Examining antecedents, consequences, and contingencies of proactive environmental strategy

Abstract

Environmental issues are globally important to organizations in both developed and emerging economies. With this importance increasing organizations have committed to going beyond compliance to adopt more proactive environmental strategies. Drawing from resource-based and resource dependence theories, this study investigates whether firm internationalization and environmental dynamism influence the role of social capital to advance proactive environmental strategy inclusion. Using survey data from 122 Chinese firms we find that a firm's social capital positively relates to proactive environmental strategy inclusion. Parlaying internationalization and environmental dynamism concerns results in a three-way interaction effect between social capital and proactive environmental strategic inclusion. The results strongly suggest that firms facing more dynamic environments can benefit from internationalization to further strengthen the relationship between social capital and proactive environmental strategy inclusion, this moderation is not true for internationalization alone, which is a surprising finding. The outcome findings confirm the preponderance of literature that show proactive environmental strategy inclusion leads to positive firm growth. The results further support managerial and organizational rationale for building organizational social capital capabilities. The social capital provides internal and external relationship resources resulting in more proactive environmental initiatives and ultimately in firm growth.