Seminar (Dept. of General Management)

Title: A grey mark on your mind: How the hazardous smog dampens management commitment to green credit

Speaker: Shili Chen (Xi’an Jiaotong-Liverpool University)

Time: 10:00 am, Dec 8th (Tuesday), 2022

Venue: Online Meeting

Language: Chinese/English

ABSTRACT:

This study investigates whether and how air pollution influences managerial decision-making regarding the green transition. We rely on the cognitive activation theory of stress and the theory of learned helplessness to argue that even though exposure to severe air pollution may increase management concerns about environmental problems, it also induces environmental helplessness among top executives by intensifying their concerns about the collective action problem inherent in environmental protection, thereby hindering their commitment to the green transition. We further argue that higher levels of education can potentially reduce such air pollution-induced environmental helplessness, which weakens the negative impact of air pollution on management commitment to the green transition. These ideas are tested in the context of the green credit transition in China’s banking sector. Using a sample of Chinese listed banks from 2017 to 2019, we show a negative relationship between air pollution at the bank headquarters and the share of green credit to total credit. We also find this relationship to be weaker in banks where a larger proportion of executives possess a PhD degree. Our theory and findings highlight how air pollution affects managerial decision-making and call for attention to environmental helplessness as a barrier to corporate green transitions.

SHORT BIOGRAPHY:

Shili Chen is an assistant professor at the Department of Strategic Management and Organization of Xi'an Jiaotong-Liverpool University. She obtained her Ph.D. degree from the University of Groningen in the Netherlands. Her research focuses on corporate governance and corporate social responsibility (CSR). She has published in the Journal of Business Ethics. Her papers have won the Transnational Research Best Paper Award at the 2018 Academy of Management (AOM) and the Best Paper Award at the 2019 European Academy of Management  (EURAM).