Abstract
Drawing on institutional and signaling theories, this study examines how environmental corporate social responsibility (ECSR) affects firm performance in a dysfunctional institutional environment. We extend the ECSR literature by suggesting that ECSR indirectly influences firm performance through the mediating effects of business and political legitimacy. Based on a dataset of 238 firms in China, we find that ECSR affects business and political legitimacy followed by firm performance. Moreover, legal incompleteness weakens and legal inefficiency strengthens the effects of ECSR on business and political legitimacy.



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Acknowledgments
The authors thank Prof. Alex Michalos, Prof. Thomas Clarke, and the two reviewers for their constructive comments and helpful suggestions, which enable us to substantially strengthen our paper. We would like to thank the grants from the General Research Fund from the Research Grants Council, Hong Kong SAR Government (No. HKU793613) and National Natural Science Foundation of China (Nos. 71302144 and 71102096).
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Wei, Z., Shen, H., Zhou, K.Z. et al. How Does Environmental Corporate Social Responsibility Matter in a Dysfunctional Institutional Environment? Evidence from China. J Bus Ethics 140, 209–223 (2017). https://doi.org/10.1007/s10551-015-2704-3
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DOI: https://doi.org/10.1007/s10551-015-2704-3