How Environmental Management Competitive Pressure Affects a Focal Firm's Environmental Innovation Activities: A Green Supply Chain Perspective

Abstract

Recently, environmental management offers firms a source of competitive advantage in the marketplace. The development of environmental innovations is critical to the success of today's firms. Drawing on the Schumpeterian perspective of competition, this research examines how the perception of rival firms' green success influences a firm to pursue and produce environmental innovation through its green supply chain integration activities. Using survey data from 230 firms, a conceptual model is developed and tested using structural equation modeling. We find that the firms in our sample do perceive pressure from their competitors' success in environmental management activities, and thus take supply chain action to pursue integration activities. By differentiating incremental and radical environmental innovation, this study also reveals the role of three dimensions of green supply chain integration (internal, supplier, and customer integration of green product development) on incremental and radical environmental innovation separately. Specifically, findings suggest that green supply chain integration has a positive impact on developing incremental environmental innovation, while only customer integration has a significant positive impact on developing radical environmental innovation.