Unpacking the Mechanisms of Network Embeddedness for Low-Carbon Innovation in Chinese Enterprises: A Dynamic and Cognitive Theory Perspective

Abstract

In the context of low-carbon economies, there is a clarion call for enterprises to change traditional economic management styles in order to achieve optimal gains. Against this background, the mechanism to improve low-carbon innovation capabilities of enterprises has become the holy grail for top management teams. Based on the social network, dynamic ability and upper echelon theories, this study explores the impact of network embeddedness on low-carbon innovation of enterprises and further analyzes the intermediary role of low-carbon dynamic abilities and the moderating role of executives’ low-carbon cognition. To achieve the objectives of this study, a sample of 386 enterprises in China were selected for the study. The results show that (1) Both structural embeddedness and relational embeddedness have significant positive effects on enterprises low-carbon innovation; (2) A low-carbon dynamic ability functions as a partially mediated factor between structural embeddedness and enterprise low-carbon innovation; (3) Low-carbon dynamic capacity plays a complete intermediary role between relational embeddedness and enterprise low-carbon innovation; (4) Executives’ low-carbon cognition moderates the relationship between low-carbon dynamic ability and low carbon innovation of enterprises. That is, the stronger the executives’ low-carbon cognition, the stronger the positive impact of dynamic ability on enterprise low-carbon innovation and vice versa. This study expands research in social network theory and the low-carbon innovation of enterprises. Furthermore, this study provides a solid theoretical basis for enterprises to effectively carry out low-carbon innovation while providing a solid reference for enterprises to improve their low-carbon innovation aspirations.