In the name of awards: environmental award, legitimacy dominance, and corporate pollution

Legitimacy theory proposes that firms must obtain and maintain legitimacy to gain the support of various stakeholders. Our study argues that different legitimacy dimensions are of different importance to enterprise survival and development. A crowding-out effect exists among such dimensions. When political legitimacy dominates, enterprises utilize their achieved political legitimacy to engage in moral illegitimacy activities. Therefore, we argue that official environmental awards confer political legitimacy on firms, which give up maintaining moral legitimacy and then still pollute environment. State-owned status further strengthens political legitimacy, which is enough to offset moral illegitimacy threats, resulting in enterprises still polluting. Media scrutiny further weakens the crowding-out effect of political legitimacy, which means that political legitimacy can no longer offset the rising pressure of moral legitimacy, thereby reducing corporate pollution in response to moral legitimacy. Empirical research based on listed Chinese heavy-polluting firms from 2009 to 2020 supports the above hypothesis. Our conclusions answer the question “why do enterprises that receive official environmental awards still pollute?”; thus, research on legitimacy management and corporate pollution action is enriched.