The effects of environmental regulations on corporate social responsibility and the brand equity paradox

BACKGROUND AND OBJECTIVES: With environmental regulations in China becoming increasingly stringent, whether corporate social responsibility enhances or undermines brand equity remains an open question. The study objectives were ۱) to test the direct effect of corporate social responsibility on brand equity, ۲) to examine the mediating roles of financing constraints and technological innovation inputs, and ۳) to assess the heterogeneous moderating effects of different environmental regulations, while also accounting for spatial interdependence among firms.METHODS: To analyze the data, this study applies a spatial autoregressive model with fixed effects to a panel of Chinese A-share listed manufacturing firms observed between ۲۰۱۵ and ۲۰۲۰. Robustness checks include alternative variable measures, the inclusion of omitted variables, model replacement, and endogeneity treatments. Mediation, moderation, and heterogeneity effects were assessed through a series of stepwise regression models incorporating relevant interaction terms.FINDINGS: Corporate social responsibility practices are found to significantly reduce brand equity, with a coefficient of -۷۴.۵۲۰ at the ۱ percent significance level, and brand equity exhibits a strong positive spatial correlation among firms in the same industry, with a spatial autoregressive coefficient of ۰.۳۵۰ at the ۱ percent level. At the ۱ percent significance level, financing constraints exert a suppression effect, partially offsetting the direct negative impact, leading to an increase of ۶۴۳.۱۹۳ in brand equity per unit of constraint intensity. Technological innovation inputs act as a partial mediator, with a positive effect of ۹۷.۵۹۲ on brand equity at the ۱ percent level. Heterogeneity tests indicate that the negative relationship is more pronounced for firms in regions with stringent environmental regulations, low innovation capacity, or low economic development, as well as for larger firms. In terms of moderating effects, self-disclosure and market-incentive regulations intensify the negative impact; conversely, command-and-control and public-participation regulations exhibit a weakening effect.CONCLUSION: Overall, this study elucidates the corporate social responsibility-brand equity paradox by identifying dual mediating pathways and heterogeneous moderating effects of various environmental regulations. It also contributes to a replicable firm-level nested spatial weight matrix, advancing the use of spatial econometrics in brand research. Furthermore, the diversity of environmental regulations enables local governments to implement targeted policies mixes that discourage symbolic corporate social responsibility behaviors and encourage authentic green transformation.

کلیدواژه ها:

Brand equity ، Corporate Social Responsibility ، Heterogeneous environmental regulations ، Impact mechanism ، Spatial econometric model.