The Interactive Effect of Internal and External Factors on a Proactive Environmental Strategy and its Influence on a Firm's Performance
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While the literature on the effective management of business and natural environment interfaces is rich and growing, there are still two questions regarding which the literature has yet to reach a definitive conclusion: (1) what is the interactive effect between internal and external drivers on a proactive environmental strategy (PES)? and (2) does a PES influence firm's performance? Drawing on the resource-based view for the internal drivers’ perspective and institutional and legitimacy theories for the external drivers’ perspective, this study suggests that the effect of entrepreneurial orientation on a PES is moderated by the intensity of government regulations and customers’ sensitivity to environmental issues. The authors also examine the relationship between the PES and a firm's performance in terms of sales and profit growth. Implications are discussed regarding the role of a PES in achieving a competitive advantage in the marketplace.
Keywordsproactive environmental strategy entre-preneurial orientation resource-based view legitimacy theory institutional pressure stakeholder theory natural environment
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