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Institutional Forces and Environmental Management Strategy: Moderating Effects of Environmental Orientation and Innovation Capability

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  • Kang, Yuanfei
  • He, Xinming

Abstract

We examine the mechanisms through which firm capabilities moderate the impact of institutional forces upon firms’ adoption of environmental management strategy (EMS). Viewing the limitations of the institutional perspective in explaining the heterogeneity in firms’ EMS, we suggest that an important source of variation is the idiosyncratic capabilities of the firm in acquiring and allocating resources. Based on the strategic response theme of institutional theory and the resource-based view, we argue that the influence of institutional forces on EMS is contingent on the presence of environmental orientation and innovation capability. Using data collected from China, we test these notions. Our empirical results suggest that both environmental orientation and innovation capability positively moderate the effect of institutional forces on firm's EMS. By demonstrating how institutional forces and firm capabilities interact with each other, we enhance our understanding of how firms succeed in developing EMS.

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  • Kang, Yuanfei & He, Xinming, 2018. "Institutional Forces and Environmental Management Strategy: Moderating Effects of Environmental Orientation and Innovation Capability," Management and Organization Review, Cambridge University Press, vol. 14(3), pages 577-605, September.
    • Handle: RePEc:cup:maorev:v:14:y:2018:i:03:p:577-605_00
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    Cited by:

    1. Xiu-e Zhang & Xinyu Teng, 2023. "Effects of environmental orientation on agricultural enterprises’ performance: mediation and moderation analyses," Asian Business & Management, Palgrave Macmillan, vol. 22(3), pages 955-977, July.
    2. Xihui Chen & Juan Ou & Xuemei Tang & Qinghe Yang, 2023. "The Impact of Officials’ Off-Office Accountability Audit of Natural Resource Assets on Firms’ Green Innovation Strategies: A Quasi-Natural Experiment in China," Sustainability, MDPI, vol. 15(3), pages 1-36, February.
    3. Christoph Constantin Niemann & Petra Dickel & Gordon Eckardt, 2020. "The interplay of corporate entrepreneurship, environmental orientation, and performance in clean‐tech firms—A double‐edged sword," Business Strategy and the Environment, Wiley Blackwell, vol. 29(1), pages 180-196, January.
    4. Huixiang Zeng & Xuemei Li & Qiong Zhou & Lin Wang, 2022. "Local government environmental regulatory pressures and corporate environmental strategies: Evidence from natural resource accountability audits in China," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3060-3082, November.
    5. Chavez, Roberto & Malik, Mohsin & Ghaderi, Hadi & Yu, Wantao, 2021. "Environmental orientation, external environmental information exchange and environmental performance: Examining mediation and moderation effects," International Journal of Production Economics, Elsevier, vol. 240(C).
    6. Hameeda A. AlMalki & Christopher M. Durugbo, 2023. "Systematic review of institutional innovation literature: towards a multi-level management model," Management Review Quarterly, Springer, vol. 73(2), pages 731-785, June.
    7. Zhenyu Jiang & Zongjun Wang & Yanqi Zeng, 2020. "Can voluntary environmental regulation promote corporate technological innovation?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 390-406, February.
    8. Zdenka Gyurák Babeľová & Augustín Stareček & Dagmar Cagáňová & Martin Fero & Miloš Čambál, 2019. "Perceived Serviceability of Outplacement Programs as a Part of Sustainable Human Resource Management," Sustainability, MDPI, vol. 11(17), pages 1-21, August.
    9. Suresh Kumar Jakhar & Arijit Bhattacharya & Himanshu Rathore & Sachin Kumar Mangla, 2020. "Stakeholder pressure for sustainability: Can ‘innovative capabilities’ explain the idiosyncratic response in the manufacturing firms?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2635-2653, September.
    10. Guoyou Qi & Hailiang Zou & Xuemei Xie, 2020. "Governmental inspection and green innovation: Examining the role of environmental capability and institutional development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1774-1785, July.
    11. Ishfaq Hamid & Mohammed Ahmar Uddin & Iqbal Thonse Hawaldar & Md Shabbir Alam & D. P. Priyadarshi Joshi & Pabitra Kumar Jena, 2023. "Do Better Institutional Arrangements Lead to Environmental Sustainability: Evidence from India," Sustainability, MDPI, vol. 15(3), pages 1-19, January.
    12. Hailan Guo & Ming Dong & Christos Tsinopoulos & Mengyuan Xu, 2024. "The influential capacity of carbon neutrality environmental orientation in modulating stakeholder engagement toward green manufacturing," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 292-310, January.
    13. Claudia Dias & Ricardo Gouveia Rodrigues & João J. Ferreira, 2021. "Small agricultural businesses' performance—What is the role of dynamic capabilities, entrepreneurial orientation, and environmental sustainability commitment?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1898-1912, May.
    14. Qiansong Zhang & Taiwen Feng & Long Cheng & Qingsong He, 2022. "Institutional force and firm performance: Do employee green involvement and flexibility‐oriented culture matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(4), pages 950-964, July.
    15. Akiebe Humphrey Ahworegba & Christophe Estay & Myropi Garri, 2020. "Institutional duality incidence on subsidiaries: configuration, differentiation and avoidance strategies," Post-Print hal-03632783, HAL.
    16. Zhunxin Huang & Zengrui Xiao, 2023. "Dynamic Capabilities, Environmental Management Capabilities, Stakeholder Pressure and Eco-Innovation of Chinese Manufacturing Firms: A Moderated Mediation Model," Sustainability, MDPI, vol. 15(9), pages 1-22, May.

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