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A lack of clear political commitment together with confusing rules and enforcement often characterize the institutional context of policy implementation and regulatory compliance in developing countries. By connecting such contextual features to existing models of policy implementation and regulatory compliance, we examine how regulatory factors are related to basic and proactive corporate environmental management practices in the Pearl River Delta region in China. Drawing on data derived from both a survey and in‐depth interviews, we show that a perception of clear political commitment to environmental protection across multiple government levels and units is positively associated with business efforts in basic environmental practices, regardless of the specific enforcement intensity. Nevertheless, a perception of clear political commitment is not related to proactive environmental practices. Conversely, a perception of policy ambiguity, in the form of confusing regulatory standards and enforcement, is negatively associated with corporate efforts in both basic and proactive environmental practices; yet, intensive inspections mitigate these negative associations with policy ambiguity. [ABSTRACT FROM AUTHOR]

The People's Republic of China (PRC) has made substantial progress in developing environmental legislation and a complementary regulatory structure. These gains are directly related to the economic reforms and opening to the outside worm that began in the 1970s, which introduced a greater emphasis on efficiency and more awareness of the costs associated with pollution and environmental degradation. However, the economic growth and devolution of power unleashed by the reforms have also created new environmental stresses and to some extent reduced the regulatory capability of governmental authorities. As a result, some environmental stresses are increasing even as progress is made on other fronts. Political participation is restricted and environmental issues only occasionally acquire political salience. However, international pressure on the PRC to conform its conduct to international environmental norms is likely to increase, which is likely to affect domestic policymaking. [ABSTRACT FROM AUTHOR]