Heterogeneous choices of environmental strategies for heavily polluting firms under institutional pressure in China
2022
Wang, Sen | Yin, Jianhua | Zhu, Xiaomei
The question of how organisations choose their environmental strategy remains an unsolved problem in institutional theory. We argue that institutional pressure and the characteristics of the firm affect choices around environmental strategies. An empirical analysis of 597 heavily polluting firms indicates that more firms choose environmental leadership strategies, which means that they actively work with upstream and downstream firms to reduce emissions, when government pressure is the greatest; however, more companies are likely to choose pollution prevention strategies, which implies recycling materials in the production process is implemented, when public pressure is the greatest. Finally, organisations with more redundant resources and strong asset specificity are more prone to choose environmental leadership strategies as policy pressure or public pressure increases. The findings offer a decision-making framework to promote environmental measures related to government policy formulation and public participation. The results can also provide empirical evidence to guide environmental strategic choices for heavily polluting enterprises.
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