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Does Market Competition Dampen Environmental Performance? Evidence from China

Jing-Lin Duanmu, Maoliang Bu and Russell Pittman ()

MPRA Paper from University Library of Munich, Germany

Abstract: Departing from the extant literature which assumes that firms pursue strong environmental performance as a differentiation strategy, we analyse the general relationship between firms’ competitive strategy and their response to heightened market competition. We find that, using a large sample of Chinese manufacturing firms between 2000 and 2005, intensified market competition has an overall negative impact on firms’ environmental performance. The negative impact is exacerbated in firms adopting a cost-leadership strategy, but attenuated in those adopting a differentiation strategy. The results emphasize the importance of including an examination of the particular competitive strategies chosen by firms in seeking to understand the impact of intensified market competition.

Keywords: Market competition; environmental performance; China; corporate social responsibility; cost leadership; differentiation; market concentration (search for similar items in EconPapers)
JEL-codes: L11 L13 L21 L25 M14 M31 Q52 Q56 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cna, nep-com, nep-env, nep-res and nep-tra
Date: 2018-04-18
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