ratio (NPR) are selected for verification.

Drawing on the research of Demsetz [86] and Stuart et al. [87], we select the return on equity index to measure corporate performance. This section first uses ROE to test the robustness of the regression results. Model I and model II in

Table 5. Replacement variable test results.

Variable	Model I	Model II	Model III	Model IV
	ROE	ROE	NPR	NPR
CER1t−1	33.023 ***		42.354 ***
	(3.28)		(4.27)
CER2t−1		21.388 ***		8.951 ***
		(3.42)		(3.86)
lnScale	−3.486	−3.797	2.825	2.751
	(−1.62)	(−1.60)	(1.54)	(1.58)
lnTC	−8.863 ***	−7.274 ***	−7.571 ***	−7.948 ***
	(−3.86)	(−3.72)	(−3.48)	(−3.95)
lnMBI	6.529 ***	7.571 ***	11.216 ***	12.589 ***
	(3.23)	(3.08)	(4.17)	(4.46)
lnKlr	−0.576	−0.330	−2.622 ***	−2.491 ***
	(−0.98)	(−1.34)	(−3.25)	(−3.19)
lnLev	−3.345 ***	−3.465 ***	−1.590 **	−1.635 **
	(−3.28)	(−3.35)	(−2.26)	(−2.15)
Constant	45.325 ***	47.207 ***	−33.115 ***	−35.901 ***
	(3.61)	(3.56)	(−3.73)	(−3.12)
N	480	480	480	480
R2	0.223	0.228	0.274	0.281

Notes: t statistics in parentheses. ***, **, and * denote the statistical significance at the 0.01, 0.05, and 0.10 levels, respectively.

report the detailed test results of replacing the explanatory variable with the return on net assets (ROE). The results show that the influence coefficient between the first-order lag term of corporate environmental responsibility and the return on net assets is positive and significant, which confirms that the performance of Chinese iron and steel enterprises in fulfilling environmental responsibility has a positive impact on corporate performance. The robustness of the results was supported.

Next, this section draws on Horváthová’s research [88] and selects the net profit margin (NPR) indicator to measure corporate performance. The results are shown in model III and model IV in Table 5. The results show that the first-order lag term of corporate environmental responsibility has a positive and significant influence coefficient on the net profit margin, which confirms that the impact of Chinese iron and steel enterprises’ fulfillment of environmental responsibility on corporate performance is presented. The positive correlation is further supported by the robustness of the results.

5.3. Influence Mechanism Test

The previous part analyzes the direct impact of China’s large and medium-sized steel enterprises’ fulfillment of environmental responsibilities on corporate performance. Based on the theoretical analysis of corporate environmental responsibility on the transmission mechanism of corporate performance, this part discusses the mechanism of corporate environmental responsibility in corporate performance through green innovation. From a quantitative perspective, it analyzes the direction and extent of the impact of green innovation on corporate performance, and provides empirical support for improving the green development of the steel industry.

Table 6. Test results of the mediation effect of green innovation mechanism.

Variable	Model I	Model II	Model III	Model IV	Model Ⅴ	Model Ⅵ
	lnGI	lnGI	IVA	lnGI	lnGI	IVA
lnGI			0.375 **			0.302 *
			(2.41)			(1.93)
CER1t−1	0.821	0.287 **	15.743 ***	0.591	0.143 *	13.457 ***
	(0.97)	(1.98)	(3.26)	(0.83)	(1.85)	(2.83)
(CER1t−1)2	−0.378			−0.309
	(−0.78)			(−0.56)
lnScale				0.207	0.218	2.312
				(0.45)	(0.46)	(0.77)
lnTC				0.267	0.241	−4.375 ***
				(0.87)	(0.72)	(−4.73)
lnMBI				−0.196	−0.173	3.743 ***
				(−0.88)	(−0.67)	(5.74)
lnKlr				0.030	0.031	−0.354 **
				(0.53)	(0.67)	(−2.56)
lnLev				−0.345 ***	−0.345 ***	−1.714 ***
				(−2.79)	(−2.81)	(−7.16)
Constant	9.256 ***	9.872 ***	−10.382 ***	6.365 *	6.021 *	4.845
	(16.25)	(18.31)	(−6.22)	(1.89)	(1.96)	(1.57)
N	480	480	480	480	480	480
R2	0.012	0.009	0.243	0.023	0.021	0.301
Sobel Test	-	-	-	-	-	-
Mediating Effect Test	-	-	-	Significant

Notes: t statistics in parentheses. ***, **, and * denote the statistical significance at the 0.01, 0.05, and 0.10 levels, respectively.

shows the estimated results of the mediation effect of corporate environmental responsibility on corporate performance through green innovation. The estimation result of Equation (13) has been described in detail in the Section 4, and will not be listed in this section. In Table 6, model II and model Ⅴ are the estimation results using Equation (14); model III and model Ⅵ are the estimation results using Equation (15). Models I–III do not add control variables, which is convenient to check whether the regression results are robust. The empirical results are shown in Table 6 below.

This section follows the test process of the mediation effect and the test results in Table 6 to judge whether green innovation has a mediation effect. Models I and IV are to further test whether there is a non-linear impact of corporate environmental responsibility on green innovation. Based on models II and Ⅴ, the square term of corporate environmental responsibility (CER1_t−1)² is added. After testing, the regression results are not significant, indicating that there is no significant non-linear effect of environmental responsibility on green innovation in China’s large and medium-sized iron and steel enterprises at this stage. It can be seen from Table 6 that the coefficients of the key variables of models II, III, Ⅴ, and Ⅵ are all significantly positive whether the control variables are added or not, indicating that the regression results are robust.

According to the regression results of the benchmark model in Table 3, the influence coefficient of corporate environmental responsibility (CER_t−1) on industrial value added (IVA) is 12.412, which is significant at the 5% level, indicating that the direct effect of corporate environmental responsibility on performance is significant. Therefore, according to the mediation effect theory, Equations (14) and (15) are further tested. It can be seen from model Ⅴ in Table 6 that the coefficient ω estimated by Equation (14) is significantly positive at the 10% level, which indicates that corporate environmental responsibility can significantly promote corporate green innovation. From model Ⅵ, it can be found that the estimated coefficient δ using Equation (15) is significant at the 1% level, and the coefficient θ is significant at the 10% level. Overall, the mediation effect model coefficients ρ, δ, θ, and ω are all significant, indicating that the mediating effect of corporate environmental responsibility on corporate performance through green innovation is significant. This result shows that hypothesis H2 is verified, that is, corporate environmental responsibility has a positive incentive effect on corporate performance through green innovation.

This shows that corporate environmental responsibility can effectively promote iron and steel enterprises to invest in green innovation in energy conservation and emission reduction, pollution control, and other aspects, so as to reduce the cost of pollution control and emission reduction. Moreover, innovation can not only offset the compliance cost of enterprises, but also cultivate the competitive advantage of enterprises, and finally promote the performance improvement of iron and steel enterprises.

According to the analysis of the influence mechanism above, the mediating effect of the impact of corporate environmental responsibility on corporate performance may vary greatly between regions and between different forms of ownership. Therefore, from the perspective of regional heterogeneity and ownership heterogeneity, we will further analyze whether green innovation as an intermediary variable has an intermediary effect.

5.4. Heterogeneity Test

Other factors, such as the level of economic development in China, the legal system, and the degree of law enforcement, can also affect corporate environmental responsibility. Since their impact on corporate environmental practices varies with the geographic location and nature of the business, these two factors are important for corporate environmental responsibility. The impact needs to be analyzed on a case-by-case basis [29]. From the perspective of regional heterogeneity and ownership heterogeneity, this part further explores whether there are differences in the impact of corporate environmental responsibility on corporate performance through green innovation as an intermediary.

5.4.1. Regional Heterogeneity

There are large differences in the level of economic development and regional policies between eastern and central–western China, prompting us to conduct a more in-depth study of the mediating effect of corporate environmental responsibility on corporate performance through green innovation. Therefore, this part tests the mediating effect of green innovation in different regions in the eastern and central–western regions, and conducts a comparative analysis.

Table 7. Test results of regional heterogeneity.

	Eastern			Central–Western
Variable	Model I	Model II	Model III	Model IV	Model Ⅴ	Model Ⅵ
	IVA	lnGI	IVA	IVA	lnGI	IVA
lnGI			0.186 *			0.217 *
			(1.95)			(1.87)
CER1t−1	9.897 ***	0.578 *	10.564 ***	16.754 ***	0.423 *	17.582 ***
	(2.96)	(1.85)	(2.78)	(3.48)	(1.74)	(3.22)
lnScale	−0.385	−0.041	−0.289	0.167	0.039	0.153
	(−0.56)	(−0.18)	(−0.47)	(0.22)	(0.12)	(0.17)
lnTC	−2.642 ***	0.846	−2.251 ***	−8.638 ***	−0.527	−8.534 ***
	(−2.92)	(1.37)	(−2.87)	(−5.71)	(−0.33)	(−5.69)
lnMBI	2.782 ***	−0.457	2.584 ***	7.421 ***	0.389	6.685 ***
	(2.86)	(−0.82)	(2.91)	(4.38)	(0.54)	(4.94)
lnKlr	−0.060	0.240 **	−0.078	−0.540 ***	−0.114	−0.528 ***
	(−0.68)	(2.31)	(−0.84)	(−3.06)	(−1.38)	(−2.96)
lnLev	−2.145 ***	−0.150	−2.130 ***	−1.140 ***	−0.360 *	−1.095 ***
	(−4.85)	(−1.34)	(−4.37)	(−3.48)	(−1.89)	(−3.08)
Constant	6.377	7.369	5.785	14.259	10.745 *	13.853
	(0.56)	(1.58)	(0.78)	(1.54)	(1.79)	(1.31)
N	288	288	288	192	192	192
R2	0.231	0.042	0.305	0.375	0.073	0.387
Sobel Test	-	-	-	-	-	-
Mediating Effect Test	Significant			Significant

Notes: t statistics in parentheses. ***, **, and * denote the statistical significance at the 0.01, 0.05, and 0.10 levels, respectively.

shows the group regression results of the mediation model of green innovation according to regional heterogeneity.

According to the regression results of model I in Table 7, the estimated coefficient of corporate environmental responsibility in the eastern region (CER_t−1) to industrial value added (IVA) is significant at the 1% level. It shows that the direct effect of environmental responsibility of iron and steel enterprises in the eastern region on corporate performance is significant. The estimated coefficient of corporate environmental responsibility in model II is significantly positive at the level of 10%, which indicates that the performance of environmental responsibility by iron and steel enterprises in the eastern region significantly promotes the improvement of enterprise innovation level. From model III, we can find that the estimation coefficient of corporate environmental responsibility is significant at the level of 1%, and the estimation coefficient of green innovation is significant at the level of 10%, indicating that the intermediary effect of green innovation on corporate performance in the eastern region is significant. Typically, in regions with higher levels of economic development, enterprises commit to more environmental practices, resulting in better environmental performance. In China, the efficiency of the legal system and law enforcement varies in different regions. Du et al. found that in regions with a more effective legal system and better law enforcement mechanism, enterprises are more proactive in pursuing social responsibility or environmental responsibility [89].

The empirical results show that enterprises in the eastern region can effectively promote the green innovation of iron and steel enterprises by actively fulfilling their environmental responsibilities, thereby promoting the green innovation research and development activities of enterprises, and the investment in green technology research and development will also increase. At the same time, it can reduce government environmental supervision problems, reduce compliance costs, and ultimately have a positive effect on corporate performance. It shows that the environmental responsibility of enterprises in the eastern region has a positive incentive effect on the performance of iron and steel enterprises through green innovation.

In the central and western groups, according to the regression results of model IV in Table 7, the estimated coefficient of corporate environmental responsibility (CER_t−1) in the central and western regions to the industrial value added (IVA) is significant at the level of 1%, indicating that the direct effect of environmental responsibility of iron and steel enterprises in the central and western regions on corporate performance is significant. The estimated coefficient of corporate environmental responsibility in model Ⅴ is significantly positive at the 10% level, which indicates that corporate environmental responsibility in the central and western regions significantly promotes green innovation. From model Ⅵ, it can be found that the estimated coefficient of corporate environmental responsibility is significant at the 1% level, and the estimated coefficient of green innovation is significant at the 1% level, indicating that the mediating effect of green innovation on corporate performance is significant. It shows that corporate environmental responsibility in the central and western regions can affect corporate performance through green innovation to a certain extent. This shows that enterprises in the central and western regions can effectively improve the green innovation of iron and steel enterprises by actively fulfilling their environmental responsibilities, which will have a positive effect on corporate performance. This result shows that corporate environmental responsibility in the central and western regions has a positive incentive effect on corporate performance through green innovation.

In addition, by comparing model III and model Ⅵ in Table 7, the regression coefficients of green innovation on corporate performance are 0.186 and 0.217, respectively. The results show that green innovation has a greater impact on corporate performance in the central and western regions than in the eastern region. This shows that compared with the eastern region, green innovation in the central and western regions is still in a lower position at this stage, so it inspires managers of steel enterprises in the central and western regions to increase investment in environmental protection and promote the improvement of corporate performance.

5.4.2. Ownership Heterogeneity

There are many forms of ownership in China’s iron and steel enterprises. According to the research samples, they can be roughly divided into two categories: State-owned enterprises and private enterprises. In China, after the state-owned enterprises obtain income from production and operation, they should use part of the income for some social functions, while private enterprises rarely have this problem. Based on the different forms of corporate ownership, is there any difference in the mediating effect of corporate environmental responsibility on corporate performance through green innovation?

Table 8. Test results of ownership heterogeneity.

	State-Owned			Private
Variable	Model I	Model II	Model III	Model IV	Model V	Model VI
	IVA	lnGI	IVA	IVA	lnGI	IVA
lnGI			0.172 *			−0.185
			(1.72)			(−1.24)
CERt−1	18.957 ***	0.759 *	18.271 ***	3.385 *	−1.108 *	3.547 *
	(5.41)	(1.81)	(5.33)	(1.75)	(−1.69)	(1.88)
lnScale	1.314*	0.841	1.458 *	−3.517 ***	−1.241	−3.593 ***
	(1.91)	(1.03)	(1.84)	(−3.76)	(−1.60)	(−3.85)
lnTC	−7.389 ***	−1.426	−7.024 ***	−1.083 *	0.458	−1.396
	(−4.37)	(−1.51)	(−4.54)	(−1.76)	(1.25)	(−1.37)
lnMBI	6.586 ***	0.852	6.457 ***	2.054	0.708	2.675
	(3.96)	(1.33)	(4.27)	(1.38)	(1.08)	(1.41)
lnKlr	−0.378 ***	0.060	−0.378 ***	−0.438	0.612 **	−0.330
	(−2.85)	(0.16)	(−2.88)	(−0.77)	(2.46)	(−1.08)
lnLev	−1.785 ***	−0.330 **	−1.725 ***	−0.795	0.015	−0.795
	(−4.86)	(−2.42)	(−4.92)	(−1.41)	(0.27)	(−1.35)
Constant	1.586	6.385 **	2.385	40.265 ***	4.701	42.713 ***
	(0.15)	(2.31)	(1.08)	(3.58)	(0.33)	(4.28)
N	352	352	352	128	128	128
R2	0.304	0.035	0.312	0.338	0.108	0.356
Sobel Test	-	-	-	Z = 0.72, |Z| < 0.97
Mediating Effect Test	Significant			Not significant

Notes: t statistics in parentheses. ***, **, and * denote the statistical significance at the 0.01, 0.05, and 0.10 levels, respectively.

shows the group regression results of the mediation model of green innovation according to the heterogeneity of enterprise ownership. According to the regression results of model I in Table 8, the estimated coefficient of state-owned enterprise environmental responsibility (CER_t−1) on industrial value added (IVA) is significant at the level of 1%, indicating that the direct effect of state-owned iron and steel enterprise environmental responsibility on enterprise performance is significant. The estimated coefficient of corporate environmental responsibility in model II is significantly positive at the level of 10%, which shows that the environmental responsibility of state-owned enterprises is conducive to promoting green innovation. From model III, it can be found that the estimation coefficient of corporate environmental responsibility is significant at the level of 1%, and the estimation coefficient of green innovation is significant at the level of 1%, indicating that the intermediary effect of green innovation of state-owned enterprises on enterprise performance is significant.

In the private group, according to the regression results of model IV in Table 8, the estimation coefficient of private enterprise environmental responsibility (CER_t−1) on industrial value added (IVA) is significant at the level of 10%, indicating that the direct effect of private steel enterprise environmental responsibility on enterprise performance is significant. The estimated coefficient of corporate environmental responsibility in model Ⅴ is significant at the 10% level, and the estimated coefficient of corporate environmental responsibility in model Ⅵ is significant at the 10% level, but the estimated coefficient of green innovation is not significant. Therefore, the Sobel test needs to be further performed. The Z statistic of the Sobel test is 0.72, which is less than 0.97 at the 5% significance level of the MacKinnon critical value table, indicating that the mediating effect of green innovation of private enterprises on corporate performance is not significant. It shows that the impact of environmental responsibility of private enterprises on the performance of iron and steel enterprises does not effectively play a role through the intermediary variable of green innovation.

Compared with private enterprises, state-owned enterprises are more strictly regulated by the government. Actively fulfilling environmental responsibilities by state-owned enterprises can effectively promote the green innovation of iron and steel enterprises, and ultimately promote the performance of enterprises. It shows that the environmental responsibility of state-owned enterprises has a positive incentive effect on the performance of iron and steel enterprises through green innovation.

6. Discussion

The purpose of this paper is to explore the effect and mechanism of environmental responsibility of Chinese iron and steel enterprises on corporate performance. The main research conclusions are as follows:

First, on the basis of sorting out the related research on corporate environmental responsibility, combining the resource-based view and institutional theory, we defined the concept and connotation of corporate environmental responsibility. Moreover, the theoretical model of the influence of corporate environmental responsibility on corporate performance is constructed, which provides a theoretical basis for explaining the relationship between them. The conclusion has been supplemented with relevant expressions to better link theory with practice. Based on the environmental panel data of large and medium-sized steel enterprises in China from 2009 to 2017, this paper empirically explores the positive correlation between corporate environmental responsibility and corporate performance, supporting hypothesis H1. At the same time, the empirical analysis results show that the impact of corporate environmental responsibility on corporate performance has a lag effect. This means that environmental management is a long-term investment process. Enterprises should weigh environmental benefits and economic benefits at the same time, and establish long-term environmental strategies and plans [29]. In the context of the emerging economy, Chinese enterprises face various constraints in environmental management. Although environmental regulation and related laws have increased in recent years, Chinese companies are still in the early stages of environmental protection compared to developed Western countries [44]. Top executives of Chinese enterprises have not shown a positive attitude towards environmental issues. In addition, among the stakeholders, there are conflicting expectations for the environmental management and sustainability of the enterprise [90]. They not only agree that the sustainable development of enterprises requires the investment of resources for environmental protection, but also worry that the investment of environmental protection resources will affect the economic benefits of enterprises. Thinking from another angle, various behaviors of enterprises are under the supervision of the government and other stakeholders. Instead of passively accepting legal constraints and public supervision, it is better to take the initiative to undertake and disclose the environmental responsibilities that enterprises should bear [21]. The empirical results of this paper make enterprises realize that fulfilling environmental responsibilities will not reduce corporate performance, but will help their economic returns, and encourage corporate managers to actively fulfill environmental responsibilities. This is the significance of this research.

Second, the corporate environmental responsibility directly impacts on the business performance based on the analysis of the mechanism and selection of “green innovation” as the intermediary variable, and building of the mediation effect of corporate environmental responsibility affects the enterprise performance model, from the perspective of quantitative analysis of green innovation direction and degree of impact on the economic performance of enterprises, empirically, the influence mechanism between corporate environmental responsibility and enterprise performance. Further, this paper discusses the regional heterogeneity and ownership heterogeneity of the impact of corporate environmental responsibility on corporate performance through green innovation. The results show that corporate environmental responsibility has a significant mediating effect on corporate performance through green innovation, which confirms hypothesis H2. From the perspective of regional heterogeneity, corporate environmental responsibility in the eastern and central and western regions has a positive incentive effect on corporate performance through green innovation. Moreover, compared with the central and western regions, the green innovation of iron and steel enterprises in the eastern region has a greater impact on corporate performance. In addition, the ownership heterogeneity test shows that compared with private enterprises, state-owned enterprises are more strictly regulated by the government, and there are certain differences in the mediating effect of corporate environmental responsibility on corporate performance. Corporate environmental responsibility has a positive incentive effect on the performance of state-owned enterprises through green innovation. However, the mediating effect of environmental responsibility of private enterprises on the performance of iron and steel enterprises is not significant.

At present, all sectors of society are very concerned about environmental protection issues. If an enterprise insists on going its own way and sacrifices the environment in exchange for economic growth, it will be punished by the law and condemned by the public, thereby endangering the image and reputation of the enterprise, making it impossible for the enterprise to continue to operate. As a matter of fact, it is not inevitable that enterprises take environmental responsibility to reduce the performance and, especially from a long-term perspective, this conflict is not irreconcilable. Enterprises actively respond to the challenge of environmental responsibility. In the process of production and operation, they should always uphold the concept of environmental responsibility and apply the concept of corporate environmental responsibility to production management and cost control, which will help enterprises save production costs and management costs [62]. At the same time, it can stimulate innovation, develop new technologies that are more energy-saving and environmentally friendly, improve production efficiency, and reduce pollution emissions. It will enable enterprises to effectively avoid the government’s various penalties for excessive environmental pollution, and enjoy the government’s preferential tax policies for enterprises that meet environmental protection standards, and enhance their corporate image. Ultimately, it will affect the economic benefits of the enterprise and improve the performance of the enterprise [53,66]. In a word, enterprises and their managers should apply strategic vision, consider the importance of undertaking corporate social responsibility from a long-term perspective, and actively undertake environmental responsibilities, which is also conducive to maximizing enterprise value.

7. Conclusions and Recommendations

This section summarizes the main conclusions of the whole study, and puts forward relevant policy suggestions. Finally, it briefly discusses the shortcomings and further prospects of this study.

7.1. Conclusions

This study adopts the statistical data of the China Iron and Steel Industry Association, collects and constructs the environmental panel data set of 60 large enterprises in China’s steel industry from 2009 to 2017, and selects the SBM super-efficiency model to measure the environmental responsibility of China’s iron and steel enterprises. Based on this, the study empirically analyzes the impact and mechanism of corporate environmental responsibility on corporate performance, and puts forward policy suggestions.

The results show that, first, through the measurement of corporate environmental responsibility, it is found that the environmental responsibility level of Chinese iron and steel enterprises varies greatly. Second, the empirical results show that corporate environmental responsibility has a positive impact on corporate performance, and that corporate environmental responsibility has a lagging effect. Third, the research results of the impact mechanism show that corporate environmental responsibility has a positive incentive effect on corporate performance through green innovation. Fourth, the heterogeneity test results show that corporate environmental responsibility in the eastern and central and western regions has a positive incentive effect on the economic performance of iron and steel enterprises through green innovation. The impact of green innovation on corporate performance is greater in the central and western regions than in the eastern regions. The mediating effect of state-owned enterprises affecting enterprise performance through green innovation is significant, while the mediating effect of private enterprises is not significant. At present, China’s steel industry is in a period of strategic transformation, from a labor-intensive enterprise to an environment-friendly and efficient capital-intensive enterprise. Therefore, Chinese iron and steel enterprises should take the initiative to undertake environmental responsibilities and maximize environmental and economic benefits.

7.2. Recommendations

This paper aims to make a tangible contribution to improving the performance of environmental responsibility of iron and steel enterprises, and it is expected that the research results can provide guidance for the future environmental management of iron and steel enterprises. Accordingly, we propose the following policy recommendations.

The government plays an important role in the process of enterprises fulfilling their environmental responsibilities. In view of the current low level of environmental responsibility of iron and steel enterprises and the lack of awareness of actively fulfilling environmental responsibility, the government should continue to strengthen environmental regulations and guide enterprises to actively fulfill corporate environmental responsibility. The following aspects should be paid attention to in the formulation of environmental protection policies. First of all, we should improve the market mechanism, give full play to the incentive role of the market, and use the power of the market to promote enterprises to carry out environmental governance. The economic benefits of enterprises based on the market mechanism can more continuously and effectively motivate enterprises to actively fulfill their environmental responsibilities. Second, environmental policy formulation should fully consider regional heterogeneity. Achieving the goals of environmental protection, energy conservation, and emission reduction depends on regional resource endowments, and there are large differences in resource endowments between regions in China. Energy consumption, technological innovation activities, and funds are mainly concentrated in the eastern region, but the marginal cost of environmental protection in the eastern region is relatively high and the potential for pollution reduction and emission reduction is limited. Although the central and western regions have relatively abundant renewable energy resources and a large space for pollution reduction and emission reduction, the technical and financial conditions in the central and western regions are relatively insufficient. Finally, the heterogeneity of enterprise ownership should be fully considered. Compared with private enterprises, state-owned enterprises undertake more social functions and should fully consider the differences in their enterprise characteristics.

As the pillar industry of China’s economic development, the iron and steel industry is also a “high pollution, high energy consumption, and high emission” industry, so it must take a sustainable development path. In the process of actively responding to national policies, iron and steel enterprises should pay attention to the following points. First, do a good job in the planning and layout of the steel industry, and handle the relationship between environmental protection and economic benefits. Second, explore core key technologies, innovate technological processes, and accelerate green innovation of enterprises. Third, the enterprise itself must strengthen the concept of environmental responsibility to ok make it a part of the enterprise culture, and give full play to the subjective initiative of the enterprise employees. Having a proactive corporate environmental responsibility culture is rapidly becoming a source of competitive advantage for many enterprises. Environmental protection in the iron and steel industry is a systematic project related to the long-term healthy and prosperous development of the industry. It is necessary to meet not only the environmental protection needs of various stakeholder groups, but also the goals of corporate senior managers to create economic performance, so as to achieve a “win–win” between environmental protection and economic benefits.

7.3. Research Limitations and Prospects

This paper focuses on the research on the effect and mechanism of corporate environmental responsibility on corporate performance. The research angle, method, and content have been expanded to a certain extent, which can provide useful theoretical and practical references for research and policy formulation in related fields. However, there are still many deficiencies in the current research, which can be further expanded in the following aspects in the future. The research mainly considers the impact of environmental responsibility on the economic performance of enterprises, and it is necessary to conduct further in-depth research on all aspects of enterprises in future research. The research only uses data from Chinese steel enterprises, and does not compare them with enterprises in developed economies. Therefore, the interpretation of the results should be cautious in other economies with different political and economic systems and may require further exploration in the future.