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No D/723: Can institutional forces create competitive advantage? An empirical examination of environmental innovation

Pascual Berrone (), Liliana Gelabert, Andrea Fosfuri and Luis R. Gomez-Mejia
Additional contact information
Pascual Berrone: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Liliana Gelabert: Universidad Carlos III
Andrea Fosfuri: Universidad Carlos III
Luis R. Gomez-Mejia: Arizona State University

Abstract: We examine institutional pressures as antecedents of environmental innovation. Drawing on institutional theory and a resource-based view of the firm, we argue that regulatory and normative forces influence companies' propensity to innovate in environment-related projects. Furthermore, we suggest that this relationship is contingent on the availability and specificity of the companies' resources. These relationships were tested using environmental patents and citations of 340 publicly-traded companies from polluting industries in the U.S. Results suggest that institutional pressures can be a source of competitive advantage, and regulatory forces are becoming more strongly associated with environmental innovations as the intensity of companies' R&D activities increase.

Keywords: environmental innovation; institutional theory; resource-based view

27 pages, November 21, 2007

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