Journal
BUSINESS STRATEGY AND THE ENVIRONMENT
Volume 29, Issue 1, Pages 39-53Publisher
WILEY
DOI: 10.1002/bse.2349
Keywords
environmental regulation; external knowledge adoption; green absorptive capacity; green innovation; stakeholder engagement; sustainable development
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Although environmental regulations have been considered as important forces of conducting green innovation, how and under what conditions they affect green innovation are still unclear. Drawing from institutional theory, this study used survey data from 237 manufacturing firms in China to investigate how two dimensions of environmental regulations (i.e., command and control regulation and market-based regulation) affect green product innovation and green process innovation. Further, this article examined the mediating role of external knowledge adoption and the moderating role of green absorptive capacity. Our results indicate that both command and control regulation and market-based regulation have positive influences on external knowledge adoption. External knowledge adoption fully mediates these positive relationships. In addition, green absorptive capacity only strengthens the positive impact of market-based regulation on external knowledge adoption. Our study contributes to institutional theory and green innovation literature.
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