Governmental inspection and green innovation: Examining the role of environmental capability and institutional development

As an important method for normalizing firms' environmental behaviors, regulatory inspection has received much attention in both practice and research. However, a consistent conclusion regarding whether and under what conditions regulatory inspection leads to green innovation is lacking. Drawin...

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Bibliographic Details
Published in:Corporate social-responsibility and environmental management 2020-07, Vol.27 (4), p.1774-1785
Main Authors: Qi, Guoyou, Zou, Hailiang, Xie, Xuemei
Format: Article
Language:English
Subjects:
Environmental behavior
environmental inspection
green innovation
Innovations
Inspection
institutional development
Normalizing
regulatory compliance capability
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Summary:As an important method for normalizing firms' environmental behaviors, regulatory inspection has received much attention in both practice and research. However, a consistent conclusion regarding whether and under what conditions regulatory inspection leads to green innovation is lacking. Drawing on the attention‐based view, we argue that the threats or opportunities that top managers perceive from environmental inspection affect the attention they pay to the strategy of green innovation as a response. We hypothesize that firms lacking the capability of regulatory compliance are less likely to invest in green innovation and that the development of promarket institutions diverts managers' attention from reacting to governmental inspection. Using survey data on Chinese industrial firms, we confirm these hypotheses, the theoretical and practical implications of which are discussed.
ISSN:1535-3958
1535-3966
DOI:10.1002/csr.1924