The Effects of Executives’ low-carbon cognition on corporate low-carbon performance: A study of managerial discretion in China

Abstract

Corporations are recognized as key agents for low-carbon economy development. Executives’ low-carbon cognition may function as an important driver for corporations’ low-carbon performance. Yet, the extant liter ature has paid limited attention to executives’ low-carbon cognition and firms’ performance. Based on the upper echelons theory, this study empirically explored this mechanism by sampling corporations (N = 418) from the high-tech and manufacturing industries in China. Specifically, we examined the impact of executives’ low-carbon cognition on corporate low-carbon management performance (CLMP) and corporate low-carbon financial per formance (CLFP), while exploring the intermediary role of managerial discretion between executives’ low-carbon cognition and low-carbon behavior. We observed that: (1) Executives’ low-carbon cognition indirectly affects CLMP and CLFP, and corporate low-carbon behavior plays an intermediary role in this process; (2) Managerial discretion positively regulates the relationship between executives’ low-carbon cognition and low-carbon behavior; (3) Managerial discretion positively regulates the intermediary role of low-carbon behavior between executives’ low-carbon cognition on CLMP and CLFP. Theoretically, the present study deepens the strand of empirical studies on executives’ low-carbon cognition and corporate low-carbon performance. Moreover, the study builds a rigorous foundation for the application of the higher-order and the corporation behavior theories in low-carbon research fields. Further, the study serves as a mine of reference for future related studies on low- carbon performance while providing practical enlightenment for low-carbon management.