IDEAS home Printed from https://ideas.repec.org/a/bla/popmgt/v30y2021i7p2046-2068.html
   My bibliography  Save this article

How Coopetition Influences Environmental Performance: Role of Financial Slack, Leverage, and Leanness

Author

Listed:
  • Sachin B. Modi
  • David E. Cantor

Abstract

Focal firms are struggling to improve their environmental performance for several reasons, including a scarcity of internal and external environmental resources. This study suggests that coopetition provides a boost to a focal firm’s environmental performance. In particular, this research theorizes that a coopetitor firm’s environmental performance has a spillover effect on a focal firm’s environmental performance. This study also investigates the moderating role of a focal firm’s financial slack, financial leverage, and inventory leanness on this relationship. The empirical analysis indicates that coopetitor firms’ environmental performance significantly influences a focal firm’s environmental performance. This relationship is weaker for firms with higher financial slack, and stronger for firms that have lower financial leverage and higher leanness. Collectively, these findings provide important managerial and research implications regarding the consequences of coopetition on a focal firm’s environmental performance.

Suggested Citation

  • Sachin B. Modi & David E. Cantor, 2021. "How Coopetition Influences Environmental Performance: Role of Financial Slack, Leverage, and Leanness," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2046-2068, July.
    • Handle: RePEc:bla:popmgt:v:30:y:2021:i:7:p:2046-2068
    DOI: 10.1111/poms.13344
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/poms.13344
    Download Restriction: no
    File URL: https://libkey.io/10.1111/poms.13344?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sandra A. Waddock & Samuel B. Graves, 1997. "The Corporate Social Performance–Financial Performance Link," Strategic Management Journal, Wiley Blackwell, vol. 18(4), pages 303-319, April.
    2. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    3. Dai, Jing & Montabon, Frank L. & Cantor, David E., 2014. "Linking rival and stakeholder pressure to green supply management: Mediating role of top management support," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 71(C), pages 173-187.
    4. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    5. Tari, Juan Jose & Molina, Jose Francisco & Castejon, Juan Luis, 2007. "The relationship between quality management practices and their effects on quality outcomes," European Journal of Operational Research, Elsevier, vol. 183(2), pages 483-501, December.
    6. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    7. Tarun Khanna, 1998. "The Scope of Alliances," Organization Science, INFORMS, vol. 9(3), pages 340-355, June.
    8. Ravi Subramanian & Ramanath Subramanyam, 2012. "Key Factors in the Market for Remanufactured Products," Manufacturing & Service Operations Management, INFORMS, vol. 14(2), pages 315-326, April.
    9. Henri Servaes & Ane Tamayo, 2013. "The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness," Management Science, INFORMS, vol. 59(5), pages 1045-1061, May.
    10. Magali A. Delmas & Michael W. Toffel, 2008. "Organizational responses to environmental demands: opening the black box," Strategic Management Journal, Wiley Blackwell, vol. 29(10), pages 1027-1055, October.
    11. Kim B. Clark, 1989. "Project Scope and Project Performance: The Effect of Parts Strategy and Supplier Involvement on Product Development," Management Science, INFORMS, vol. 35(10), pages 1247-1263, October.
    12. Judith L. Walls & Pascual Berrone & Phillip H. Phan, 2012. "Corporate governance and environmental performance: is there really a link?," Strategic Management Journal, Wiley Blackwell, vol. 33(8), pages 885-913, August.
    13. Arellano, Manuel & Honore, Bo, 2001. "Panel data models: some recent developments," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 53, pages 3229-3296, Elsevier.
    14. Benjamin R. Auer, 2016. "Do Socially Responsible Investment Policies Add or Destroy European Stock Portfolio Value?," Journal of Business Ethics, Springer, vol. 135(2), pages 381-397, May.
    15. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    16. Alberto Abadie & Guido W. Imbens, 2011. "Bias-Corrected Matching Estimators for Average Treatment Effects," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(1), pages 1-11, January.
    17. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    18. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    19. Fisher-Vanden, Karen & Thorburn, Karin S., 2011. "Voluntary corporate environmental initiatives and shareholder wealth," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 430-445.
    20. Robert D. Klassen, 2000. "Just-in-Time Manufacturing and Pollution Prevention Generate Mutual Benefits in the Furniture Industry," Interfaces, INFORMS, vol. 30(3), pages 95-106, June.
    21. Sarkis, Joseph & Zhu, Qinghua & Lai, Kee-hung, 2011. "An organizational theoretic review of green supply chain management literature," International Journal of Production Economics, Elsevier, vol. 130(1), pages 1-15, March.
    22. Bae, Kee-Hong & Kang, Jun-Koo & Wang, Jin, 2011. "Employee treatment and firm leverage: A test of the stakeholder theory of capital structure," Journal of Financial Economics, Elsevier, vol. 100(1), pages 130-153, April.
    23. Heitor Almeida & Igor Cunha & Miguel A. Ferreira & Felipe Restrepo, 2017. "The Real Effects of Credit Ratings: The Sovereign Ceiling Channel," Journal of Finance, American Finance Association, vol. 72(1), pages 249-290, February.
    24. Anupam Agrawal & Suresh Muthulingam & Tharanga Rajapakshe, 2017. "How Sourcing of Interdependent Components Affects Quality in Automotive Supply Chains," Production and Operations Management, Production and Operations Management Society, vol. 26(8), pages 1512-1533, August.
    25. Saurabh Mishra & Sachin Modi, 2013. "Positive and Negative Corporate Social Responsibility, Financial Leverage, and Idiosyncratic Risk," Journal of Business Ethics, Springer, vol. 117(2), pages 431-448, October.
    26. Andrew King & Michael Lenox, 2002. "Exploring the Locus of Profitable Pollution Reduction," Management Science, INFORMS, vol. 48(2), pages 289-299, February.
    27. Timothy B. Palmer & Robert M. Wiseman, 1999. "Decoupling risk taking from income stream uncertainty: a holistic model of risk," Strategic Management Journal, Wiley Blackwell, vol. 20(11), pages 1037-1062, November.
    28. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    29. Xu Chen & Xiaojun Wang & Yusen Xia, 2019. "Production Coopetition Strategies for Competing Manufacturers that Produce Partially Substitutable Products," Production and Operations Management, Production and Operations Management Society, vol. 28(6), pages 1446-1464, June.
    30. Aseem Kaul & Jiao Luo, 2018. "An economic case for CSR: The comparative efficiency of for‐profit firms in meeting consumer demand for social goods," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1650-1677, June.
    31. Michelle Gittelman & Bruce Kogut, 2003. "Does Good Science Lead to Valuable Knowledge? Biotechnology Firms and the Evolutionary Logic of Citation Patterns," Management Science, INFORMS, vol. 49(4), pages 366-382, April.
    32. Hicheon Kim & Heechun Kim & Peggy M. Lee, 2008. "Ownership Structure and the Relationship Between Financial Slack and R&D Investments: Evidence from Korean Firms," Organization Science, INFORMS, vol. 19(3), pages 404-418, June.
    33. Matthew S. Kraatz & Edward J. Zajac, 2001. "How Organizational Resources Affect Strategic Change and Performance in Turbulent Environments: Theory and Evidence," Organization Science, INFORMS, vol. 12(5), pages 632-657, October.
    34. Robert J. Batt & Diwas S. KC & Bradley R. Staats & Brian W. Patterson, 2019. "The Effects of Discrete Work Shifts on a Nonterminating Service System," Production and Operations Management, Production and Operations Management Society, vol. 28(6), pages 1528-1544, June.
    35. Jeff Shockley & Lawrence A. Plummer & Aleda V. Roth & Lawrence D. Fredendall, 2015. "Strategic Design Responsiveness: An Empirical Analysis of US Retail Store Networks," Production and Operations Management, Production and Operations Management Society, vol. 24(3), pages 451-468, March.
    36. Seung Ho Park & Michael V. Russo, 1996. "When Competition Eclipses Cooperation: An Event History Analysis of Joint Venture Failure," Management Science, INFORMS, vol. 42(6), pages 875-890, June.
    37. Donald B. Rubin, 2005. "Causal Inference Using Potential Outcomes: Design, Modeling, Decisions," Journal of the American Statistical Association, American Statistical Association, vol. 100, pages 322-331, March.
    38. David Dreyfus & Anand Nair & Srinivas Talluri, 2020. "The Impact of Chain Organization Size on Efficiency and Quality of Affiliated Facilities—Implications for Multi‐Unit Organizational Forms," Production and Operations Management, Production and Operations Management Society, vol. 29(7), pages 1605-1623, July.
    39. Kumar, Anupam & Cantor, David E. & Grimm, Curtis M., 2019. "The impact of a supplier’s environmental management concerns on a buyer’s environmental reputation: The moderating role of relationship criticality and firm size," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 448-462.
    40. Robert D. Klassen & Curtis P. McLaughlin, 1996. "The Impact of Environmental Management on Firm Performance," Management Science, INFORMS, vol. 42(8), pages 1199-1214, August.
    41. Chenchuramaiah T. Bathala & Kenneth P. Moon & Ramesh P. Rao, 1994. "Managerial Ownership, Debt Policy, and the Impact of Institutional Holdings: An Agency Perspective," Financial Management, Financial Management Association, vol. 23(3), Fall.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mehdi Bensouda & Mimoun Benali, 2023. "From Fairly Good to Optimal Energy Efficiency Practices within the Moroccan Manufacturing Sector: Are Financial Resources Sufficient?," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 478-488, May.
    2. Soumya Mukhopadhyay & V Kumar & Amalesh Sharma & Tuck Siong Chung, 2022. "Impact of review narrativity on sales in a competitive environment," Production and Operations Management, Production and Operations Management Society, vol. 31(6), pages 2538-2556, June.
    3. Saurabh Ambulkar & S. Arunachalam & Raghu Bommaraju & Sridhar Ramaswami, 2023. "Should a firm bring a supplier into the boardroom?," Production and Operations Management, Production and Operations Management Society, vol. 32(1), pages 28-44, January.
    4. Liang, Ting & Zhang, Yue-Jun & Qiang, Wei, 2022. "Does technological innovation benefit energy firms’ environmental performance? The moderating effect of government subsidies and media coverage," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    5. Jingchuan Pu, 2022. "Do Online Communities Improve Job Performance in the Geographically Dispersed Organization?," Production and Operations Management, Production and Operations Management Society, vol. 31(2), pages 403-421, February.
    6. Christian Hofer & Jordan M. Barker & Laura D'Oria & Jonathan L. Johnson, 2022. "Broadening our understanding of interfirm rivalry: A call for research on how supply networks shape competitive behavior and performance," Journal of Supply Chain Management, Institute for Supply Management, vol. 58(2), pages 8-25, April.
    7. Ye, Fei & Ouyang, You & Li, Yina, 2023. "Digital investment and environmental performance: The mediating roles of production efficiency and green innovation," International Journal of Production Economics, Elsevier, vol. 259(C).
    8. Giovanna Culot & Matteo Podrecca & Guido Nassimbeni & Guido Orzes & Marco Sartor, 2023. "Using supply chain databases in academic research: A methodological critique," Journal of Supply Chain Management, Institute for Supply Management, vol. 59(1), pages 3-25, January.
    9. David E. Cantor & Tingting Yan & Mark Pagell & Wendy L. Tate, 2022. "From the editors: Introduction to the emerging discourse incubator on the topic of leveraging multiple types of resources within the supply network for competitive advantage," Journal of Supply Chain Management, Institute for Supply Management, vol. 58(2), pages 3-7, April.
    10. Liang, Jing & Yang, Shilei & Xia, Yu, 2023. "The role of financial slack on the relationship between demand uncertainty and operational efficiency," International Journal of Production Economics, Elsevier, vol. 262(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Al-Shaer, Habiba & Uyar, Ali & Kuzey, Cemil & Karaman, Abdullah S., 2023. "Do shareholders punish or reward excessive CSR engagement? Moderating effect of cash flow and firm growth," International Review of Financial Analysis, Elsevier, vol. 88(C).
    2. Canarella, Giorgio & Miller, Stephen M., 2018. "The determinants of growth in the U.S. information and communication technology (ICT) industry: A firm-level analysis," Economic Modelling, Elsevier, vol. 70(C), pages 259-271.
    3. Fabrizio Rossi & Maretno Agus Harjoto, 2020. "Corporate non-financial disclosure, firm value, risk, and agency costs: evidence from Italian listed companies," Review of Managerial Science, Springer, vol. 14(5), pages 1149-1181, October.
    4. Ayman Hassan Bazhair, 2023. "Board Governance Mechanisms and Capital Structure of Saudi Non-Financial Listed Firms: A Dynamic Panel Analysis," SAGE Open, , vol. 13(2), pages 21582440231, May.
    5. Martinsson, Gustav, 2009. "Finance and R&D Investments - is there a debt overhang effect on R&D investments?," Working Paper Series in Economics and Institutions of Innovation 174, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    6. Lin, Woon Leong & Law, Siong Hook & Ho, Jo Ann & Sambasivan, Murali, 2019. "The causality direction of the corporate social responsibility – Corporate financial performance Nexus: Application of Panel Vector Autoregression approach," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 401-418.
    7. Elif Acar & Gamze Vural & Emin Hüseyin Çetenak, 2020. "Evidence for Financial Hierarchy Theory in Capital Structure Decisions: Data from BIST Companies," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 34(1), pages 29-50.
    8. James J. Cordeiro & Giorgia Profumo & Ilaria Tutore, 2021. "Family ownership and stockholder reactions to environmental performance disclosure: A test of secondary agency relationships," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 2091-2107, May.
    9. Alaali, Fatema, 2020. "The effect of oil and stock price volatility on firm level investment: The case of UK firms," Energy Economics, Elsevier, vol. 87(C).
    10. Rycx, François & Saks, Yves & Tojerow, Ilan, 2016. "Misalignment of Productivity and Wages across Regions? Evidence from Belgian Matched Panel Data," IZA Discussion Papers 10336, Institute of Labor Economics (IZA).
    11. Deleidi, Matteo & Mazzucato, Mariana & Semieniuk, Gregor, 2020. "Neither crowding in nor out: Public direct investment mobilising private investment into renewable electricity projects," Energy Policy, Elsevier, vol. 140(C).
    12. Mykhayliv, Dariya & Zauner, Klaus G., 2017. "The impact of equity ownership groups on investment: Evidence from Ukraine," Economic Modelling, Elsevier, vol. 64(C), pages 20-25.
    13. Marwa Elnahass & Kamil Omoteso & Aly Salama & Vu Quang Trinh, 2020. "Differential market valuations of board busyness across alternative banking models," Review of Quantitative Finance and Accounting, Springer, vol. 55(1), pages 201-238, July.
    14. Tzouvanas, Panagiotis & Kizys, Renatas & Chatziantoniou, Ioannis & Sagitova, Roza, 2020. "Environmental disclosure and idiosyncratic risk in the European manufacturing sector," Energy Economics, Elsevier, vol. 87(C).
    15. Antonio Ruiz Porras, 2016. "La investigación econométrica mediante paneles de datos:historia, modelos y usos en México," Archivos Revista Economía y Política., Facultad de Ciencias Económicas y Administrativas, Universidad de Cuenca., vol. 24, pages 11-32, Julio.
    16. Apostolos Dasilas & Nicolas Papasyriopoulos, 2015. "Corporate governance, credit ratings and the capital structure of Greek SME and large listed firms," Small Business Economics, Springer, vol. 45(1), pages 215-244, June.
    17. Bae, Kee-Hong & El Ghoul, Sadok & Guedhami, Omrane & Kwok, Chuck C.Y. & Zheng, Ying, 2019. "Does corporate social responsibility reduce the costs of high leverage? Evidence from capital structure and product market interactions," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 135-150.
    18. Christian Andres & André Betzer & Inga Bongard & Marc Goergen, 2019. "Dividend policy, corporate control and the tax status of the controlling shareholder," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 46(2), pages 157-189, June.
    19. Efstathios Magerakis & Ahsan Habib, 2022. "Environmental uncertainty and corporate cash holdings: The moderating role of CEO ability," International Review of Finance, International Review of Finance Ltd., vol. 22(3), pages 402-432, September.
    20. Enrico Onali, 2014. "Moral Hazard, Dividends, and Risk in Banks," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 41(1-2), pages 128-155, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:popmgt:v:30:y:2021:i:7:p:2046-2068. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1937-5956 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.