Environmental sustainability is a growing global concern. Environmental management systems (EMS) could be an effective strategic tool to help firms deal with their sustainable development. However, whether EMS certification pays off financially and how it takes effect can be debated. Thus far, these questions remain largely under‐researched. In particular, the effects of EMS certification on financial performance are inconclusive, and the reasons explaining the effects are underdeveloped. This study aims to enrich the current research by exploring the mediating and moderating roles from the perspective of cost‐efficiency trade‐offs to reveal how EMS certification affects financial performance. Applying a PROCESS procedure analysis and causal mediation analysis to a sample of 1,751 Chinese listed manufacturing firms from 2008 to 2016, this study shows that the effect of EMS certification on firms' financial performance is insignificant because their operating costs burden increases while their marketing efficiency and managerial efficiency improve. For the first time, this study demonstrates the moderating role of industry peer learning, as the mediating effects decrease with the growth of industry peer learning.

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This paper examines the role of information technology (IT) in enabling organisational agility. The authors focus on two IT capabilities, IT exploration and IT exploitation. On the basis of conceptualisation of the capability lifecycle and a hierarchy of dynamic capabilities, the authors establish a theoretical linkage between lower-order capability and higher-order capability, i.e., IT exploration capability to IT exploitation capability to organisational agility. Using the partial least square approach, the authors empirically test the proposed relationships using data from 289 manufacturers in the Pearl River Delta region of Guangdong province, People's Republic of China. Our results suggest the positive effects of IT exploration and exploitation capabilities on customer, operational and partner agilities. In addition, the authors find that IT exploitation capability mediates the relationship between IT exploration capability and organisational agility. On the basis of our findings, implications for theory and practice as well as future research opportunities are discussed.

Abstract:In this study, we examine the role of information technology (IT) in improving organizational agility and firm performance from the perspectives of the resource-picking and capability-building mechanisms of rent creation, and the hierarchy of dynamic capabilities. We divide IT capabilities into IT exploration capability, which corresponds to the resource-picking phase, and IT exploitation capability, which corresponds to the capability-building phase. Based on the concept of a hierarchy of dynamic capabilities, we establish the theoretical links between lower order capabilities (IT exploitation), higher order capabilities (organizational agility), and performance. Using the partial least squares (PLS) structural equation modeling approach, we empirically test the proposed relationships using data from 289 manufacturers in the Pearl River Delta region of Guangdong, China. Our results suggest that 1) IT exploration capability (resource picking) affects IT exploitation capability (capability building); 2) IT exploitation capability has positive effects on customer, operational, and partner agilities (higher order of capabilities); and 3) the IT enabled organizational agilities positively affect firm performance. We discuss the theoretical and practical implications of our findings and the opportunities for future research.

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