Alliance Network Position, Embeddedness and Effects on the Carbon Performance of Firms in Emerging Economies

Abstract

This article explores the effect of network structure on the carbon performance of firms in emerging economies at an ego network level. Building on the theoretical framework of social networks, we posit that an ego firm’s network position, structural embeddedness, and structural constraint affect carbon performance. We examine the research hypotheses using a panel data set made up of 44 Indian firms that entered into alliances under the Clean Development Mechanism over the 2005-2009 period. Our main results show that the central position of the focal firm in the network and its degree of network embeddedness exert a positive effect on its carbon performance. This article contributes to the literature on climate strategy by exploring the influence of the structural characteristics of the firm’s ego network in the carbon market on its environmental performance.

From Animosity to Affinity: The Interplay of Competing Logics and Interdependence in Cross‐Sector Partnerships

“…To ensure the validity of the proxy for the incompatibility of institutional logics, we computed two additional variables – CER revenues and sustainable development – and examined the association with our proxy. As noted, we argue that CDM projects using non‐renewable technologies are more closely aligned with the market logic, because organizations engaged in these projects seek to maximize their private benefits from obtaining CERs (Ashraf et al, ; Kolk and Mulder, ). Conversely, organizations engaged in renewable energy projects seem willing to forego some of these private benefits.…”

“…For organizations operating in developing countries, the incentives for reducing emissions are to gain access to technology from developed countries’ partners, legitimacy in local and international markets, and a first‐mover advantage in becoming climate‐change resilient. For developed countries’ organizations, the incentives are to earn CERs to comply with climate regulations in their home country, to obtain a favourable position in the carbon market, and to have new avenues to diversify their investment portfolio (Ashraf et al, ; Kolk and Mulder, ).…”

“…However, its direction for organizations in i and j will be different; both specifications of power imbalance i.e., and yield similar results (available with authors). Considering the cross‐sector and cross‐border partnerships in the CDM market, the exchange and power relations between industries can be expected to be asymmetric given their differential needs (Ashraf et al, ; Kolk and Mulder, ). This computation of power imbalance is also in line with studies that measure power asymmetry's direction as well as magnitude (Gulati and Sytch, ).…”

The roles of network embeddedness, market incentives, and slack resources in the adoption of clean technologies by firms in developing countries

“…The current literature on firm adoption of clean technologies mostly considers firms as autonomous entities and overlooks the set of relationships that a firm has with other organizations (Ashraf, Meschi, & Spencer, 2014). The relational view posits that resources may span firm boundaries (Dyer & Singh, 1998) with external resources, to which the firm has access, embedded in its alliance network.…”

“…The relational view posits that resources may span firm boundaries (Dyer & Singh, 1998) with external resources, to which the firm has access, embedded in its alliance network. The adoption of a clean technology strategy also requires resource-intensive innovation (Ahuja, Lampert, & Tandon, 2008;Frondel et al, 2007), which may be in excess of the resources we could reasonably expect a firm to possess, especially in a developing country context (Ashraf et al, 2014). Likewise, diffusion of clean technology amongst firms involves the transfer of information and has elements of innovation (Kemp & Volpi, 2008).…”