University Research
Language Diversity, Social Trust, and Corporate Environmental Performance
Academic department
School of Accountancy
Description
We examine the impact of regional language diversity on corporate environmental performance. identifying a significant negative relationship. Our findings remain robust after addressing endogeneity concerns using strategies such as multiple fixed effects model, PSM and controlling for omitted variables. Leveraging manually collected data on China's clans and genealogies, we construct a unique instrumental variable for language diversity, further confirming our results. Additional analysis shows that the negative impact is stronger in regions with lower marketization and for firms with poor audit quality. Mechanism tests suggest that language diversity erodes social trust, a vital component of social capital, thereby weakening corporate environmental commitments. These findings highlight the challenges of enhancing environmental performance in linguistically diverse regions and underscore the importance of social trust in driving environmental protection.
Publisher name
Elsevier
Document Type
Article
Digital Object Identifier (DOI) Link
https://doi.org/10.1016/j.bar.2025.101589
Publication Date
2-5-2025
Publication Title
The British Accounting Review
First Page
1
Last Page
24
Recommended Citation
Goodell, John W.; Cui, Xin; Li, Shengnan; and Liao, Jing, "Language Diversity, Social Trust, and Corporate Environmental Performance" (2025). University Research. 18.
https://ideaexchange.uakron.edu/university_research/18