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The authors consider systems that generate damage to environment as they get older and degrade. The purpose of this paper is to develop an optimal condition-based maintenance strategy for such systems in situations where they have a finite operational time requirement. The authors determine simultaneously the optimal number of inspections and the threshold level of environmental damage which minimize the total expected cost over the considered finite time horizon.

The environmental degradation level is monitored through periodic inspections. The authors model the environmental degradation process due to the equipment’s degradation by the Wiener process. A mathematical model and a numerical procedure are developed. Numerical calculations are performed and the influence of the variation of key parameters on the optimal solution is investigated.

Numerical tests indicate that as the cost of the penalty related to the generation of an excess damage to environment increases, inspections should become more frequent and the threshold level should be lowered in order to favor preventive actions reducing the probability to pay the penalty.

Given the complexity of the cost function to be minimized, it is difficult to derive analytically the optimal solution. A numerical procedure is designed to obtain the optimal condition-based maintenance policy. Also, the developed model is based on the assumption that the degradation follows a process with stationary independent increments. This may not be appropriate for all types of degradation processes.

The proposed optimal maintenance policy may be relevant and very useful in the perspective of green operations. In fact, this paper offers to decision-makers a comprehensive approach to implement a green maintenance policy and to rapidly understand the net effect of the maintenance policy with respect to environmental regulation requirements.

The main contribution consists in the modeling and optimization of the condition-based maintenance policy over a finite time horizon. Indeed, existing condition-based maintenance models over an infinite time horizon are not applicable for systems with a finite operational time requirement.

In this paper, the authors take the central environmental protection inspection (CEPI) as an exogenous shock to study the reaction of the stock market in China. Using the event study method, the authors check how the first round of the first batch of CEPI supervision affects the cumulative abnormal return (CAR) of the listed firms on the Shenzhen or Shanghai stock exchange. This paper aims to discuss the aforementioned objective.

In this paper, the authors take the first round of the first batch of CEPI supervision as a clean exogenous shock to study its effects on the capital market. The authors collect daily trading data from the China stock market and accounting research (CSMAR) database, with the sample containing 1,950 Chinese firms listed on either the Shenzhen or Shanghai stock exchanges. And detailed information on CEPI supervision is obtained from the official website of the Ministry of Ecology and Environment of the People's Republic of China. The event study method is adopted to analyze the reaction of the stock market under CEPI supervision. Specifically, the authors constructed the cumulative abnormal return of each firm around the event day of CEPI. To capture the deterrent effects of CEPI supervision, the authors examine the situation of polluting and non-polluting firms in the supervised provinces, adjacent provinces and provinces that are not supervised or close to the supervised provinces, respectively.

This paper throws light on the following: (1) the polluting firms in the supervised provinces were negatively impacted by CEPI within 20 trading days of the event day, and its effects spread to the polluting firms in the neighboring provinces; (2) CEPI had a favorable impact on the non-polluting businesses in the provinces that are neither supervised nor close to the supervised provinces. The authors contend that it is because the investment is being forced out of the polluting sector and into the non-polluting sector, which is more pronounced in the provinces not directly or indirectly targeted by CEPI; (3) by comparison, the “looking back monitoring of the first round” has had no discernible detrimental impact on the firms' CAR, indicating an important role of psychology anticipation of investors in the stock market performance; (4) although not physically located in the supervised provinces, the downstream enterprises of the polluting firms suffer significantly from CEPI shock; (5) the effectiveness of CEPI supervision in the supervised provinces depends on the level of local environmental regulation and the ownership structure of the company. Private firms in the provinces with stronger environmental regulations suffer more from the CEPI shock; (6) the multivariate analysis shows that while enterprises with high ROE and financial leverage may be at risk of CAR loss, older, larger firms are less likely to experience CEPI shock; (7) the study of persistent effect reveals that the strike of CEPI supervision can last for at least 10 months after the event day and deterrent effect can be spread within the whole polluting industry.

In this paper, the authors only concentrate on the market reaction within 20 trading days after the event day. An analysis of long-term effects should be valuable to get a deeper knowledge of the capital market reaction to the CEPI policy. In addition, the paper only focuses on the first round of the first batch of CEPI. Since CEPI has been built as a constant regulation of local environmental performance, further study may need to track both the reaction of listed firms and investment behavior in the capital market.

Policy implications of the paper are as follows: First, for the policymakers, it is important to construct a constant environmental regulation system instead of a campaign movement. Second, for investors, as environmental issues are receiving increasing attention from both the government and the public, investment decisions should take into account firms' environmental performance, which can help reduce the risk from environmental regulations. Third, the firms in the polluting industry should take more action to reduce pollutant releases and adopt green technology, which is essential for sustainable development under environmental protection.

This paper contributes to the existing literature in the following aspects. First, the authors provide new evidence on the effects of environmental regulations as a shock to the stock market, which has been wildly concentrated in the literature about environmental policies evaluation and capital market reaction. Second, the authors supplement the literature on green finance and sustainability transformation, which has got increasing attention in recent years. Theoretically, by guiding investment and affecting the stock market performance, environmental regulations are considered to be an efficient way to stimulate polluting firms to transform into green development. The results of the paper support this intuition by showing that the CAR of the non-polluting firms in non-supervised provinces in fact benefit from the CEPI supervision.

In recent years, “trade up” argument has gained momentum. It argues that international integration can benefit developing countries' environments by fostering the adoption of voluntary environmental standards, such as International Organization for Standardization (ISO) 14001 certification. Based on this argument, a social marketing program that encourages greenness among buyers, especially downstream industrial buyers (for example, auto industry) in developed countries could motivate firms in developing countries go green. The purpose of this paper is to provide an investigation on whether “trade up” is a real hope, and what is required to make it real.

Theoretical modeling and case studies.

This paper finds that international trade does gear up the adoption of ISO 14001 standards in China through increasing pressures from international green customers. However, our analyses suggest that the adoption of ISO 14001 certification does not necessarily improve firms' compliance with existing environmental regulations in China. The actual impact depends on how stringently environmental agency carries out inspections. We also find that in China, ISO 14001 certification motivates little, if any, environmental performance improvement beyond bottom‐line environmental regulations.

This finding suggests that the “trade up” argument as well as a social marketing strategy targeting international buyers (including downstream industries) need to be scrutinized carefully before being used to guide practice.

Few efforts have been made to explore the actual impacts of ISO 14001 certification in developing countries. This paper fills this gap. It provides empirical support for Andreasen's argument that social marketing should be applied more broadly to achieve the desired impacts.

Due to environmental externalities, micro-enterprises with profit-seeking features do not develop sufficient motivation for environmental governance. In a fiscally decentralized system, local environmental protection authorities perform environmental supervision, and the intensity of the regulations that they implement has an important influence on corporate environmental governance. Based on the promotion tournament framework, this paper aims to discuss the driving mechanism of corporate environmental governance using turnover of environmental protection department directors (EPDDs) as an indicator.

Using samples of A-share companies listed on the Shanghai and Shenzhen exchanges from 2007 to 2014, this paper examines the impact of EPDD turnover on corporate environmental governance and its underlying mechanism.

The results show that corporate environmental governance exhibits a political periodicity that changes with the turnover of the EPDD, and the periodicity remains after controlling for the influence of changes in provincial party secretary and governor. Internal mechanisms analysis indicates that, without financial independence, local environmental protection departments rely on increasing sewage charges, not environmental protection subsidies, to promote corporate environmental governance. Further, considering heterogeneity among officials, it finds that the younger a new EPDD is, the more pronounced the periodicity of corporate environmental governance. However, there is no significant difference between in-system and out-system turnover.

In general, this paper describes the mechanisms of corporate environmental governance from the perspective of political economics, and the results have implications for the potential improvement of the government’s environmental supervision functions and the development of ecological civilization in China.

This article explores the different approaches taken to environmental regulation of the small firm in the UK and The Netherlands and the relationship of such regulation with the attitudes of small business owner‐managers. Using evidence from 40 interviews with businesses in both countries, we contrast the engagement and orientation of these enterprises with the business‐environment agenda. In both countries, government rhetoric stresses the harmony between business and environmental objectives: on the ground, attitudes of owner‐managers stress that these goals are far from complementary. In the UK, owner‐managers feel that environmental issues are a legitimate area of concern, but government should take the lead in addressing business‐environmental issues. Here, businesses are reacting to a policy context where environmental issues are seen as either a cost on the business, or presented as having simplistic win‐win outcomes. Businesses themselves, however, perceive it very much as an additional burden. In The Netherlands, SMEs have been targeted by the State by joint regulation through legislation, licensing and voluntary initiatives. This results in generally higher levels of environmental care. Small firms in The Netherlands appear to have accepted the importance of this and their shared responsibility for environmental care. In view of the shifting business‐environment policy debate in the UK, it is unlikely that the current reliance on voluntary initiatives and economic incentives will bear fruit. Different approaches may need, therefore, to be explored.

Drawing on the international business and game theory literature, this study assesses foreign firm treatment in the early stages of regulatory enforcement.

Treating regulation intensity as an exposure variable, negative binomial regression models were applied to firm-level data from 32 emerging markets (n = 15,331) to identify the determinants of inspection interactions. Robustness checks also were performed via variable substitutions for several predictors and an alternative form of statistical testing (i.e. Tobit regression, since it arguably better addresses dependent variables with corner solution responses).

Controlling for multiple organizational, regulatory and national characteristics, the findings are consistent with a foreign privilege, manifesting in reduced vulnerability to multiple encounters with labor inspection officials. Moreover, inward FDI stock was negatively related to the general probability of repeat interactions regardless of locus of ownership, an effect that was not moderated by stage of development or the regulatory influence of host interest groups. This collectively suggests that foreign firms not only are favored in compliance monitoring but also work post-entry to influence agencies to generally benefit business.

More comprehensive assessments were precluded given the lack of information on reasons for contact, citations and fines, and inspectorate reactions to company responses. Second, enforcement-risk management was measured indirectly since investors' internal dealings and actions toward officials are unavailable in secondary sources.

These findings have important implications for social responsibility, suggesting CSR stakeholders need to track enforcement more closely and exert pressure where needed so rights are not sacrificed for economic development.

This study provides the most rigorous assessment to date of the role that firm, government and economic factors play in national inspection targeting. It also examined whether foreign owners pool and leverage their political influence to impact general inspection activity, a previously untested prospect.

The study aims to investigate the appearance of corporate social and environmental responsibility (CSER) practices in a context where economic, communal and political institutions are highly central and competing with each other.

Theoretically, the study draws upon the institutional logics perspective and the theoretical concepts of logics centrality and compatibility to understand how higher-order institutions interact with mundane CSER practices observed at the case company's micro level. Empirical data were solicited in an Egyptian village community, where fishing, agriculture and especially salt production constitute the main economic activities underlying its livelihood. A combination of interviews, informal conversations, observations and documents solicits the required data.

Thereby, this study presents an inclusive view of CSER as practiced in developing countries, which is based not only on rational economic perspectives – as is the case in developed and stabilised contexts – but also on social, familial and political aspects that are central to the present complex institutional environment.

The reported findings in this study highlight the role of non-economic (societal) logics in understating CSER in African developing nations.

This article demonstrates the importance of intelligent measuring systems, particularly computer vision systems for automatic visual inspection.

There has been a substantial growth in the construction industry in the last decades. However, as this sector grows, there is also a growth in its effects on the environment. Owing to this fact, professionals in the sector are promoting practice focusing on how these environmental impacts caused by construction activities can be reduced to the barest minimum during and after construction. This study focuses on the environmental performance of construction projects with the goal of mitigating the negative environmental impacts of building construction. In this chapter, the environmental performance characteristics, forms of pollution that cause these environmental difficulties and the relevance of sustainable construction were not overlooked.

The author aims to provide a macro (organization‐environment) view for knowledge creation (KC), a study traditionally considered to be a micro (individual‐organization) management issue.

Literature review and literature integration are the main approaches used in this paper. Instead of providing a critique, the author reviews recent KC process studies and integrates them into a “process heuristic,” in which different phases of KC activity are embedded. The author then discusses how each phase of KC interacts with the change of an organization's external environment (the integration of change theories and the KC process heuristic).

The author found that an organization needs the function and balance of three different momenta – imitation, rationality, and inertia – to proceed with KC when confronted with pressure from external environments. Knowledge feedback, prompted by the synergy of these momenta, ensures the fitness of an organization and its environment. However, knowledge feedback falls short if organizations fail to process ambiguous information in a turbulent environment.

The author provides five propositions based on the literature review. One may need more qualitative or quantitative evidence to test these propositions.

In addition to the traditional micro view, managers can diagnose their KC problems from a macro view.

This paper is the first one to address the importance of environment‐organization fitness in terms of KC studies.