Corporate environmentalism and environmental strategies : the relationship between resources, capabilities, strategies and performance in China's Pearl River Delta

Abstract

Early literatures about corporate environmentalism are criticized to be exploratory and lack rigor. We had developed a comprehensive model that included both the internal and external factors to explain corporate environmentalism of firms with the complement of three distinct perspectives, i.e. literatures of corporate environmentalism, natural-resource-based view of the firm (NRBV) and institutional theory. China, the Pearl River Delta region (PRD) was particularly selected as focus in this study because of the significant influence of her environmental conditions on the entire world due to her fast pace of economic growth, unique institutional structure and her early stage of environmentalism. A combination of qualitative and quantitative research methods had been employed. Qualitatively, 17 manufacturing companies with factories in the PRD were interviewed. The results of the qualitative research were exploratory and provided direction for the survey design in the later stage. Quantitatively, this study empirically tested and validated the proposed model by using the survey data collected from 238 manufacturing firms operated in the PRD by both face-to-face and online questionnaire survey. From the interviews, we obtained an overall picture that the Chinese manufacturers adopted environmental management in operations. The survey results indicated that firms with intangible resources were more likely to build up capabilities, in turn, develop proactive environmental strategies. Eventually, proactive environmental strategies would lead to positive financial and environmental benefits. Theoretically, this study can tackle the problem of lack of cohesion in the research about corporate environmentalism from an interdisciplinary perspective. Besides, by studying the nature of environmental capabilities, we can fill the vacuum with regard to the internal mechanism of applying the NRBV perspective to investigate the environmental management of firms. We also believe that this study can provide more insights for future researchers who include stakeholder influence as a moderator to study green issues. Practically, these findings provide the Chinese corporate executives and their trading partners useful insights into the critical issue of corporate sustainability. Moreover, the Chinese government is advised to spend more rigorous efforts on fine-tuning its existing environmental laws and regulations, improving the infrastructural support as well as resolving the enforcement issues.