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When companies improve the sustainability of the natural environment: A study of large U.S. companies
Author(s) -
De Mendonca Taryn,
Zhou Yan
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.2398
Subject(s) - sustainability , business , dominance (genetics) , sample (material) , competitive advantage , government (linguistics) , sustainability organizations , industrial organization , marketing , ecology , biochemistry , chemistry , linguistics , philosophy , chromatography , biology , gene
In light of the call for companies to abandon current approaches to environmental management, this study adds to the environmental strategy literature and uses the evidence of competitive dynamics among companies to identify a mechanism by which companies invest in proactive environmental strategies and thereby improve the sustainability of the natural environment. An examination utilizing fixed effects regressions on a sample of large U.S.‐based companies reveal that even after controlling the number, environmental and financial performance of leading (environmental) companies, laggard (environmental) companies are more likely to invest in proactive environmental strategies when their leading peers display higher sustainability orientations. Neither the expectation of government regulation nor social movement pressure was found to be influential in this relationship. Therefore, the future dominance of companies' investments in the sustainability of the natural environment will be driven by companies themselves as long as competitive advantages are expected.