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Environmental Strategy, Institutional Force, and Innovation Capability: A Managerial Cognition Perspective

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Abstract

Despite the rising interest in environmental strategies, few studies have examined how managerial cognition of such strategies influences actual innovation capability development. Taking a managerial cognition perspective, this study investigates how managers’ perceptions of institutional pressures relate to their focus on proactive environmental strategy, which in turn affects firms’ realized innovation capability. The findings from a primary survey and three secondary datasets of publicly listed companies in China reveal that managers’ perceived business and social pressures are positively associated with their focus on proactive environmental strategy, which consequently fosters innovation capability development. Moreover, state ownership and government administrative control weaken the impact of managerial focus on proactive environmental strategy on innovation capability. These findings have important implications for how managerial cognition supports environmental strategy and organizational capability building under the influence of institutional pressures and government intervention.

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Notes

  1. http://www.gov.cn/zhengce/2014-04/25/content_2666434.htm.

  2. http://www.hyi.org.cn/go/index.php.

  3. https://www.chinadialogue.net/blog/9715-Six-important-environmental-cases-/en.

  4. http://www.pfi.org.cn/.

  5. According to the Derwent Innovation Index, most patent applications of Chinese listed firms are filed within China, so we did not include patent applications in foreign countries.

  6. We would like to thank a reviewer for suggesting this insight.

  7. http://news.cnpc.com.cn/system/2008/04/07/001167500.shtml.

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Acknowledgements

The authors thank Section Editor Professor Cory Searcy and two anonymous reviewers for their insightful comments and guidance. This study was financially supported by the National Natural Science Foundation of China (No. 71472074, 71402154), Natural Science Foundation of Guangdong Province in China (No. 2015A030401041), and the Fundamental Research Funds for the Central Universities (No. 15JNQM015).

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Authors and Affiliations

  1. Marketing Department, School of Management, Jinan University, Guangzhou, China

    Defeng Yang

  2. Faculty of Business and Economics, The University of Hong Kong, Pokfulam, Hong Kong

    Aric Xu Wang & Kevin Zheng Zhou

  3. School of Management, Xiamen University, Xiamen, China

    Wei Jiang

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  1. Defeng Yang
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Correspondence to Wei Jiang.

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Appendix: Measurement Scales

Appendix: Measurement Scales

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Yang, D., Wang, A.X., Zhou, K.Z. et al. Environmental Strategy, Institutional Force, and Innovation Capability: A Managerial Cognition Perspective. J Bus Ethics 159, 1147–1161 (2019). https://doi.org/10.1007/s10551-018-3830-5

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