Is "going green" good to all? Evidence from South Korea

Stakeholders have heterogeneous expectations and demands for corporate environmental responsibility (CER). Going green may cause potential conflicting-interests among stakeholders, because stakeholders who benefit from environmental-management endorse making and implementing environmental-friendly policies. In contrast, stakeholders who bear the costs of a firm's corporate greening may not support CER initiatives. Firms with differentiated strategic-orientation, which reflect preferences of select stakeholders (controlling families, consumers, and employees), exhibit different perception of and response to CER. Using a panel dataset of South Korean manufacturing firms from 2011 to 2015, this study investigates benefits and costs of CER by exploring relationships among family owned and managed, consumer-oriented, employee-oriented firms, and corporate environmental performance (CEP). Our empirical results show that family owned and managed and employee-oriented firms are less likely to engage in environmentally friendly management. This activity occurs because corporate greening may damage these firms' interests, such as controlling family shareholders' private wealth and their employee's work-life balance.