When do Firms and Environmental Activists Cooperate?: Evidence from the US Electric Utilities Sector

Abstract

We examine the role of heterogenous organizational attributes of firms and environmental activists in determining the likelihood of them cooperating. We argue that insofar as heterogeneity in their attributes results in greater symmetry in their capabilities and objectives or induces either or both parties to make costly concessions during negotiations in anticipation of potential benefits, cooperation is more likely. A statistical analysis of firm-activist interactions in regulatory proceedings within the US electric utilities sector from 1990-2015 supports our predictions. We find that when firms demonstrated greater commitment to the environmental values, or when activists had a larger resource base, cooperation was more likely. In contrast, when a firm’s environmental practices were more objectionable, firms were economically reliant to a greater degree on a stakeholder adversely affected by outcomes of cooperation, or the activist was more ideologically inclined to engage in contentious tactics, cooperation was less likely. Our findings contribute new insights on contingencies underlying cooperation between firms and environmental activists in the context of regulatory institutions.