Research Of Relationship Between Proactive Environmental Strategies And Firm Performance

With the worsening of global environment, firms, government, and theacademic circles have paid more and more attention on conflicts betweenbusiness activities and natural environment. Firms utilize the proactiveenvironmental strategies, solving the pollution problems in productiveprocess, and increasing environmental performance. Using the pollutionprevention technologies, they can gain cost advantages, thus improvingfinancial performance, and meanwhile, green reputation can generatecompetitive advantages, which both help firms achieve better economicperformance.Through a meta-analysis of104independent samples reported in54studies, this study tests the institutional theory in the research of proactiveenvironmental strategies and firm performance. This study provides a morecomprehensive framework which links institutional factors, the proactiveenvironment strategy, and firm performance，to explain how institutionalfactors affect the proactive environment strategies and how this strategyinfluences firm performance differently. By use of a meta-analysis, the resultsshow that the findings indicate that the proactive environmental strategypositively affects both environmental performance and economicperformance of firms, and firms utilize this strategy to achieve strongerenvironment performance than economic performance. Further, there areproactive effects of the three institutions on the proactive environmentalstrategies, and the cognitive pillar has the strongest effect, and the regulativeone has the weakest.This study extends institutional theory and enriches existing literatureon the environmental strategy of firms. It also provides important managerial implications. Based on our results, the top managers can utilize theircognition of environment protection to strengthen their environmentstrategy and then improve their performance. They can further balance theeconomic and environment performance through increase the effect of theenvironment strategy on economic performance. Meanwhile, for thegovernment and regulation-maker, they could enhance the regulations inenvironment protection so as to enhance the effect of this factor on firms’environment strategy. In fact, all the three institutional factors playimportant roles in the implement of proactive environmental strategies, soonly pay equal attention to them, can firms gain better performance and thenatural environment be sustainable.