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Can institutional forces create competitive advantage? An empirical examination of environmental innovation


  • Berrone, Pascual

    () (IESE Business School)

  • Gelabert, Liliana

    (Universidad Carlos III)

  • Fosfuri, Andrea

    (Universidad Carlos III)

  • Gomez-Mejia, Luis R.

    (Arizona State University)


We examine institutional pressures as antecedents of environmental innovation. Drawing on institutional theory and a resource-based view of the firm, we argue that regulatory and normative forces influence companies' propensity to innovate in environment-related projects. Furthermore, we suggest that this relationship is contingent on the availability and specificity of the companies' resources. These relationships were tested using environmental patents and citations of 340 publicly-traded companies from polluting industries in the U.S. Results suggest that institutional pressures can be a source of competitive advantage, and regulatory forces are becoming more strongly associated with environmental innovations as the intensity of companies' R&D activities increase.

Suggested Citation

  • Berrone, Pascual & Gelabert, Liliana & Fosfuri, Andrea & Gomez-Mejia, Luis R., 2007. "Can institutional forces create competitive advantage? An empirical examination of environmental innovation," IESE Research Papers D/723, IESE Business School.
  • Handle: RePEc:ebg:iesewp:d-0723

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    References listed on IDEAS

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    3. Lanjouw, Jean Olson & Mody, Ashoka, 1996. "Innovation and the international diffusion of environmentally responsive technology," Research Policy, Elsevier, vol. 25(4), pages 549-571, June.
    4. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    5. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
    6. Anton, W.R.Q.Wilma Rose Q. & Deltas, George & Khanna, Madhu, 2004. "Incentives for environmental self-regulation and implications for environmental performance," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 632-654, July.
    7. Andrew King & Michael Lenox, 2002. "Exploring the Locus of Profitable Pollution Reduction," Management Science, INFORMS, vol. 48(2), pages 289-299, February.
    8. Glen Dowell & Stuart Hart & Bernard Yeung, 2000. "Do Corporate Global Environmental Standards Create or Destroy Market Value?," Management Science, INFORMS, vol. 46(8), pages 1059-1074, August.
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    Cited by:

    1. Berrone, Pascual & Gelabert, Liliana & Fosfuri, Andrea, 2009. "The impact of symbolic and substantive actions on environmental legitimacy," IESE Research Papers D/778, IESE Business School.
    2. Mirjana GRÈIÆ FABIÆ & Zdravko ZEKIÆ & Luka SAMARIJA, 2016. "Implementation of management innovation a precondition for the development of local government effectiveness: evidence from Croatia," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2016(27), pages 7-29, Decembre.
    3. Tracy A. Jenkin, 2013. "Extending the 4I Organizational Learning Model: Information Sources, Foraging Processes and Tools," Administrative Sciences, MDPI, Open Access Journal, vol. 3(3), pages 1-14, August.

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    environmental innovation; institutional theory; resource-based view;

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