Market-oriented environmental policies, environmental innovation, and firms’ performance: a grounded theory study and framework

Zhongju Liao, Yan Liu and Zhixian Lu

Journal of Environmental Planning and Management, 2023, vol. 66, issue 8, 1794-1811

Abstract: The use of market-oriented environmental policies to achieve a win-win situation for the economy and the environment has become the focus in many countries, and environmental innovation is an important way for firms to achieve dual benefits. However, the overall framework for market-based environmental policies, environmental innovation, and firms’ performance remains unclear. In order to reveal this relationship, this study selected 113 articles from the Zhejiang Daily as the research sample and adopted the grounded theory method to construct the theoretical framework. The results revealed that market-oriented environmental policies that were composed of incentive-based policy tools and constraint-based policy tools had a promotional effect on environmental innovation. Resource redundancy and government action, as internal and external contextual factors, moderated the relationship between market-oriented environmental policies and environmental innovation, and environmental innovation can promote improvements in a firm’s performance. This study provides a useful reference for how governments can better promote the construction of an ecological civilization and how firms can utilize policy opportunities to promote their green development, thus providing empirical evidence for future studies.

Date: 2023
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DOI: 10.1080/09640568.2022.2042219

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