Behind eco-innovation: Managerial environmental awareness and external resource acquisition

Accepted Manuscript Behind eco-innovation: Managerial environmental awareness and external resource acquisition Xuerong Peng, Yang Liu PII:

S0959-6526(16)31195-7

DOI:

10.1016/j.jclepro.2016.08.051

Reference:

JCLP 7843

To appear in:

Journal of Cleaner Production

Received Date: 4 September 2015 Revised Date:

21 July 2016

Accepted Date: 11 August 2016

Please cite this article as: Peng X, Liu Y, Behind eco-innovation: Managerial environmental awareness and external resource acquisition, Journal of Cleaner Production (2016), doi: 10.1016/ j.jclepro.2016.08.051. This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.

ACCEPTED MANUSCRIPT Behind Eco-innovation: Managerial Environmental Awareness and External Resource Acquisition Xuerong Penga, Yang Liub,*1 School of Tourism and City Administration, Zhejiang Gongshang University, Hangzhou (310018), China b School of Business Administration, South China University of Technology, Guangzhou (510640), China

a

SC

RI PT

Abstract What drives eco-innovation? This study integrates the managerial cognition perspective and the resource dependency perspective to examine how managerial environmental awareness (i.e., managerial environmental risk awareness and managerial environmental cost-benefit awareness) and external resource acquisition (i.e., from business networks and political networks) affect corporate eco-innovation activities (i.e., eco-management innovation, eco-process innovation, and eco-product innovation), and analyzes their interaction effects. A sample of 144 firms in Zhejiang province in China supports our hypotheses. Key words Eco-innovation, managerial environmental awareness, resource acquisition, managerial cognition theory, resource dependency theory

AC C

EP

TE D

M AN U

Introduction Concerns about ecological innovation (or eco-innovation) have grown significantly in both practice and academia during the past two decades (Dangelico & Pujari, 2010; del Río, Peñasco, & Romero-Jordán, 2016; Diaz-Garcia et al., 2015; Lin et al., 2014; Schiederig et al., 2012). Eco-innovation is an overlapping concept between corporate social responsibility (CSR) and innovation (Dangelico & Pujari, 2010; Wagner, 2010). In this paper, we define eco-innovation as “the creation of novel and competitively priced goods, processes, systems, services, and procedures designed to satisfy human needs and provide a better quality of life for everyone with a whole-life-cycle minimal use of natural resources (materials including energy and surface area) per unit output, and a minimal release of toxic substances” (Reid & Miedzinski, 2008: P2). Due to the importance of eco-innovation for national, industrial, and corporate sustainable development (Mirata & Emtairah, 2005; Porter & Van der Linde, 1995), identifying the factors that drive corporate eco-innovation is a hot topic in multidisciplinary research (Bossle et al., 2016; Diaz-Garcia et al., 2015; Kemp & Oltra, 2011). The literature highlights the importance of institutional, organizational, and individual factors in driving eco-innovation, such as stakeholders pressures from governments (Berrone et al., 2013), customers (Kesidou & Demirel, 2012), and competitors (Park, 2005), strategic motivation (e.g., cost-saving, building image) (Demirel & Kesidou, 2011), and managerial behavior intent (Chou et al., 2012; Cordano & Frieze, 2000). Nevertheless, two important but relatively underexplored questions merit further investigation. First, what is the role of managerial environmental awareness when firms make eco-innovation decisions? Less attention has been paid to managerial cognition as an important driver of eco-innovation (Danihelka, 2004; Gadenne et al., 2009), despite the critical role that managerial interpretation of environmental issues plays in firms’ strategies, as documented by managerial cognition theory (Kaplan, 2011; Stimpert, 1999. del Rio et al. 2010) provide a system view of barriers to eco-innovations. However, how firms respond to the environment depends on how managers interpret that environment. As Corral’s (2003) influential work shows, perceived technological capabilities and perceived economic risk are two important drivers of the willingness of a firm to adopt or develop cleaner technologies. Moreover, Zhang et al. (2013) use a sample of Chinese firms and show that perceived attitudes, social pressure, and behavioral control have important effects on enterprises’ willingness to adopt and develop cleaner production technologies. Second, how does external resource acquisition drive eco-innovation decisions? The literature overemphasizes the role of internal resource endorsement or capability (Aragón-Correa et al., 2008; Chen, 2008; Horbach, 2008; Horbach et al., 2012), but gives little attention to the external complementary assets (with some exceptions: De Marchi, 2012; Horbach et al., 2012; Johnston & Linton, 2000), which can be acquired through social networks (Park & Luo, 2001). However, as the resource dependency theory (Pfeffer & Salancik, 1978; Hillman et al., 2009) predicts, firms can be characterized as open systems; their behavior is constrained and affected by their environment and thus * Corresponding Author: Email: [email protected] 1

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

they need to manage these resource dependencies. Eco-innovation, as a specific behavior for a firm, is no doubt influenced by the firm’s external stakeholders (e.g., business partners and governments). In fact, even if a focal firm has slack internal resources, it might not invest in eco-innovation activities unless it can acquire the additional external resources (e.g., environmental or innovation subsidies) that are required for investment in eco-innovation. Moreover, studies have paid more attention to the role played by stakeholders’ formal institutional pressures (e.g., law and regulation, policy) in driving corporate eco-innovation, while neglecting the informal institutions or social networks that are very important in emerging economies such as China (Peng & Heath, 1996). This can change firms’ environmental legitimacy-seeking motivation and resource bundles needed when implementing eco-innovations. To fill these gaps and advance this line of research, this study focuses on managerial environmental awareness and firms’ external resource acquisition to explore the antecedents of eco-innovation. More specifically, according to managerial cognition theory, we argue that both managerial environmental risk awareness and managerial environmental cost-benefit awareness are positively related to some dimensions of eco-innovation; and following resource dependency theory, we propose that both government resource acquisition and business resource acquisition are positively related to some dimensions of eco-innovation. Furthermore, we integrate resource dependency theory with managerial cognition theory to propose that the interplay of managerial environmental awareness and external resource acquisition will have complex and important effects on eco-innovation. In doing so, we contribute to the literature on the drivers of eco-innovation by integrating the logics of managerial cognition theory and resource dependency theory. ------ Insert Figure 1 here -----Theory and Hypotheses Development Dimensions of eco-innovation and their characteristics The concept of eco-innovation originates from the idea of sustainable development (Hansen et al., 2009; Rennings, 2000). Eco-innovation is usually translated into the triple bottom line (social, environmental, and economic performance) (Elkington, 1998). Following Schumpeter’s (1934) classic work on innovation and Cheng and Shiu’s (2012) intensive review and development of valid measurement of eco-innovation, we mainly focus on three dimensions. First, eco-management innovation mainly refers to organizational capabilities and commitment to implement new forms of eco-innovation management, e.g., pollution prevention schemes, environmental management and auditing system (Cheng & Shiu, 2012; Kemp, 2010). Second, eco-process innovation mainly focuses on the introduction of manufacturing processes to reduce the environmental impact. Third, eco-product innovation captures the improvement of existing products or the introduction of new products to reduce their environmental impact. Eco-innovation has implications for both environmental and innovation/economic performance: the former reflects its CSR characteristics, mainly energy and resource savings and emissions reduction (Zhao & Sun, 2016), while the latter mirrors its innovation attributes (Lee & Min, 2015). Comparing the performance of the three dimensions of eco-innovation, we find that eco-process innovation and eco-product innovation can make a substantial contribution to environmental performance in the long term. However, the contribution of eco-management innovation to environmental performance is not always direct, depending on whether the management guidelines are put into effect (Aravind & Christmann, 2011) and whether the eco-management innovation is able to generate further eco-innovations, such as eco-product and eco-process innovation. More specifically, eco-process innovation can reduce emissions and pollution and save energy, while eco-product innovation can make products less resource intensive, more energy efficient, and more easily recyclable over the whole product life-cycle. Eco-product innovation can also result in the highest innovation performance (e.g., patents, sales revenue from new green products), closely followed by eco-process innovation (e.g., higher energy efficiency). However, we find that the various forms of eco-management innovation (e.g., collecting and sharing environmental information, initiating eco-process and product innovation, and improving the ratio of green R&D spending) cannot directly improve firms’ environmental and economic performance (Cheng & Shiu, 2012). The substantial performance contribution of eco-management innovation depends on its effect on eco-process and eco-product innovation. In fact, the type of eco-management innovation implemented by most manufacturing firms is quite likely to be window dressing (Buysse & Verbeke, 2003). Certainly, we do not deny that eco-management innovation can play a positive role in promoting eco-process and eco-product innovation, as supported by a previous empirical study (Cheng, Yang, & Sheu, 2014), and can bring symbolic benefits to focal firms by improving corporate environmental legitimacy and reputation (Aravind & Christmann, 2011; Bansal & Hunter, 2003). The details of these benefits are discussed in the following sections. 2

ACCEPTED MANUSCRIPT

SC

RI PT

Finally, eco-management innovation (e.g., ISO14001 certification and the introduction of an environmental management system) and eco-product innovation are easily perceived by stakeholders. That is to say, eco-management and eco-product innovation have higher visibility than eco-process innovation. According to the resource dependency theory, the more visible the firm’s conduct, the more likely the firm is to acquire legitimacy and resources from external stakeholders (Chiu & Sharfman, 2011). In the short term, eco-management and eco-product innovation have an advantage over eco-process innovation in acquiring environmental legitimacy (Aravind & Christmann, 2011; Bansal & Hunter, 2003) and resources from external stakeholders. Taking the risk, difficulty, and implementation sequence of the three types of eco-innovation into consideration, it is clear that eco-management innovation is often the first step (Cheng et al., 2014) and is the easiest to realize. Therefore, eco-management innovation is the first choice for focal firms that want to enhance their environmental legitimacy. In the following sections, we will first consider eco-innovation from a managerial cognition perspective and argue that managers’ interpretations of the environment drive different dimensions of eco-innovation. Then, we consider eco-innovation from a resource dependency perspective and argue that the external resources acquired from business and government networks have different influences on the three dimensions of eco-innovation. Finally, we integrate these two lines of arguments and analyze their interaction effects.

AC C

EP

TE D

M AN U

The managerial cognition perspective of eco-innovation Numerous studies have demonstrated the importance and benefits of eco-innovation (Hart, 1995; Kammerer, 2009; Porter & Van der Linde, 1995). To answer Danihelka’s (2004) question of why eco-innovation does not attract enterprises, several studies have examined how the environmental pressure from dominant stakeholders influences corporate eco-innovation. According to this view, eco-innovation can greatly improve a firm’s environmental performance and meet the environmental protection demands of stakeholders such as governments, NGOs, clients, the media, employees, and the community (Berrone et al., 2013; Murillo-Luna et al., 2008; Qi et al., 2010). However, managerial cognition theory (Kaplan, 2011; Porac, Thomas, & Baden-Fuller, 1989) argues that the environment is not purely exogenous, and thus, how decision makers interpret the uncertainties and complexities of the environmental issues they face is crucial for a firm’s response to these issues. For example, Danihelka (2004) argues that subjective factors such as managerial risk perception can influence the decision-making process of cleaner production. Therefore, a cognition-based view of the drivers of eco-innovation is needed. Recent studies have explored the motivation of corporate eco-innovation or environmental behavior from the managerial cognition perspective (Bansal & Roth, 2000; Chou et al., 2012; Cordano et. al, 2010; Kim, 2013). For example, some researchers have examined the influence of managerial attitudes, subjective norms, perceived behavior control, intent on eco-innovation, or environmental behavior through the lens of the planned behavior theory (Cordano et. al, 2010; Corral, 2002, 2003; Zhang et al., 2013). In fact, only individuals in top management teams have thoughts (Stimpert, 1999) and make decisions about a firm’s eco-innovation strategies. Therefore, to understand this managerial decision-making process, it is important to propose a managerial cognition-based view of the drivers of eco-innovation. According to managerial cognition theory (Kaplan, 2011; Porac et al., 1989), executives’ cognitive or mental model influences their attention allocation, their interpretation of the environment, and thus their response to external environmental change, and is thus an important predictor of organizational behavior and firm performance. Thus, we argue that managerial environmental awareness, a specific manifestation of managerial cognition, is one of the main drivers of corporate eco-innovation activities. Following the arguments of Gadenne et al. (2009), we further divide managerial environmental awareness into environmental risk awareness (henceforth, ERA) and environmental cost-benefit awareness (henceforth, ECA). ERA refers to the extent to which managers are aware of the firm’s negative corporate effect on the environment, which reflects managerial environmental morality/ethics. ECA refers to managers’ understanding of the potential cost savings and/or profit increase resulting from better environmental practices, which reflects a profit-seeking motivation. First, we argue that executives with higher environmental awareness pay more attention to environmental issues or problems in the industry. That is to say, environmental issues are more likely to be noticed by executives with stronger environmental awareness. Compared with general innovations, eco-innovation needs more managerial commitment and attention because of its dual positive externality characteristics (Ramus & Steger, 2000). More specifically, a manager with higher ERA will pay much more attention to the adverse effects that his own firm has on the natural environment and to environmental problems in the industry. He will also be more knowledgeable about 3

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

how environmental regulations or laws affect the firm and what “best environmental practices” exist in the industry (Gadenne et al., 2009). Therefore, managers with higher ERA are more likely to focus on eco-innovation with higher environmental performance, and thus are more likely to introduce manufacturing processes, improve existing products, or introduce new products to reduce their environmental impact. In contrast, executives with stronger ECA will pay more attention to the economic returns and potential business opportunities (e.g., green market) of environmental protection and pollution prevention. Thus, they will tend to focus on improving their firm’s’ existing products, or introducing new products that capture these opportunities due to their attributes, i.e. higher visibility, a shorter payback period compared with investment in processes, and means of capturing value (mainly through product market exchange). Second, we hold the view that managers with higher environmental awareness may be more proactive in their interpretation of environmental issues and view them as an opportunity rather than a threat. For example, Sharma (2000) finds that managerial interpretation of environmental issues significantly affects corporate environmental strategies. We believe that executives with stronger environmental awareness may be proactive in their interpretation of environmental problems in two respects. The stronger an executive’s ERA, the higher his perception of environmental institutional pressures from external salient stakeholders. That is, ERA can improve executives’ perception of the importance of environmental protection. For example, Kocabasoglu et al. (2007) find that only those executives who fully recognize the importance of environmental problems and countermeasures include eco-innovations in their strategic agendas and allocate corresponding resources to implement them. The final product and its production process are two different and important aspects contributing to the environmental impact (Cheng et al., 2014). The former involves eco-product innovation and the latter involves eco-process innovation. Therefore, executives with stronger ERA experience higher environmental pressure and tend to allocate resources to eco-innovations that make a substantial contribution to environmental performance, such as eco-process and product innovation. Managers with higher ECA are more able to recognize the underlying business opportunities of environmental issues and to gain insights from their competitors’ best environmental practices, and thus are insensitive to or underestimate the risk and cost of eco-innovation. As Porter and Van der Linde (1995) point out, one reason for an enterprise’s unwillingness to adopt eco-innovation is that it is difficult for the enterprise to recognize the potential benefits, especially with a lack of experience in solving environmental problems through innovation. Managers tend to believe that pollution control is very expensive, and thus underestimate the importance of considering environmental problems. In addition, as the benefits of eco-innovation activities are always implicit, they tend not to attract the attention of corporate decision makers (Li, 2014). Managers with higher ECA thus prefer eco-innovations with higher innovation performance and lower investment, and will tend to renew their products to capture opportunities stemming from environmental issues. Third, we believe that executives with higher environmental awareness are likely to choose proactive environmental strategies (prevention of pollution in the production process, not end-of-pipe control) (Liu, Guo, & Chi, 2015; Murillo-Luna, Garces-Ayerbe, & Rivera-Torres, 2011), which have “the potential to cut emissions well below the levels required by law, reducing the firm’s compliance and liability costs,” as argued by Hart and Ahuja (1996: 31), in response to the external environmental challenge from dominant stakeholders. Specifically, we argue that executives with higher ERA tend to adopt or launch eco-process and eco-product innovations to deal with environmental pollution problems. According to Buysse and Verbeke (2003), eco-management innovation is often, in reality, an expedient and short-term oriented initiative to deal with the environmental challenge from dominant stakeholders. In other words, executives with higher ERA are not content to achieve the “bottom line” through eco-management innovation, and are likely to adopt more significant environmental initiatives, i.e. eco-process and eco-product innovation, to reduce environmental risk. We also argue that executives with higher ECA are more likely to respond to environmental challenges with eco-product innovation instead of eco-process and eco-management innovation. The rationale for this argument is that eco-process innovation is more technology and capital intensive, and the investment is difficult to payback through product market exchange with an environmental premium; it is also hard for eco-management innovations to meet the higher economic return requirement. With the increasing development of globe environmental awareness, bottom-line oriented environmental initiatives, such as eco-management innovation, are widely used and are gradually become a resource with decreasing marginal returns and insurance-like features (Flammer, 2013); hence, they no longer give firms a competitive advantage or substantial economic return. Thus, we propose the following hypotheses: H1a: Managerial environmental risk awareness (ERA) is positively related to eco-process innovation and eco-product innovation. 4

ACCEPTED MANUSCRIPT H1b: Managerial environmental cost-benefit awareness (ECA) is positively related to eco-product innovation.

AC C

EP

TE D

M AN U

SC

RI PT

The resource dependency perspective of eco-innovation The process of eco-innovation is systematic and complex (De Marchi, 2012) and requires external cooperation and internal cross-functional collaboration (Pujari, 2006) because eco-innovation demands diversified knowledge and life cycle analyses of environmental influences (Kemp & Oltra, 2011). As mentioned above, although internal resource endorsement or capability is well recognized, external resource dependency is largely ignored. Thus, we propose a resource dependency perspective of eco-innovation. In an open system, stakeholders expect the focal firm to protect the environment. More specifically, local governments generally hope that all local firms will introduce new organizational forms, manufacturing processes, and products to reduce their environmental impact. Business partners such as clients, suppliers, and competitors expect the focal firm to conduct eco-innovations for the purpose of reducing their relative costs and building a better business competitive environment. To motivate the focal firm to do what the external stakeholders want, they usually endorse the provision of resources to the focal firm under the condition that it will meet the stakeholders’ expectations, such as environmental protection and pollution prevention. However, there is a power imbalance and information asymmetry between focal firms and external stakeholders, which may result in a focal firm making decisions about eco-innovation based on its own interests instead of the stakeholders’ expected environmental performance. According to classical works, the resources that a firm acquires from its social network include technology, information, and financial resources (Uzzi, 1997). Because the social networks of firms usually include political ties and business ties (Luo et al., 2012; Park & Luo, 2001; Sheng et al., 2011), we further divide external resource acquisition into government resource acquisition (GRA) and business resource acquisition (BRA). GRA relates to the resources obtained from ties with government institutions or officers, while BRA reflects the resources acquired from ties with business partners such as clients, suppliers, and competitors. On the one side, the external resources acquired from government networks include financial support, green purchase orders, and industrial policy orientation information. Financial support may reduce the cost of eco-innovation, thus giving the focal firm cost advantages (Standifird & Marshall, 2000). Government green procurement insures the premium on green products and reduces the market uncertainty associated with eco-product innovation, thus improving the motivation of focal firms to engage in eco-product innovation to make money (Kim, 2013). In addition, environmental policy information may lower the institutional risks or uncertainties of eco-process innovation and promote eco-process innovation in focal firms to gain first-mover advantage (Porter & Van der Linde, 1995). One the other side, the external resources acquired from business networks include technology support, green product purchase commitments, green demand and management trend information, and green supply chains. Green technology supports from clients, suppliers, and strategic cooperating partners benefit focal firms by solving eco-innovation technology problems. Green demand commitments make eco-products more appealing and enhance managerial awareness of the environmental benefit. Information on green trends obtained from business networks reduces uncertainty and the risk of investing in R&D for eco-product innovation, and provides guidance for focal firms on green certification and pushes them to introduce new environmental management systems or institutions that are more visible to stakeholders. Finally, green supply chains can guarantee the environmental raw materials or new environmental producing technology for focal firms’ eco-innovation activities. However, the mechanisms by which GRA and BRA affect different dimensions of eco-innovation may vary. First, we propose that external resources acquired from local governments are positively related to eco-management innovation and eco-product innovation. Local governments endorse finance, technology, and information resources to those organizations that satisfy their environmental expectations or demands through activities such as eco-innovation. The government hopes that the focal firms will invest the resources endorsed by them in environmental initiatives such as eco-process and eco-product innovation, which can make a tremendous contribution to environmental performance (Zailani, Eltayeb, Hsu, & Tan, 2012). However, the enterprises want to allocate the resources acquired from government to the projects that can achieve maximum economic returns and that have the minimum environmental performance requirements for receiving the government’s resources. In addition, in a transitional economy such as China’s with imperfect monitoring of institutions, the government has no perfect approach for monitoring focal firms’ actual use of government resources and mainly do so based on more visible criteria. For example, governments can easily observe the 5

ACCEPTED MANUSCRIPT

EP

TE D

M AN U

SC

RI PT

introduction of new management forms of eco-innovation (e.g. ISO14001 certification, EMS) and new environmentally friendly products in the exchange market. The information asymmetry problem and institutional flaws in China leave space for focal firms’ opportunism and speculation, which is different from in Western countries (Liu et al., 2015). Thus, focal firms tend to act in their own interests, not those of society in general, and allocate government-endorsed resources to the environmental activities with the highest visibility and economic returns or the lowest cost, i.e., eco-product and eco-management innovation. Second, we propose that the external resources acquired from business networks are positively related to eco-management and eco-product innovation according to the level of dependence between focal firms and their business partners. More specifically, in a business network, the clients are the focal firm’s most powerful stakeholders, while the focal firms have more power than the suppliers. Clients and customers increasingly require focal firms to provide more environmental products with higher energy efficiency and less natural resources consumption, and to shoulder more environmental responsibility (e.g., by considering employees’ health by minimizing their exposure to pollution) in the manufacturing process (Huang, Hu, Liu, Yu, & Yu, 2016; Zailani et al., 2012). Otherwise, they will “vote with their feet” by turning to other suppliers with greater environmental responsibility. In these conditions, focal firms will supply more environmental products to keep their customers, and adopt other visible initiatives to ensure they receive the environmental certifications (e.g., ISO4001 and OHSAS18001) required by clients, especially foreign clients. For suppliers, the opposite is true. Focal firms often require suppliers to offer more environmental materials to improve the competitiveness of their final products. Of course, some environmental machinery suppliers hope that firms will adopt new environmental production technologies. However, upgrading manufacturing processes is very costly for focal firms; it is usually only implemented as a long-term strategy, and only if the executives think it is necessary, not in response to the demands of the suppliers. Finally, competitors affect the focal firms through market competition. Focal firms will imitate the visible environmental behavior (i.e. eco-product and eco-management innovation) of their competitors to maintain their competitive advantage in the market (Dai, Cantor, & Montabon, 2015; Park, 2005; Yalabik & Fairchild, 2011). If a focal firm knows that its competitors or peer collaborators are introducing a new environmental product or have received environmental certification, it will experience competitive pressure and adopt countermeasures to retain its competiveness. Nevertheless, if a competitor adopts a new environmental manufacturing technology, it does not mean that the focal firm will follow it. The reasons are very simple. First, eco-process innovation is not as visible as eco-product or eco-management innovation, and is more difficult for a firm to perceive and imitate. Second, eco-process innovation does not always lead to product competiveness. On the contrary, the large capital cost of eco-process innovation usually increases the cost of the product and will lower the firm’s competitive advantage if customers are not greatly concerned about the environmental pollution from the manufacturing process. Thus, we propose the following hypotheses: H2a: The external resources acquired from local governments are positively related to eco-management innovation and eco-product innovation. H2b: The external resources acquired from business networks are positively related to to eco-management innovation and eco-product innovation.

AC C

The interplay of managerial environmental awareness and external resource acquisition The underlying logic of the managerial cognitive view of eco-innovation suggests that the way in which executives interpret the environment—their awareness of environmental risk and cost-benefit—allows them to pay more attention to environment-related issues or problems in the industry, identify more opportunities in the environment, respond more quickly, and prefer more proactive environmental solutions such as eco-innovation activities. The resource dependency perspective of eco-innovation proposes that the response of a focal firm to the environmental requirements of dominant stakeholders depends on the degree to which the firm depends on the stakeholders. That is, whether the conditional resources endorsed by stakeholders will prompt the focal firm to adopt desirable environmental behavior depends on the power and controlling capabilities of the stakeholders. Among these stakeholders, the government, clients, and competitors have more power than suppliers in influencing the behavior of focal firms (Park, 2005; Yalabik & Fairchild, 2011). These two logics interact with each other because in recent years, inter-organizational networks and relationship building have become critical for the success and survival of organizations around the world (Park & Luo, 2001). Social networks can provide the focal firm with opportunities for shared learning, technical knowledge transfer, resource exchange, and organizational legitimacy acquisition. The firm is embedded in different social networks, which contribute to the realization of the strategic choices (i.e., innovation) made by executives (Simsek et al., 2003; Hambrick, 2007). We thus explore 6

ACCEPTED MANUSCRIPT the interplay of managerial environmental awareness and external resource acquisition on firms’ eco-innovation activities. The interaction effect of GRA and managerial environmental awareness

AC C

EP

TE D

M AN U

SC

RI PT

First, we argue that the interplay of GRA and ERA is negatively related to eco-management innovation, but is not significantly positively related to eco-process and eco-product innovation. As mentioned above, executives with higher ERA pay much more attention to their own firms’ adverse effects on the natural environment and environmental problems in the industry, and they are more knowledgeable about how environmental regulations or laws affect their firms. Thus, they tend to focus first on eco-process innovation, which has the highest environmental performance for focal firms; second, on eco-product innovation, which contributes to environmental performance mainly by using fewer resources during the manufacturing period; and third, on eco-management innovation. However, as we previously argued, it is in focal firms’ self-interest to use the resources acquired from government for eco-management innovation and eco-product innovation, both of which are more easily observed than eco-product innovation by stakeholders embedded in the political network, to satisfy external stakeholders’ environmental requirements. Taken together, we argue that the interaction effect of GRA and ERA on eco-management is conflicting rather than synergistic. The underlying logic of the argument is that executives with higher ERA think that eco-process and eco-product innovation will be a better choice than eco-management innovation, while executives with the opportunistic intent and space for governmental resource acquisition will prefer eco-management and eco-product innovation to eco-process innovation. It is not difficult to see that eco-management innovation can satisfy executives’ governmental resource acquisition demands, because eco-management innovation is more easily perceived by government and requires lower investment, but it cannot meet the environmental requirements of executives who have higher ERA. In other words, executives with higher environmental awareness will have a weak opportunistic intent to use eco-management innovation to acquire governmental resources. Thus, the interplay of GRA and ERA is negatively related to eco-management innovation. However, when there is no opportunism in executives’ decision-making, either of other two measures (eco-process and eco-product innovation) can accomplish executives’ environmental performance expectation in reducing environmental risk and external resource acquisition. Therefore, the interaction effects of external resources acquired from local governments and managerial risk awareness on eco-process or eco-product innovation will be positive but not significant. Second, we argue that the interplay of GRA and ECA is positively related to eco-product innovation, but not to eco-management and eco-process innovation. As mentioned, executives with higher ECA will tend to renew corporate products to capture opportunities that underline environmental issues. The interaction of ECA with executives’ opportunism in using eco-management and eco-product innovation to capture governmental resources is synergistic rather than conflicting, because ECA is a reflection of economic orientation that is harmonious with the opportunism underlying GRA. Thus, Eco-products have higher visibility and environmental and innovation performance, and lower investment than eco-process innovation, and thus can satisfy the demand for economic returns of executives with higher ECA, and the opportunistic motivation of executives’ GRA. In this situation, eco-product innovation will to be the best choice for those executives who have the two harmonious demands mentioned above. In contrast, eco-process or eco-management innovation can meet only one of these two appeals, so the interplay of external resources acquired from local governments and managerial cost-benefit awareness will not be positively associated with eco-management and eco-process innovation. Thus, we propose the following hypotheses: H3a: The interplay of external resources acquired from local governments and managerial risk awareness is negatively related to eco-management innovation. H3b: The interplay of external resources acquired from local government and managerial cost-benefit awareness is positively related to eco-product innovation. The interaction effect of BRA and managerial environmental awareness First, we argue that the interplay between BRA and ERA is negatively related to eco-product innovation. As mentioned, managers with higher ERA pay much more attention to their own firms’ adverse effects on the natural environment and environmental problems in the industry, and they are more knowledgeable about how environmental regulations or laws affect their firms. Thus, they will focus more on eco-processes and eco-product innovation with the highest environmental performance than on eco-management innovation. 7

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

In addition, business partners want focal firms to choose the environmental initiatives with the highest environmental performance to satisfy their environmental demands. However, the focal firms will select the environmental measures (i.e. eco-management and eco-product innovation) with the highest economic return or lowest investment, as long as they can reach the minimum environmental performance required or carried by their business partners, such as clients and competitors. As previously argued, we believe that ERA mirrors an ethical or value orientation, while the line taken by focal firms to acquire business partners’ resources is more value or opportunism orientated. That is, the relationship between ERA and opportunism in acquiring resources from business partners based on self-interest is conflicting rather than consistent. Therefore, the environmental initiatives that can reconcile these two opposite orientations must perform well in terms of both economic returns with lower investment and environmental performance with higher visibility. We find that only eco-product innovation meets the above criteria. Thus, the interplay between BRA and ERA is negatively related to eco-product innovation; in other words, only BRA or ERA can drive eco-product innovation. Second, we propose that the interplay between BRA and ECA is negatively related to eco-management innovation but positively related to eco-process innovation. As mentioned above, for self-interest and increased power status in the business network, focal firms will mainly choose eco-product or eco-management innovation to satisfy their business partners’ environmental requirements and thus acquire their resources. Furthermore, executives with higher ECA will prefer eco-product innovation because it can bring higher economic returns than eco-management innovation, needs a lower level of investment, and is more easily observed by business partners than eco-process innovation. Likewise, ECA reflects a value orientation, and the eco-innovation measures adopted by focal firms to meet the environmental requirements that allow them to obtain resources demonstrate a corporate opportunistic logic or self-interested orientation. Thus, the mechanism by which ECA and BAR affect eco-innovation is complementary. If firms can get resources from business partners to support eco-innovation, it will change executives’ cost-benefit cognition of different sorts of eco-innovation; e.g., the acquisition of resources from business partners can reduce the cost of eco-process innovation by focal firms. In this case, there will be an increased preference for eco-process innovation as it will be regarded as a means of bringing benefit to the focal firm. That is, the complement of external business resources to focal firms changes the cost-benefit attribute of eco-process innovation. Furthermore, this interaction of BRA and ECA may change the order of preference among the three categories of eco-innovation. Eco-process innovation will be the first choice for focal firms, because the cost of the investment is shared with the business partners, and the benefits (e.g., energy efficiency) mainly belong to the focal firms. On the contrary, some kinds of eco-innovation, e.g. eco-management innovation, which can only meet the requirements of ECA or the opportunistic orientation underlying BRA, will be less important when ECA interacts with BRA. Thus, we propose the following hypotheses: H4a: The interplay of external resources acquired from business networks and managerial risk awareness is negatively related to eco-product innovation. H4b: The interplay of external resources acquired from business networks and managerial cost-benefit awareness is negatively related to eco-management innovation, but positively related to eco-process innovation. Methods Sample and data collection We tested these hypotheses using a sample of firms that provide tangible goods (manufacturing and tangible service industries) in China. China’s transitional economy has less developed formal (or market-based) institutions, yet has achieved rapid growth for years. Because of the institutional voids, corporate eco-innovation behavior varies largely. As the economy grows, environmental issues catch the attention of the government and the public. The debate between environmental protection and economic growth is increasingly fierce. Thus, China’s rich context is suitable for testing our propositions. We prepared our questionnaire in English and then translated it into Chinese. Back translation by three competent experts was conducted to avoid potential bias and ensure validity (Churchill, 1979). We paid particular attention to the issues raised by potential social desirability under Asian culture. Further, a pilot test by twelve executives from six firms in Zhejiang Province was conducted and five items were revised due to misunderstandings (Churchill, 1979). Finally, we divided the questionnaire into two parts. The first part contained questions regarding firms’ basic information (i.e., firm age, size, ownership, industry, and R&D intensity) and eco-innovation. The other part contained the same questions related to firms’ basic information (i.e., firm age, firm size), and questions on managerial environmental awareness and resource acquisition. 8

ACCEPTED MANUSCRIPT

M AN U

SC

RI PT

At the end of 2013, we collected our data in the Yangtze River Delta, mainly includes Zhejiang, Shanghai, and Jiangsu Province, and one of the most developed regions in China. We randomly selected 450 firms as the sample frame from a list of firms compiled by the Department of Science and Technology in Zhejiang, Shanghai, and Jiangsu provinces. We selected these firms because they all produce tangible services or tangible products, and firms in more tangible sectors are more likely to engage in eco-innovation practices (Uhlaner et al., 2012). We hired 10 Ph.D. students whose majors were in related subjects to contact two executives in each firm to complete our questionnaires. The two respondents were randomly asked to complete one of the two parts of the questionnaire. We defined executives as CEOs and managers of environmental protection, R&D, marketing, or operations departments. After two months on-site survey, 231 pairs of questionnaires were collected. We then deleted 87 questionnaires with missing values, leaving 144 effective pairs of questionnaires with a participation rate of 32 percent. Of the responding firms, 71.5 percent were in tangible manufactory industries, while 28.5 percent were in tangible service sectors (e.g., retail and repair, catering and hospitality); 60.8 percent were private owned firms, 20.1 percent were state-owned firms, and 19.1 percent were classified as “other”, such as foreign firms or firms from Hong Kong; almost half were established within 10 years (47.2 percent), and had 300 employees (50.0 percent). There was no significant difference in the age and size of the responding and non-responding firms, which suggests that non-response bias was not a problem in our survey. Moreover, there was no difference between the age and size of each firm reported by the two respondents, indicating high inter-rater reliability. We also called back 10 randomly selected respondents and asked them to respond to 5 randomly selected questions each. The high correlation between their two responses indicated high test-retest reliability.

AC C

EP

TE D

Measures Multi-item scales were used to operationalize our main constructs. We operationalized the key constructs using reflective measures. A 7-point Likert scale from 1 “strongly disagree” to 7 “strongly agree” was used to measure the items. ------ Insert Table 1 here -----Eco-innovation There are two methods for measuring eco-innovation. The first measures eco-innovation from an input perspective, which generally uses R&D spending and environmental fees as the proxy for eco-innovation; the second measures eco-innovation from an output perspective and generally uses environmental patents, new environmental product sales, or eco-efficiency improvements as an eco-innovation proxy. We decomposed eco-innovation into eco-management innovation (EMI), eco-process innovation (EPsI), and eco-product innovation (EPtI), and measured them using 11 items adapted from Cheng and Shiu (2012) and Cheng et al. (2014). The scale captured the extent to which firms implement management, process, and product innovation aimed at both reducing harm to the environment and improving firms’ economic performance. China is at an early stage of environmentalism (Child & Tsai, 2005) and these items are key issues faced by Chinese firms that could well capture the firms’ emphasis on developing new eco-products through new technologies, innovatively updating manufacturing processes, and innovatively using novel management systems to reduce environmental impact. We asked respondents to rate their firm relative to their major competitors over the last three years, as the relative measures are not subject to product category- or industry-specific effects (e.g., Cheng et al., 2014; Zhou et al., 2005). Managerial Environmental Awareness. Based on the work of Gadenne et al. (2009), we decomposed managerial environmental awareness into ERA and ECA. The former reflects the extent to which executives’ perception of firm behavior affects the natural environment, while the latter reflects the extent to which executives perceives the potential cost-saving and income increasing benefits of implementing environmental initiatives or behavior such as eco-innovation. ERA and ECA emphasize the different motivations of executives when making environmental strategic decisions. Managerial ERA reflects an ethical motivation (value driven), while managerial ECA reflects a self-interest motivation (cost driven). We measured managerial ERA with four items, such as “to what extent do you agree with the statement that executives at your firm pay much attention to adverse impact of your firm’s behavior on the natural environment?” We measured managerial ECA with four items, such as “to what extent do you agree with the statement that executives at your firm think that adopting environmental initiatives can bring many benefits to your firm?” External Resource Acquisition Based on the definition of and literature on managerial ties or guanxi (Acquaah, 2007; Li & Zhang, 2007; Li et al., 2014; Park & Luo, 2001; Peng & Luo, 2000), we divided external resource acquisition 9

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

into two variables: GRA and BRA. GRA reflects the resources acquired from political ties, while BRA reflects resources acquired from business ties. We measured government resource acquisition with three general questions; for example, “to what extent has your firm acquired resources (i.e. finance, technology, information) from government agents, such as (1) state-owned financial institution (e.g. state banks), (2) regulatory organizations (e.g. environmental bureau), and (3) industrial bureaus?” We measured business resource acquisition with three general questions, such as “to what extent has your firm acquired resources (i.e. finance, technology, information) from your business partners, such as: (1) suppliers, (2) clients, and (3) competitors.” The respondents were asked to evaluate the questions on a 7-point scale, ranging from strongly agree to strongly disagree. Controls To account for alternative explanations, we considered several control variables: firm age, firm size, R&D spending, industry, and firm ownership. First, firm age was measured as the natural logarithm of the number of years the firm had been in operation. Second, we measured firm size using the natural logarithm of the number of full-time employees. Third, R&D spending is the natural logarithm of the firm’s R&D spending, for which the unit of measurement is ten thousand Chinese yuan. Fourth, we used a dummy variable to measure industry effects. Because half of the sample was from the manufacturing industry, we coded the manufacturing industry as 1 and all other tangible service firms 0 (Peng and Luo, 2000). Finally, firm ownership was measured using two dummy variables: state-owned enterprises (1=yes, 0=no) and privately-owned enterprises (1=yes, 0=no). Reliability, validity, and common method variance We took three steps to ensure data reliability. As noted earlier, the inter-rater reliability and test-retest reliability increased our confidence in the data. We then assessed the reliability of multi-item constructs with Cronbach’s alpha, as shown in Table 1. All of the values were greater than the recommended 0.70, thus supporting the reliability of our data. We took several steps to ensure data validity. We first conducted a confirmatory factor analysis. As shown in Table 1, all of the path coefficients were statistically significant and all items loadings were greater than 0.778, thus supporting convergent validity. We then assessed discriminant validity using a chi-square difference test. The results showing significant differences between each pair of multi-item constructs indicate good discriminant validity. We also compared the average variance extracted for each variable with the overall shared variance (see Table 2), and the results confirmed the discriminant validity of our measurements. To control for potential common method variance, we followed the recommendation of Podsakoff et al. (2003) in terms of both procedural methods and statistical techniques. First, we collected independent and dependent data from different respondents in one firm. Second, we assured the respondents that their answers were confidential. Third, we used Harman’s one-factor test to check for potential common method variance. The results indicated that no single general factor accounted for the majority of covariance, thus suggesting that common method variance was not a problem. Fourth, we used the method suggested by Podsakoff et al. (2003) to control for the effects of an unmeasured latent methods factor. Together, these findings indicate that common method variance was not an issue in this study. Results The means, standard deviations, and correlations are presented in Table 2. We used OLS regression to test the hypothesized main effects and moderating effects. Before creating the interaction terms, all of the independent variables and moderators were mean-centered to reduce the probability of multicollinearity. We examined the variance inflation factors for the regression models. The values associated with each coefficient ranged from 2 to 2.5 and none exceeded 10, indicating no serious problems with multicollinearity. ------ Insert Table 2 here -----The regression results are presented in Table 3. H1a proposes that managerial ERA is positively related to eco-process innovation and eco-product innovation. This hypothesis is supported by the results of Model 7 and Model 12, which indicate that managerial ERA is significantly positively related to ecological process innovation (β=0.202, p＜0.05) and ecological product innovation (β=0.207, p＜ 0.05). H1b proposes that managerial ECA is positively related to eco-product innovation. This hypothesis is supported by the significant positive relationship between managerial ECA and ecological product innovation in Model 12 (β=0.248, p＜0.05). ------ Insert Table 3 here ----------- Insert Figure 2 here ------

10

ACCEPTED MANUSCRIPT

M AN U

SC

RI PT

H2a proposes that the external resources acquired from local governments are positively related to eco-management innovation and eco-product innovation. This hypothesis is supported by the results of Model 3 and Model 12, which indicate that external resources acquired from local governments are significantly positively related to ecological management innovation (β=0.297, p ＜ 0.001) and ecological product innovation (β=0.254, p＜0.001). H2b proposes that the external resources acquired from business partners are positively related to eco-product and eco-management innovation. The results of Model 12 and Model 3 indicate that external resources acquired from business partners are significantly positively related to ecological product innovation (β=0.213, p＜0.05),while positively related to ecological product innovation but not significantly (β=0.132, p＜0.154), thus partially supporting H2b. H3a proposes that the interplay of external resources acquired from local governments and ERA is negatively related to eco-management innovation. This hypothesis is supported by the results of Model 5 and Model 15, which indicate that the interaction of government resource acquisition and managerial ERA is negatively and significantly related to ecological management innovation (β=-0.217, p＜0.05). H3b proposes that the interplay of external resources acquired from local governments and managerial cost-benefit awareness is positively related to eco-product innovation. However, the results of Model 15 indicate that the interaction of government resource acquisition and managerial ECA on ecological product innovation is positive but not significant (β=0.182, p＜0.1). Thus, H3b is not supported. H4a proposes that the interplay of external resources acquired from business networks and managerial risk awareness is negatively related to eco-product innovation. This hypothesis is supported by the results of Model 15, which indicate that the interaction of business resource acquisition and managerial ERA on eco-product innovation is negative and significant (β=-0.230, p＜0.05). H4b proposes that the interplay of external resources acquired from business networks and managerial cost-benefit awareness is negatively related to eco-management innovation, but positively related to eco-process innovation. The results of Model 5 and Model 10 suggest that the interaction of business resource acquisition and managerial ECA has a significant positive effect on ecological product innovation (β=0.259, p＜0.01), but a significant negative effect on ecological management innovation (β=-0.237, p＜0.05). Thus, H4b is supported. To facilitate the interpretation, we all of the significant interactive effects are plotted in Figures 3-7. ------ Insert Figure 3 to 7 here ------

AC C

EP

TE D

Discussion and Conclusions The way in which managerial environmental awareness and external resource acquisition affect corporate eco-innovation activities remains debatable. To the best of our knowledge, this study represents the first attempt to inform this debate by providing an empirical snapshot of how variations in managerial perceptions of environmental risk and cost-benefit, and resource acquisition from business partners and governments, affect eco-management, eco-process, and eco-product innovation activities. The major contribution of this study is that it enriches the literature on the drivers of eco-innovation by incorporating both a managerial cognition perspective and a resource dependency perspective. First, the there is a consensus in the literature that the external environment is an important driver of firms’ eco-innovation activities (Cai & Zhou, 2014). Our results shed some new light on this view by arguing that it is not the environment itself, but how executives interpret the environment that matters. Specifically, Corral (2003) and Zhang et al. (2013) argue that perceived economic risks, perceived attitudes, social pressure, and behavioral control have important effects on enterprises’ willingness to adopt and develop cleaner production technologies. Extending this line of research, we propose that the way executives interpret the environment—specifically, managerial environmental risk and cost-benefit awareness—allows them to pay more attention to environmental issues or problems in the industry, identify more business opportunities in environmental problems, and respond more quickly and more proactively through implementing environmental solutions such as eco-innovation activities. These findings also respond to Danihelka’s (2004) call for greater focus on the subjective factors of cleaner production by illustrating how managers’ interpretation of the environment influences their attention allocation to different dimensions of eco-innovation. The second main contribution is the application of resource dependency theory to explain why external resource acquisition is an important driver of firms’ eco-innovation activities. The literature suggests that external resources are important for eco-innovation (De Marchi, 2012; Horbach et al., 2012; Johnston & Linton, 2000). For example, Ghisetti, Marzucchi, and Montresor (2015) propose an open eco-innovation theory, and Bossle et al. (2016) systematically review 35 empirical studies and propose that regulatory pressure and external cooperation are two important drivers of the adoption of 11

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

eco-innovation. We extend this line of research by proposing that the acquisition of critical resources from local governments and business partners allows managers to pay more attention to improving the firm’s eco-innovation capability to satisfy stakeholders’ expectations. These resources increase the mutual dependency between the focal organization and other parties in its environment. The findings support our resource dependency hypothesis and provide a new perspective from which to explore the relationship between the environment and eco-innovation activities. Moreover, we find interesting results indicating that resource acquisition from governments and business partners is not significantly related to firms’ eco-process innovation. As we mentioned earlier, there is an opportunistic space between managerial desertion and the expectations of the government and business partners, who assume that the focal firm will invest the conditional resources into the types of eco-innovation that can provide the greatest improvement to environmental performance in the locality where the focal firm is embedded. However, focal firms tend to invest these resources into activities that bring the greatest economic returns while also achieving the bottom line requirements of the resources endorsement of the government and business partners. We believe that it is important for future research to explore how the opportunistic behavior of these different partners shapes eco-innovation activities. Third, we propose that managerial environmental awareness interacts with external resource acquisition to drive a firm’s eco-innovation activities, thus extending the literature on the drivers of eco-innovation by integrating managerial cognition theory and resource dependency theory. A recent body of literature focuses on the market-pull, technology-push, and regulatory pull/push divers of eco-innovation (Ghisetti et al., 2015). We extend this line of research by proposing that the way managers interpret the environment and the way a firm’s dependency on external resources interact with each other also drive eco-innovation. Finally, the majority of studies on the antecedents of eco-innovation are conducted in developed countries (Kemp & Oltra, 2011). Following Cai and Zhou (2014), we selected firms located in an emerging country as our sample, thus providing a more precise understanding of the antecedents of corporate eco-innovation in emerging markets, where we are facing serious environmental problems caused by extensive industrialization. This study also has several practical implications. First, our empirical findings suggest that managers should consider where they focus their attention: how their interpretation of the environment influences their attention allocation to different eco-innovation activities. Second, our findings indicate that managers should be aware of the important role of external resource acquisition when the firm lacks resources. They should also recognize the importance of eco-innovation in dealing with environmental risks, building their firms’ environmental capability, and capitalizing on the first-mover advantage. Our study has limitations that should be addressed in future research. First, our sample only included firms in China’s Yangtze River Delta. Replications of our model with firms in different provinces in China are needed for more confident generalization. Second, we used perceptual scales adapted from Cheng and Shiu (2012) and Cheng et al. (2014) to measure eco-innovation, and future research could operationalize this construct using other measures. Third, although comparing resource acquisition from business ties and government ties could be interesting, future research should consider the heterogeneity of ties with business partners such as clients, suppliers, and competitors. In conclusion, as a first step toward a better understanding of how managerial environmental awareness and external resource acquisition play a key role in driving eco-innovation activities in emerging markets, this study barely scratches the surface of this innovative mechanism. Our analysis supports the view that managerial environmental awareness of risks and cost benefits stimulates a firm’s eco-management, eco-process, and eco-product innovation. Moreover, our finding of an interaction between managerial environmental awareness and external resource acquisition has important implications for firms’ eco-innovation activities. Given the pervasiveness of eco-innovation and the paucity of scholarly research on the drivers of eco-innovation, it is imperative that attention is devoted to this challenging yet relevant and important research agenda. Acknowledgements This work is supported by the Project of Zhejiang Provincial Natural Science Foundation (No. LQ15G020001), MOE (Ministry of Education in China) Project of Humanities and Social Sciences (No.15YJC630098), and National Natural Science Foundation of China (No. 71502065, 71502160 & 71471042). The authors are grateful for comments and suggestions provided by subject editor Frank Boons and three anonymous reviewers for their helpful comments.

12

ACCEPTED MANUSCRIPT References 1. 2. 3.

RI PT

4.

Acquaah, M. 2007. Managerial social capital, strategic orientation, and organizational performance in an emerging economy. Strategic Management Journal, 28(12): 1235-1255. Ajzen, I. 1991. The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2): 179-211. Aragón-Correa, J. A., Hurtado-Torres, N., Sharma, S., & Garcia-Morales, V. J. 2008. Environmental strategy and performance in small firms: A resource-based perspective. Journal of Environmental Management, 86(1): 88-103. Aravind, D., & Christmann, P. 2011. Decoupling of Standard Implementation from Certification: Does Quality of ISO 14001 Implementation Affect Facilities' Environmental Performance? Business Ethics Quarterly, 21(1): 73-102. Bansal, P., & Roth, K. 2000. Why companies go green: A model of ecological responsiveness. Academy of Management Journal, 43(4): 717-736. Bansal, P., & Hunter, T. 2003. Strategic explanations for the early adoption of ISO 14001. Journal of Business Ethics, 46(3): 289-299. Berrone, P., Fosfuri, A., Gelabert, L., & Gomez-Mejia, L. R. 2013. Necessity as the mother of ‘green’ inventions: Institutional pressures and environmental innovations. Strategic Management Journal, 34(8): 891-909. Bossle, M.B., de Barcellos, M.D., Vieira, L.M. and Sauvée, L., 2016. The drivers for adoption of eco-innovation. Journal of Cleaner Production, 113: 861-872. Buysse, K., & Verbeke, A. 2003. Proactive environmental strategies: A stakeholder management perspective. Strategic Management Journal, 24(5): 453-470. Cai, W.G. and Zhou, X.L., 2014. On the drivers of eco-innovation: empirical evidence from China. Journal of Cleaner Production, 79: 239-248. Chen, Y. S. 2008. The driver of green innovation and green image - green core competence. Journal of Business Ethics, 81(3): 531-543. Cheng, C. C., & Shiu, E. C. 2012. Validation of a proposed instrument for measuring eco-innovation: An implementation perspective. Technovation, 32(6): 329-344. Cheng, C. C. J., Yang, C., & Sheu, C. 2014. The link between eco-innovation and business performance: a Taiwanese industry context. Journal of Cleaner Production, 64: 81-90. Child, J. and Tsai, T., 2005. The Dynamic Between Firms’ Environmental Strategies and Institutional Constraints in Emerging Economies: Evidence from China and Taiwan. Journal of Management Studies, 42(1), pp.95-125. Chiu, S. C., & Sharfman, M. 2011. Legitimacy, Visibility, and the Antecedents of Corporate Social Performance: An Investigation of the Instrumental Perspective. Journal of Management, 37(6): 1558-1585. Chou, C. J., Chen, K. S., & Wang, Y. Y. 2012. Green practices in the restaurant industry from an innovation adoption perspective: Evidence from Taiwan. International Journal of Hospitality Management, 31(3): 703-711. Churchill, G. A., 1979. A paradigm for developing better measures of marketing constructs. Journal of Marketing Research, 16(1): 64-73. Cordano, M., & Frieze, I. H. 2000. Pollution reduction preferences of U.S. environmental managers: Applying Ajzen's theory of planned behavior. Academy of Management Journal, 43(4): 627-641. Cordano, M., Marshall, R. S., & Silverman, M. 2010. How do Small and Medium Enterprises Go "Green"? A Study of Environmental Management Programs in the US Wine Industry. Journal of Business Ethics, 92(3): 463-478. Corral, C. M. 2002. Environmental policy and technological innovation: why do firms adopt or reject new technologies?. UK: Edward Elgar Pub. Corral, C. M. 2003. Sustainable production and consumption systems—cooperation for change: assessing and simulating the willingness of the firm to adopt/develop cleaner technologies. The case of the In-Bond industry in northern Mexico. Journal of Cleaner Production, 11(4), 411-426. Dai, J., Cantor, D. E., & Montabon, F. L. 2015. How Environmental Management Competitive Pressure Affects a Focal Firm's Environmental Innovation Activities: A Green Supply Chain Perspective. Journal of Business Logistics, 36(3): 242-259. Danihelka, P. 2004. Subjective factors of Cleaner Production—parallel to risk perception?. Journal of Cleaner Production, 12(6), 581-584. Dangelico, R. M., & Pujari, D. 2010. Mainstreaming green product innovation: why and how companies integrate environmental sustainability. Journal of Business Ethics, 95(3): 471-486.

5. 6.

10. 11. 12. 13. 14.

15.

16.

17.

AC C

18.

TE D

9.

EP

8.

M AN U

SC

7.

19.

20.

21.

22.

23. 24.

13

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

25. De Marchi, V. 2012. Environmental innovation and R&D cooperation: Empirical evidence from Spanish manufacturing firms. Research Policy, 41(3): 614-623. 26. del Rio, P., Carrillo-Hermosilla, J., & Konnola, T. 2010. Policy strategies to promote eco-innovation. Journal of Industrial Ecology, 14(4): 541-557. 27. del Río, P., Peñasco, C., & Romero-Jordán, D. 2016. What drives eco-innovators? A critical review of the empirical literature based on econometric methods. Journal of Cleaner Production, 112(Part4): 2158-2170. 28. Demirel, P., & Kesidou, E. 2011. Stimulating different types of eco-innovation in the UK: Government policies and firm motivations. Ecological Economics, 70(8): 1546-1557. 29. Diaz-Garcia, C., Gonzalez-Moreno, A., & Saez-Martinez, F. J. 2015. Eco-innovation: insights from a literature review. Innovation-Management Policy & Practice, 17(1): 6-23. 30. Drees, J. M., & Heugens, P. P. 2013. Synthesizing and Extending Resource Dependence Theory A Meta-Analysis. Journal of Management, 39(6):1666-1698. 31. Elkington, J. 1998. Partnerships from cannibals with forks: The triple bottom line of 21st‐ century business. Environmental Quality Management, 8(1): 37-51. 32. Finkelstein, S., & Hambrick, D. C. 1990. Top-management-team tenure and organizational outcomes: The moderating role of managerial discretion. Administrative Science Quarterly, 35(3): 484-503. 33. Flammer, C. 2013. Corporate social responsibility and shareholder reaction: the environmental awareness of investors. Academy of Management Journal, 56(3): 758-781. 34. Gadenne, D. L., Kennedy, J., & McKeiver, C. 2009. An empirical study of environmental awareness and practices in SMEs. Journal of Business Ethics, 84(1): 45-63. 35. Ghisetti, C., Marzucchi, A., & Montresor, S. 2015. The open eco-innovation mode. An empirical investigation of eleven European countries. Research Policy, 44(5), 1080-1093. 36. Hambrick, D. C. 2007. Upper echelons theory: An update. Academy of Management Review, 32(2): 334-343. 37. Hansen, E. G., Grosse-Dunker, F., & Reichwald, R. 2009. Sustainability innovation cube—A framework to evaluate sustainability-oriented innovations. International Journal of Innovation Management, 13(4): 683-713. 38. Hart, S. L., & Ahuja, G. 1996. Does it pay to be green? An empirical examination of the relationship between emission reduction and firm performance. Business Strategy and the Environment, 5(1): 30-37. 39. Hillman, A.J., Withers, M.C. & Collins, B.J., 2009. Resource dependence theory: A review. Journal of Management. 35(6):1404-1427. 40. Horbach, J. 2008. Determinants of environmental innovation - New evidence from German panel data sources. Research Policy, 37(1): 163-173. 41. Horbach, J., Rammer, C., & Rennings, K. 2012. Determinants of eco-innovations by type of environmental impact - The role of regulatory push/pull, technology push and market pull. Ecological Economics, 78(6): 112–122. 42. Huang, X. X., Hu, Z. P., Liu, C. S., Yu, D. J., & Yu, L. F. 2016. The relationships between regulatory and customer pressure, green organizational responses, and green innovation performance. Journal of Cleaner Production, 112: 3423-3433. 43. Kammerer, D. 2009. The effects of customer benefit and regulation on environmental product innovation. Empirical evidence from appliance manufacturers in Germany. Ecological Economics, 68(8-9): 2285-2295. 44. Kaplan, S. 2011. Research in Cognition and Strategy: Reflections on Two Decades of Progress and a Look to the Future. Journal of Management Studies, 48(3): 665-695. 45. Johnston, D. A., & Linton, J. D. 2000. Social networks and the implementation of environmental technology. IEEE Transactions on engineering management, 47(4): 465-477. 46. Kemp, R. 2010. Eco-innovation: Definition, Measurement and Open Research Issues. Economia Politica, 27(3): 397-420. 47. Kemp, R., & Oltra, V. 2011. Research insights and challenges on eco-innovation dynamics. Industry and Innovation, 18(3): 249-253. 48. Kesidou, E., & Demirel, P. 2012. On the drivers of eco-innovations: Empirical evidence from the UK. Research Policy, 41(5): 862-870. 49. Kim, E. H. 2013. Deregulation and differentiation: Incumbent investment in green technologies. Strategic Management Journal, 34(10): 1162–1185. 50. Kocabasoglu, C., Prahinski, C., & Klassen, R. D. 2007. Linking forward and reverse supply chain investments: the role of business uncertainty. Journal of Operations Management, 25(6): 1141-1160. 14

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

51. Lee, K., & Min, B. 2015. Green R&D for eco-innovation and its impact on carbon emissions and firm performance. Journal of Cleaner Production, 108 (Part A): 534–542. 52. Li, H., & Zhang, Y. 2007. The role of managers' political networking and functional experience in new venture performance: Evidence from China's transition economy. Strategic Management Journal, 28(8): 791-804. 53. Li, J. T., & Tang, Y. 2010. CEO hubris and firm risk taking in China: the moderating role of managerial discretion. Academy of Management Journal, 53(1): 45-68. 54. Li, Y. 2014. Environmental innovation practices and performance: moderating effect of resource commitment. Journal of Cleaner Production, 66(3), 450-458. 55. Li, Y., Chen, H., Liu, Y., & Peng, M. W. 2014. Managerial ties, organizational learning, and opportunity capture: A social capital perspective. Asia Pacific Journal of Management. 31(1): 271-291. 56. Lin, H., Zeng, S. X., Ma, H. Y., Qi, G. Y., & Tam, V. W. Y. 2014. Can political capital drive corporate green innovation? Lessons from China. Journal of Cleaner Production, 64 (1): 63-72. 57. Liu, Y., Guo, J. Z., & Chi, N. 2015. The antecedents and performance consequences of proactive environmental strategy: A meta-analytic review of national contingency. Management and Organization Review, 11(3): 521-557. 58. Luo, Y. D., Huang, Y., & Wang, S. L. 2012. Guanxi and Organizational Performance: A Meta-Analysis. Management and Organization Review, 8(1): 139-172. 59. Mirata, M., & Emtairah, T. 2005. Industrial symbiosis networks and the contribution to environmental innovation - The case of the Landskrona industrial symbiosis programme. Journal of Cleaner Production, 13(10-11): 993-1002. 60. Murillo-Luna, J. L., Garcés-Ayerbe, C., & Rivera-Torres, P. 2008. Why do patterns of environmental response differ? A stakeholders' pressure approach. Strategic Management Journal, 29(11): 1225-1240. 61. Murillo-Luna, J. L., Garces-Ayerbe, C., & Rivera-Torres, P. 2011. Barriers to the adoption of proactive environmental strategies. Journal of Cleaner Production, 19(13): 1417-1425. 62. Park, S. H., & Luo, Y. D. 2001. Guanxi and organizational dynamics: Organizational networking in Chinese firms. Strategic Management Journal, 22(5): 455-477. 63. Park, Y. S. 2005. A study on the determinants of environmental innovation in Korean energy intensive industry. International Review of Public Administration, 9(2): 89-101. 64. Peng, M. W., & Heath, P. S. 1996. The growth of the firm in planned economies in transition: Institutions, organizations, and strategic choice. Academy of Management Review, 21(2): 492-528. 65. Peng, M. W., & Luo, Y. 2000. Managerial ties and firm performance in a transition economy: The nature of a micro-macro link. Academy of Management Journal. 43(3): 486-501. 66. Pfeffer, J. and Salancik, G.R., 2003. The external control of organizations: A resource dependence perspective. New York: Stanford University Press. 67. Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. 2003. Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5): 879-903. 68. Porac, J. F., Thomas, H., & Baden-Fuller, C. 1989. Competitive groups as cognitive communities: the case of Scottish knitwear manufacturers. Journal of Management Studies, 26(4): 397-416. 69. Porter, M. E., & Van der Linde, C. 1995. Green and competitive: Ending the stalemate. Harvard Business Review, 73(5): 120-134. 70. Pujari, D. 2006. Eco-innovation and new product development: Understanding the influences on market performance. Technovation, 26(1): 76-85. 71. Qi, G. Y., Shen, L. Y., Zeng, S. X., & Jorge, O. J. 2010. The drivers for contractors' green innovation: an industry perspective. Journal of Cleaner Production, 18(14): 1358-1365. 72. Ramus, C. A., & Steger, U. 2000. The roles of supervisory support behaviors and environmental policy in employee "ecoinitiatives" at leading-edge European companies. Academy of Management Journal, 43(4): 605-626. 73. Reid, A. & M. Miedzinski. 2008. Eco-Innovation. Final Report for Sectoral Innovation Watch (2008) www.technopolis-group.com 74. Rennings, K. 2000. Redefining innovation - eco-innovation research and the contribution from ecological economics. Ecological Economics, 32(2): 319-332. 75. Schiederig, T., Tietze, F., & Herstatt, C. 2012. Green innovation in technology and innovation management - an exploratory literature review. R & D Management, 42(2): 180-192. 76. Schumpeter, J. A. 1934. The theory of economic development: An inquiry into profits, capital, credit, interest and the business cycle. Cambridge, MA: Harvard University Press. 15

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

77. Sharma, S. 2000. Managerial interpretations and organizational context as predictors of corporate choice of environmental strategy. Academy of Management Journal, 43(4): 681-697. 78. Sheng, S. B., Zhou, K. Z., & Li, J. J. 2011. The effects of business and political ties on firm performance: Evidence from China. Journal of Marketing, 75(1): 1-15. 79. Simsek, Z., Lubatkin, M. H., & Floyd, S. W. 2003. Inter-firm networks and entrepreneurial behavior: A structural embeddedness perspective. Journal of Management, 29(3): 427-442. 80. Smith, K. G., & Hitt, M. A. (Eds.). 2005. Great minds in management: The process of theory development. USA: Oxford University Press. 81. Standifird, S. S., & Marshall, R. S. 2000. The transaction cost advantage of guanxi-based business practices. Journal of World Business, 35(1): 21-42. 82. Stimpert, J. L. 1999. Managerial and organizational cognition: Theory, methods and research. Academy of Management Review, 24(2): 360-362. 83. Uhlaner, L. M., Berent-Braun, M. M., Jeurissen, R. J. M., & de Wit, G. 2012. Beyond Size: Predicting Engagement in Environmental Management Practices of Dutch SMEs. Journal of Business Ethics, 109(4): 411-429. 84. Uzzi, B. 1997. Social structure and competition in interfirm networks: The paradox of embeddedness. Administrative Science Quarterly. 42(1): 35-67. 85. Wagner, M. 2010. Corporate Social Performance and Innovation with High Social Benefits: A Quantitative Analysis. Journal of Business Ethics, 94(4): 581-594. 86. Yalabik, B., & Fairchild, R. J. 2011. Customer, regulatory, and competitive pressure as drivers of environmental innovation. International Journal of Production Economics, 131(2): 519-527. 87. Zailani, S. H. M., Eltayeb, T. K., Hsu, C. C., & Tan, K. C. 2012. The impact of external institutional drivers and internal strategy on environmental performance. International Journal of Operations & Production Management, 32(5-6): 721-745. 88. Zhang, B., Yang, S., & Bi, J. 2013. Enterprises' willingness to adopt/develop cleaner production technologies: an empirical study in Changshu, China. Journal of Cleaner Production, 40(2): 62-70. 89. Zhao, X. & Sun, B. 2016. The influence of Chinese environmental regulation on corporation innovation and competitiveness. Journal of Cleaner Production, 112(Part 2): 1528–1536. 90. Zhou, K. Z., Yim, C. K., & Tse, D. K. 2005. The Effects of Strategic Orientations on Technologyand Market-Based Breakthrough Innovations. Journal of Marketing, 4(69): 42-60.

16

ACCEPTED MANUSCRIPT

Appendix

TE D

External Resource Acquisition • Government resource acquisition • Business resource acquisition

M AN U

SC

RI PT

Managerial Environmental Awareness • Environmental risk awareness • Environmental cost-benefit awareness

AC C

EP

Figure 1. Conceptual Framework

17

Eco-innovation • Eco-management innovation • Eco-process innovation • Eco-product innovation

ACCEPTED MANUSCRIPT

Environmental Risk Awareness (EAR)

RI PT

Managerial Environmental Awareness

Environmental Cost-benefit Awareness (ECA)

.202*

GRA*ERA

-0.217*

BRA*ECA

TE D

Government Resource Acquisition (GRA)

-0.237*

EP

Business Resource Acquisition (BRA)

Figure 2. Result of regression

AC C

External Resource Acquisition

0.182+

M AN U

The Interplay Of Managerial Environmental Awareness And External Resource Acquisition BRA*ERA

SC

.207*

GRA*ECA

18

Eco-innovation Eco-management innovation

.248*

Eco-process innovation

0.297** 0.259** -0.230* 0.254** 0.213*

Eco-product innovation

RI PT

ACCEPTED MANUSCRIPT

TE D

M AN U

SC

Figure 3. Interaction effects between ERA and GRA on eco-management innovation

AC C

EP

Figure 4. Interaction effects between ECA and BRA on eco-management innovation

Figure 5. Interaction effects between ECA and BRA on eco-process innovation

19 / 24

RI PT

ACCEPTED MANUSCRIPT

TE D

M AN U

SC

Figure 6. Interaction effects between ECA and GRA on eco-product innovation

EP

Figure 7. Interaction effects between ERA and BRA on eco-product innovation

Table 1. Measurement scales

Item Loading Alpha Rate your firm relative to your major competitors over the last three years on the extent to which… Our firm often innovatively uses novel systems to 0.834 0.911 manage eco-innovation Our firm often innovatively collects and shares 0.857 information on eco-innovation trends Our firm often actively engages in eco-innovation 0.789 activities Our firm often invests a high ratio of R&D in 0.730 eco-innovation Eco-process innovation Rate your firm relative to your major competitors over the last three years on the extent to which… （AVE=0.7018） Our firm often innovatively updates manufacturing 0.849 0.913 processes to protect against contamination Our firm often innovatively updates manufacturing 0.843 processes to meet standards of environmental law 0.821 Our firm often innovatively introduces new technologies or equipment into manufacturing processes to save energy

AC C

Construct Eco-management innovation （AVE=0.6464）

20 / 24

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

Eco-product innovation Rate your firm relative to your major competitors over the last three years on the extent to which… （AVE=0.6475） Our firm often places emphasis on developing new 0.812 0.908 eco-products through new technologies to simplify their construction and packaging Our firm often places emphasis on developing new 0.802 eco-products through new technologies to easily recycle their components Our firm often places emphasis on developing new 0.826 eco-products through new technologies to easily decompose their materials Our firm often places emphasis on developing new 0.778 eco-products through new technologies to use as little energy as possible Environmental Risk To what extent do you agree or disagree with the following statements: Awareness Top management team pays much attention to adverse 0.801 0.925 impacts of our firm’s behavior on the natural （AVE=0.7021） environment. Top management team is very clear about how 0.882 environmental legislation is relevant to our business Top management team is very clear about what represents 0.855 “best environmental practice” in our industry Top management team pays much attention to 0.811 environmental issues Environmental To what extent do you agree or disagree with the following statements: cost-benefit Awareness Top management team thinks that adopting 0.819 0.940 environmental initiatives can bring many benefits to our （AVE=0.7314） firm Top management team thinks that adopting 0.886 environmental initiatives can improve sales revenue Top management team thinks that adopting 0.892 environmental initiatives can reduce costs Top management team thinks that adopting 0.821 environmental initiatives can improve production efficiency To what extent has your firm acquired resources (i.e. finance, technology, Business resource acquisition information) from your business partners, such as: Suppliers 0.892 0.862 （AVE=0.7076） Clients 0.896 Competitors 0.724 Government resource To what extent has your firm acquired resources (i.e. finance, technology, acquisition information) from government agents, such as: State-owned financial institution (e.g. state banks) 0.841 0.902 （AVE=0.7686）

Regulatory organizations (e.g. environmental bureau) Industrial bureaus

21 / 24

0.898 0.890

ACCEPTED MANUSCRIPT

Variable

Mean

SD

1

2

3

4

5

b

RI PT

Table 2. Descriptive statistics and correlation matrixa 6

7

8

9

10

11

EMI

4.073

1.243

0.804

2

EPsI

4.690

1.267

.623**

0.838

3

EPtI

4.271

1.297

.645**

.607**

0.805

4

ERA

5.073

1.216

.267**

.353**

.419**

0.838

5

ECA

4.634

1.487

.283**

.360**

.450**

.698**

6

GRA

4.442

1.217

.362**

0.143†

.344**

.197*

0.136

0.877

7

BRA

4.574

1.148

.239**

.175*

.302**

.232**

.229**

.567** 0.841

8

Manufacturing (dummy)

0.715

0.453

.180*

.259**

0.156†

0.063

0.114

-0.125

-0.096

9

SOE(dummy)

0.201

0.402

0.072

0.005

-0.055

0.098

0.013

.231**

0.121

-.412**

10 POE(dummy)

0.618

0.488

-0.115

-0.114

0.032

-0.062

0.028

-0.11

-0.076

.201*

-.639**

11 Firm age(log)

2.366

0.940

-0.023

-0.044

-0.051

-0.065

-.181*

0.079

0.043

0.002

0.142†

-.212*

12 Firm size(log)

6.088

2.000

0.163†

.249**

0.012

-0.082

-0.121

0.026

0.035

0.018

0.162†

-.311**

.540**

5.140

3.554

.196*

.313**

.197*

0.12

0.111

-0.003

0.097

.188*

0.12

-0.185†

.392**

a

b

0.855

M AN U

TE D

13 R&D spending (log)

SC

1

12

.652**

AC C

EP

Notes: N =144; The square root of average variance extracted (AVE) for each construct is along the diagonal (in bold) * Correlation is significant at the .05 level (2-tailed) ** Correlation is significant at the .01 level (2-tailed) EMI=Eco-management innovation; EPsI=Eco-process innovation; EPtI=Eco-product innovation; ERA=Environmental risk awareness; ECA=Environmental cost-benefit awareness; GRA=Government resource acquisition; BRA=Business resource acquisition

22 / 24

ACCEPTED MANUSCRIPT

Table 3. Results of regression analysis DV= Eco-product innovation Model 11 Model 12 Model 13 Model 14 Model 15 0.09 0.016 .092 0.023 -0.009 -0.099 -0.106 -.151 -0.155 -0.207 0.001 0.025 .006 0.021 -0.019 0.042 0.071 .005 0.039 0.07 -0.035 -0.034 -.058 -0.051 -0.082 0.082 0.043 .097 0.065 0.043 .207* 0.138 0.158 .248* .233* .261** 0.254** .234* 0.143 0.213* 0.154 0.16 0.016 .182† -.230* 0.001 0.032 0.129 .362 0.195 0.261 -0.024 0.061 .131 0.115 0.154 0.097 .099 0.066 0.066 5.676** 5.840** 4.132* 2.142† 0.572 1.886† 1.929† 2.428** 2.426*** 2.133 2.133 2.149 2.151 2.408

M AN U

SC

RI PT

DV= Eco-process innovation Model 7 Model 8 Model 9 Model 10 .188† 0.240* .186† .219* -0.069 -.056 -0.048 -0.018 -.213† -.234* -.212† -.237* -.234* -.221* -.220* -0.156 .278* 0.274* .284* 0.212 0.095 .103 0.085 0.043 .202* .231* .202* 0.074 0.08 0.057 -.069 -0.102 -0.139 .008 -0.063 -0.056 0.086 0.045 0.073 .259** 0.228 0.273 .483 0.285 0.351 0.184 0.215 .233 0.213 0.257 0.044 .005 0.012 0.067 3.087† .308 0.847 2.462† 5.133*** 4.776*** 3.875** 3.979*** 3.711*** 2.133 2.133 2.149 2.151 2.408 Model 6 .229* -0.069 -.235* -.232* .276* 0.113

TE D

Manufacturing (dummy) SOE(dummy) POE(dummy) Firm age(log) Firm size(log) R&D spending (log) ERA ECA GRA BRA GRA*ERA GRA*ECA BRA*ERA BRA*ECA R2 Adjusted R2 ∆ R2 F Change F VIF-max

DV= Eco-management innovation Model 1 Model 2 Model 3 Model 4 Model 5 0.298** 0.291** 0.281** 0.285** 0.240* 0.151 0.154 .091 0.094 0.061 -0.122 -0.113 -.119 -0.118 -0.094 -0.032 -0.043 -.076 -0.084 -0.166 0.024 0.025 .012 0.012 0.123 0.026 0.026 .053 0.057 0.087 0.087 0.016 0.028 -0.024 -0.037 -0.037 0.297** 0.295** 0.348** .132 0.131 0.091 -.217* 0.02 0.03 -.237* 0.108 0.116 .453 0.207 0.313 0.057 0.047 .205 0.127 0.213 0.008 .097 0.091 0.106 0.458 6.217** 5.706** 3.718** 2.105† 1.677 3.292** 2.606** 3.126*** 2.133 2.133 2.149 2.151 2.408

AC C

EP

Notes: N =144; ***P<.001; **P<.01; *P<.05; †P<.10; EMI=Eco-management innovation; EPsI=Eco-process innovation; EPtI=Eco-product innovation; ERA=Environmental risk awareness; ECA=Environmental cost-benefit awareness; GRA=Government resource acquisition; BRA=Business resource acquisition

23 / 24

ACCEPTED MANUSCRIPT

AC C

EP

TE D

M AN U

SC

RI PT

Highlights 1. The impacts of managerial environmental awareness on eco-innovation are examined. 2. The impacts of managerial environmental risk and cost-benefit awareness are examined separately. 3. The impacts of external resource acquisition on eco-innovation are examined. 4. The impacts of business and government resource acquisition are examined separately. 5. The interplay of managerial environmental awareness and external resource acquisition are examined.

24 / 24