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Green innovation to respond to environmental regulation: How external knowledge adoption and green absorptive capacity matter?
Author(s) -
Zhang Jianming,
Liang Gongqian,
Feng Taiwen,
Yuan Chunlin,
Jiang Wenbo
Publication year - 2020
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.2349
Subject(s) - absorptive capacity , business , industrial organization , green innovation , control (management) , environmental regulation , affect (linguistics) , product innovation , product (mathematics) , economics , natural resource economics , management , psychology , geometry , mathematics , communication
Although environmental regulations have been considered as important forces of conducting green innovation, how and under what conditions they affect green innovation are still unclear. Drawing from institutional theory, this study used survey data from 237 manufacturing firms in China to investigate how two dimensions of environmental regulations (i.e., command and control regulation and market‐based regulation) affect green product innovation and green process innovation. Further, this article examined the mediating role of external knowledge adoption and the moderating role of green absorptive capacity. Our results indicate that both command and control regulation and market‐based regulation have positive influences on external knowledge adoption. External knowledge adoption fully mediates these positive relationships. In addition, green absorptive capacity only strengthens the positive impact of market‐based regulation on external knowledge adoption. Our study contributes to institutional theory and green innovation literature.