One size doesn’t fit all: how institutional complexity within the state shapes firms’ environmental innovation

Pan, Xin, Chen, Xuanjin, Guo, Haojing and Zhang, Yucheng (2020) One size doesn’t fit all: how institutional complexity within the state shapes firms’ environmental innovation. Business Ethics: a European Review, 29 (3), 438-450. (doi:10.1111/beer.12280).

Abstract

This study investigated how firms respond to conflicting demands within the state. Using Chinese listed firms data, we found that firms linked with central government relate positively to environmental innovation, while firms located in provinces with gross domestic product (GDP) priority exhibited a negative influence on environmental innovation. Beyond the independent roles of central and local government expectations, we found that central and local government demands work interdependently to negatively affect firms’ environmental innovation, such that firms located in GDP priority regions lower the positive impact of the central government on environmental innovation. The present study added to the existing literature by unpacking government roles into two competing sets of expectations, independently and interdependently.

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Contributors

Author: Yucheng Zhang

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