Abstract
Information processing theory was applied to explore how external information processing and internal information sharing affect a firm's choice of a green strategy. Analyses of two datasets from Chinese manufacturing firms reveal that environment scanning and inter‐functional coordination are important drivers for the adoption of a green strategy. Specifically, firms that engage in extensive environment scanning tend to adopt reactive as opposed to proactive green strategies, whereas firms with effective inter‐functional coordination mechanisms tend to adopt proactive rather than reactive green strategies. An entrepreneurial orientation plays a complementary role in a firm's choice of green strategy. It increases the likelihood that a firm will adopt proactive rather than reactive green strategies, and it further strengthens the influences of environment scanning and inter‐functional coordination. Overall, these findings offer significant implications for firms regarding how and under what conditions they should adopt green strategies.
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