Sustainable development and environmental ingenuities: The influence of collaborative arrangements on environmental performance

Modern-day firms are under extreme pressure from diverse stakeholders to integrate environmentalism, mainly sustainable, social, and environmental ingenuities like biodiversity initiatives, into their business strategy. Collaborative arrangements in the form of business groups can positively influence sustainable development and environmental ingenuities by adhering to environmental policies and regulations and pursuing environmental orientation as they have a higher political or social visibility. However, such collaborations may negatively influence ecological and carbon footprints as their stronger political legitimacy means that they are less worried about undertaking legitimation activities in the drive toward environmental protection and restoration, such as enhanced sustainable social and environmental performance. This paper adds to the emerging conflicting business strategy and environment literature to resolve whether corporate's collaborative actions protect the environment or further deteriorate it in the form of increased or decreased sustainable social and environmental performance. Using a large sample of 21,086 firm-year observations from 2010 to 2018 in China (the world's biggest polluter), we find a negative and significant relationship between corporate's collaborative actions and sustainable social and environmental performance, implying that such collaborative arrangements have worse sustainable social and environmental performance than non-collaborative (individual) firms. The findings highlight vital guidelines in framing stratagems about ecological protection and restoration and effectively improving the environmental footprints of the firms. Our results constitute the interests of policymakers and controllers concerned with evaluating initiatives pertaining to ecological protection and sustainable development among the collaboratively managed enterprises.