Corporate Environmentalism: Antecedents and Influence of Industry Type

Abstract

How does a business firm manage its relationship with the natural environment? What are the factors that influence the choice of such strategies? Does industry type matter? The authors introduce and operationalize the concept of corporate environmentalism in an effort to answer these questions. Using stakeholder theory, the authors identify four important antecedents to corporate environmentalism, namely, public concern, regulatory forces, competitive advantage, and top management commitment. The authors then use a political–economic framework to develop testable hypotheses. To test the hypotheses, the authors perform multigroup path analysis on data gathered from more than 240 firms. They find that corporate environmentalism is related to all hypothesized antecedents and that industry type moderates several of those relationships. In the high environmental impact sector, public concern has the greatest impact on corporate environmentalism, followed by regulatory forces. In the moderate environmental impact sector, competitive advantage has the greatest impact on corporate environmentalism, followed by regulatory forces. There are strong direct and mediating influences from top management commitment, which is the antecedent with the greatest impact on both industry groups. The influences of regulatory forces, public concern, and competitive advantage are all significantly mediated by top management commitment and moderated by industry type. The empirical findings and the ensuing discussion will be of interest to managers and public policy officials.