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

Round 1

Reviewer 1 Report

The paper is not up to date - this issue has been reported to the editor, but still it is necessary to supplement the research for the years 2018-2021, as well as supplement the literature for the years 2019-2022.

Apart from that, the paper is well written, although it needs some clarifications:

I. Title:

The title is too long, please precise what it the main issue

II. Structure and clarity

The structure of the article is correct, but the Introduction, Literature Review, Discussion and Conclusions should be more clarified (please see the details below).

III. Abstract and Introduction

The Introduction doesn`t indicate the methodology (the most important part of a introduction).

Abstract and Introduction don`t indicate the originality of your research, it should be underwritten the novum of your approach.

Moreover, the Introduction in some places is chaotic and not précised

Please refresh the literature review, the paper doesn’t present the recent research (non of 2022, 2021, 2020, only 4 of 2019). By comparing this aspect with years of empirical research, it leads to the conclusion that the article is not up to date

IV. The literature review

1) “2.1. Research on Corporate Environmental Responsibility“ – there is no need to explain such basic ideas, so I would suggest to remove the whole section

2) in this place 2.1. it should be presented the theory background:

 – why?

- What for?

In the paper tehre are only some sentances about theoretical justification.

Please try to analysed the research problem based on some positive theories like:

 – legitimacy theory,

– stakeholder theory,

– institutional theory,

– signaling theory,

– decision usefulness theory

(see more f.e. Zyznarska-Dworczak, B. (2018). Accounting theories towards non-financial reporting. Studia Ekonomiczne, 356, 157-169. + Birjandi H., Hakemi B. (2015), The Study Effect Agency Theory and Signaling Theory on the Level of Voluntary Disclosure of Listed Companies in Tehran Stock Exchange, “Research Journal of Finance and Accounting”, Vol. 6(1), p. 174-183 )

3) “2.2 Research on the Relationship between Corporate Environmental Responsibility and Corporate 162 Performance” is too chaotic:

- it is necessary to say that there is huge heterogeneity and indicate/cite previous research, and especially that the results largely depend on the country of origin of the company and the branche/industry strategy, f.e. (please follow):

[1] Hang, M., Geyer‐Klingeberg, J., & Rathgeber, A. W. (2019). It is merely a matter of time: A meta‐analysis of the causality between environmental performance and financial performance. Business Strategy and the Environment, 28(2), 257-273.

[2] Beck, C., Frost, G., & Jones, S. (2018). CSR disclosure and financial performance revisited: A cross-country analysis. Australian Journal of Management, 43(4), 517-537.

- Please consider the visualization of results (a table?) - broken down into positive, negative, neutral relations between the examined variables,

V. The research specification – very clear, no remarks

VI. Discussion

- this is the missing part, please add it and assess your results:

1) towards theories;

2) towards other results presented in Literature Review

VII. Conclusions 

- The basic question arising from the research (“so what?”) is not answered. Please underwrite the novum of your research

- There is no connection between the indicated theory and the identified practice. 

Author Response

Responses to review comments

Revised Paper Submitted to Sustainability

The Influence Mechanism of Corporate Environmental Responsibility on Corporate Performance: The Mediation Effect of Green Innovation (Sustainability-1878871)

August 24, 2022

Dear Reviewer,

Thanks to you for the very constructive comments on our article. We have now revised the article accordingly. All the changes have been marked up using the “Track Changes” function in the manuscript.

(1) The paper is not up to date - this issue has been reported to the editor, but still it is necessary to supplement the research for the years 2018-2021, as well as supplement the literature for the years 2019-2022.

Thank you for this suggestion. There are two main reasons for not using 2018-2021 data in this paper. First, since 2018, the Chinese government has made a lot of amendments to environmental laws and regulations. For example, the pollution discharge fee, which has been levied for nearly 40 years, has been officially abolished in the Environmental Protection Tax Law, and the water pollutant discharge standards have been redefined in the newly revised Law on the Prevention and Control of Water Pollution. The Law on Air Pollution Prevention and Control and the Law on Environmental Impact Assessment have also been revised. Since the research in this paper involves data such as sewage fee, waste water and exhaust gas, using data after 2018 will cause bias in empirical results due to the inconsistency of statistical standards. Second, the sample we used is the data of large steel enterprises provided by China Iron and Steel Association, some of which are non-listed companies, and the data have not been updated in time. Especially, the environmental data has only been updated to 2017. In the future, we will make further comparative research with the continuous update of data. In addition, according to your comments, we have added several new references throughout the paper, mainly in the Literature Review and Research Hypotheses section.

(2) The title is too long, please precise what it the main issue.

Thank you for this suggestion. In order to clarify the main research issue, we have revised the title as“The Influence Mechanism of Corporate Environmental Responsibility on Corporate Performance: The Mediation Effect of Green Innovation”.

(3) The Introduction doesn`t indicate the methodology. Abstract and Introduction don`t indicate the originality of your research, it should be underwritten the novum of your approach. Moreover, the Introduction in some places is chaotic and not précised.

Thank you very much for this suggestion. We revised the introduction in a wide range, reorganized the logic, supplemented the methodology, and clarified the innovation of this paper. 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.

(4) Please refresh the literature review, the paper doesn’t present the recent research.

Thank you for this suggestion. We have added several new references to refresh the literature review (see page 2-7).

(5) “2.1. Research on Corporate Environmental Responsibility” – there is no need to explain such basic ideas, so I would suggest to remove the whole section.

Thank you for your suggestion and this section has been removed.

(6) In this place 2.1. it should be presented the theory background.

Thank you for your constructive suggestion. According to the literature you provided, we added some theories, including Resource-Based View and Institutional theory in the Literature Review and Research Hypotheses section and other parts of the paper. These theories will further strengthen the theoretical basis and research background of this paper, and correspond to the selection of indicators and conclusions in the empirical part.

(7) “2.2 Research on the Relationship between Corporate Environmental Responsibility and Corporate Performance” is too chaotic.

Thank you for this suggestion. We rewrote this section and added the literature you provided and other latest literature (see page 4-5). Based on the suggestions of two reviewers, the research on “the relationship between corporate environmental responsibility and corporate performance” is further sorted out, making the content of this section more concise and clear.

(8) Discussion - this is the missing part, please add it and assess your results:1) towards theories; 2) towards other results presented in Literature Review.

Thank you for this suggestion. We have supplemented the Discussion section, in which the correspondence between the empirical results and theories, as well as the relationship to existing research, is expounded (see page 21-23).

(9) Conclusions - The basic question arising from the research (“so what?”) is not answered. Please underwrite the novum of your research. -There is no connection between the indicated theory and the identified practice. 

Thank you for this suggestion. We spent a lot of time to revise the Conclusion section, focusing mainly on the answer to the research question and the connection between the indicated theory and the identified practice. First, 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 be-tween corporate environmental responsibility and corporate performance. 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. Second, 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.

We hope the paper has been greatly improved, and the revision is satisfactory. Let me know if you have more questions.

Your sincerely,

Rong Liu

Author Response File: Author Response.pdf

Reviewer 2 Report

The manuscript must be inspected by an editorial service. Equations must be standardized in style. ‘the government and people's demand for environmental protection increases’ – you must be specific. 2018–2022 updates are needed.  The Introduction section includes too much general and unsubstantiated content. Research questions and hypotheses must be constructed based on specific supporting sources, preferably as recent as possible. ‘American economic ethicist’ – remove. Try and provide more references to support your ideas that are typically substantiated by only one source – and as recent as possible. E.g., ‘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 [4].’ ‘Previous studies by scholars have found that not all scholars hold a positive and optimistic attitude about the impact of corporate environmental responsibility mechanism on enterprises. Some scholars believe that investing in eco-environmental governance does not always help companies improve performance.’ ‘At present, many viewpoints believe that good corporate performance of environmental responsibilities can effectively reduce energy use and waste generation, enabling companies to save costs [32].’ ‘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 [33].’ Etc. You should compare your results with others in terms of concrete data for better research integrative value. ‘Recent studies have begun to delve into the transmission mechanism between corporate environmental responsibility and corporate performance.’ – ‘recent studies’ – provide some examples. The same here, while you should try to avoid close repetitive content: ‘Although some earlier studies have explored the more general relationship between corporate environmental responsibility and corporate performance, recent research suggests that the underlying mechanisms between corporate environmental responsibility and performance are complex and still understudied. Many scholars believe that further research is needed to clarify this link.’ ‘Research on corporate environmental responsibility’ – incomplete, appears 2 times’ (‘In addition to whether corporate environmental responsibility can improve corporate performance’, "high pollution, high energy consumption, high emission" – these too). ‘In addition to whether corporate environmental responsibility can improve corporate performance, in recent years, scholars have tried to find out the potential mechanism of corporate environmental responsibility affecting corporate performance.’ – need substantiation. ‘R & D investment to purchase pollution emission rights, thus crowding out the R & D investment of enterprises’ – poorly constructed. ‘Banerjee et al. Believe that’ – why initial capitalization? ‘According to the existing research’ – what specific research? ‘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’ – source needed. A Discussion section is needed. ‘Research Deficiencies’ – replace with ‘Research Limitations’. The reference list does not follow the journal’s style, is poorly edited, and some sources are incomplete. Also, too many old references.

The relationship between corporate environmental responsibility and sustainability management as regards green innovation behavior has not been covered, and thus such sources can be cited:

Lăzăroiu, G., Ionescu, L., Andronie, M., and Dijmărescu, I. (2020). “Sustainability Management and Performance in the Urban Corporate Economy: A Systematic Literature Review,” Sustainability 12(18): 7705. doi: 10.3390/su12187705.

Crișan-Mitra, C., Stanca, L., Dabija, D.C. 2020. Corporate social performance: an assessment model on an emerging market. Sustainability, 12(10), 4077. https://doi.org/10.3390/su12104077

May, A. Y. C., Hao, G. S., and Carter, S. (2021). “Intertwining Corporate Social Responsibility, Employee Green Behavior and Environmental Sustainability: The Mediation Effect of Organizational Trust and Organizational Identity,” Economics, Management, and Financial Markets 16(2): 32–61. doi: 10.22381/emfm16220212.

Obadă, D.R., Dabija, D.C. 2022. “In Flow”! Why Do Social-Media Users Share Fake News About Environmentally Friendly Brands on Social Media? International Journal of Environmental Research and Public Health, 19(8), 4861. https://doi.org/10.3390/ijerph19084861

Author Response

Responses to review comments

Revised Paper Submitted to Sustainability

The Influence Mechanism of Corporate Environmental Responsibility on Corporate Performance: The Mediation Effect of Green Innovation (Sustainability-1878871)

August 24, 2022

Dear Reviewer,

Thanks to you for the very constructive comments on our article. We have now revised the article accordingly. All the changes have been marked up using the “Track Changes” function in the manuscript.

(1) The manuscript must be inspected by an editorial service. Equations must be standardized in style.‘the government and people's demand for environmental protection increases’– you must be specific. 2018–2022 updates are needed.  

Thank you for this suggestion. We have modified the sentences of the article accordingly. There are two main reasons for not using 2018-2022 data in this paper. First, since 2018, the Chinese government has made a lot of amendments to environmental laws and regulations. For example, the pollution discharge fee, which has been levied for nearly 40 years, has been officially abolished in the Environmental Protection Tax Law, and the water pollutant discharge standards have been redefined in the newly revised Law on the Prevention and Control of Water Pollution. The Law on Air Pollution Prevention and Control and the Law on Environmental Impact Assessment have also been revised. Since the research in this paper involves data such as sewage fee, waste water and exhaust gas, using data after 2018 will cause bias in empirical results due to the inconsistency of statistical standards. Second, the sample we used is the data of large steel enterprises provided by China Iron and Steel Association, some of which are non-listed companies, and the data have not been updated in time. Especially, the environmental data has only been updated to 2017. In the future, we will make further comparative research with the continuous update of data. In addition, according to your comments, we have added several new references throughout the paper, mainly in the Literature Review and Research Hypotheses section.

(2) The Introduction section includes too much general and unsubstantiated content. Research questions and hypotheses must be constructed based on specific supporting sources, preferably as recent as possible.‘American economic ethicist’ – remove.  

Thank you for this suggestion. We have deleted some general and unsubstantiated content and revised the Introduction section. In the Literature Review and Research Hypotheses section, a large number of the latest literature has been added, and the revised content and readjustered structure make the logic of this section clearer.

(3) Try and provide more references to support your ideas that are typically substantiated by only one source – and as recent as possible. E.g., ‘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. You should compare your results with others in terms of concrete data for better research integrative value.

Thank you for your suggestion. We rewrote this section and added some latest literature. Based on the suggestions of two reviewers, the research on “the relationship between corporate environmental responsibility and corporate performance” is further sorted out, making the content of this section more concise and clear.

• ‘Recent studies have begun to delve into the transmission mechanism between corporate environmental responsibility and corporate performance.’ – ‘recent studies’ – provide some examples.  The same here, while you should try to avoid close repetitive content: ‘Although some earlier studies have explored the more general relationship between corporate environmental responsibility and corporate performance, recent research suggests that the underlying mechanisms between corporate environmental responsibility and performance are complex and still understudied. Many scholars believe that further research is needed to clarify this link.’

Thank you for this suggestion. In these places, we add literature published in recent years and provide some examples to supplement the illustration.

(5) ‘Research on corporate environmental responsibility’ – incomplete, appears 2 times’ (‘In addition to whether corporate environmental responsibility can improve corporate performance’, "high pollution, high energy consumption, high emission" – these too).  

Thank you for your detailed suggestion. We have revised the corresponding sentences.

(6)  ‘In addition to whether corporate environmental responsibility can improve corporate performance, in recent years, scholars have tried to find out the potential mechanism of corporate environmental responsibility affecting corporate performance.’ – need substantiation.  

Thank you for your suggestion. We have added some literature to improve this content (see page 5-7).

(7)  ‘R & D investment to purchase pollution emission rights, thus crowding out the R & D investment of enterprises’ – poorly constructed. ‘Banerjee et al. Believe that’ – why initial capitalization? ‘According to the existing research’ – what specific research? ‘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’ – source needed. 

Thank you for this suggestion. We have changed‘R & D investment to purchase pollution emission rights, thus crowding out the R & D investment of enterprises’to ‘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’. In addition, problems such as initial capitalization and lack of literature sources have been corrected and improved.

(8) A Discussion section is needed. ‘Research Deficiencies’ – replace with ‘Research Limitations’. The reference list does not follow the journal’s style, is poorly edited, and some sources are incomplete. Also, too many old references. 

Thank you for this suggestion. We've replaced ‘Research Deficiencies’ with ‘Research Limitations’. In addition, we have made comprehensive changes to the format of the references according to the journal’s style and supplemented the latest literature.

(9) The relationship between corporate environmental responsibility and sustainability management as regards green innovation behavior has not been covered, and thus such sources can be cited: ... 

Thank you for your patience and suggestion. We have supplemented the literature you provided and also added some other recent literature (see page 7).

We hope the paper has been greatly improved, and the revision is satisfactory. Let me know if you have more questions.

Your sincerely,

Rong Liu

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

The paper could be improved and go more into details of theory

Reviewer 2 Report

I have received the revised paper and I noticed the changings.