Too little or too much of good things? The horizontal S-curve hypothesis of green business strategy on firm performance

Han Lin, Lu Chen, Mingchuan Yu, Chao Li, Joseph Lampel and Wan Jiang

Technological Forecasting and Social Change, 2021, vol. 172, issue C

Abstract: Building on the tenets of the combination of institutional and resource-based views, this study aims to shed light on how a firm could benefit from implementing a strategic stance toward exploiting green-related opportunities. Our model integrates ‘too-much-of-a-good-thing’ (TMGT) and ‘too-little-of-a-good-thing’ (TLGT) effects to formulate green business strategy and how this, in turn, influences substantive performance. The association is empirically manifested in a horizontal S-curve, which at first shows that firm performance declines with initially going green, follows by a positive relationship between increasing green business strategy and firm performance, then declines at very high levels of green pursuit. Additionally, the S-curve relationship between green business strategy and firm performance is positively moderated by internal absorptive capacity and external public environmental concern. These findings offer relevant information for a finer-grained interpretation of how and when it pays to be green.

Keywords: Green business strategy; Absorptive capacity; Public environmental concern; Firm performance; Horizontal S-Curve (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:172:y:2021:i:c:s0040162521004832

DOI: 10.1016/j.techfore.2021.121051

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