Mortality salience and corporate environmental investment: evidence from Chinese heavily polluting listed firms

ABSTRACT

Terror management theory argues that mortality salience can engender greater prosocial behaviour. We extend this theory to corporate environmental practice. Using a sample of Chinese listed firms in heavily polluting industries, the results of difference-in-differences model show that firms significantly increase their environmental investment after the top executives experience mortality salience triggered by their colleague death. Moreover, we further show that the core relationship is amplified in situations where the death is sudden and firm is located in areas with strong public environmental awareness.

KEYWORDS:

• Corporate environmental investment
• death
• mortality salience
• terror management theory

JEL CLASSIFICATION:

• E22
• G34
• O16

Acknowledgments

We acknowledge the financial support from the Humanities and Social Science Foundation of Ministry of Education of China (grant number 20YJC790046) and the Fundamental Research Funds for the Central Universities (HUST: 2021WKYXQN003).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Ministry of Education of Humanities and Social Science Project [20YJC790046] and the Fundamental Research Funds for the Central Universities [HUST: 2021WKYXQN003].