Environmental performance, corporate reputation and firm value: evidence from China’s chemical industry

This study examines how environmental performance influences firm value through corporate reputation and investigates the moderating role of corporate governance. Using panel data from Chinese listed chemical manufacturing firms (2020–2024), this study employs ordinary least squares regression, conditional process analysis, and quantile regression to test a moderated mediation framework. Environmental performance significantly enhances corporate reputation but does not directly improve firm value. Corporate reputation exhibits a negative effect on firm value, indicating potential short-term costs. However, this effect becomes positive when corporate governance quality is high. The indirect effect of environmental performance on firm value through reputation is significant only under medium to high governance levels. Additional analysis reveals an intertemporal trade-off, where environmental and reputational investments constrain short-term growth but enhance long-term value. This study identifies a conditional and intertemporal mechanism through which environmental performance affects firm value, highlighting the critical role of corporate governance in transforming reputational capital into economic outcomes.