The Links between Proactive Environmental Strategy, Competitive Advantages and Firm Performance: An Empirical Study in Vietnam

Abstract

The acceleration of environmental problems has put firms under high pressure to assume their social and environmental responsibility. This study aims to investigate the links between proactive environmental strategy, competitive advantages and firm performance. It also explores the control effects of firm size and industry type on the adoption of such a strategy. Data were obtained from 232 firms that participated in the program on benchmarking and announcing sustainable companies in Vietnam. Findings from structural equation modelling reveal that the adoption of a proactive environmental strategy generates both differentiation and cost leadership competitive advantages. Furthermore, differentiation competitive advantages enhance firm performance in both the short term (i.e., product, financial and production performance) and long term (i.e., strategic performance). Interestingly, a proactive environmental strategy is more prevalent among larger firms and those in service industries. This study’s findings provide support for firms to pursue a proactive environmental strategy and have several implications for policymakers in developing policies that aim at promoting environmental practices in firms.

Internal Control Quality, Enterprise Environmental Protection Investment and Finance Performance: An Empirical Study of China’s A-Share Heavy Pollution Industry

“…The existing studies focus on the influencing factors of enterprise environmental protection investment [ 21 , 36 , 37 , 39 ] or the economic consequences [ 40 , 41 , 42 , 43 ] and do not use an intermediary variable for internal control capabilities to indirectly affect financial performance. Based on the perspective of resource-based perspective, this article regards corporate environmental protection investment activities as an important resource that is scarce, valuable, and difficult to replicate [ 44 , 45 ], which can positively affect corporate financial performance and effectively explain the motivation for companies to actively invest in environmental protection.…”

Drivers of Proactive Environmental Strategies: Evidence from the Pharmaceutical Industry of Asian Economies

“…Additionally, current research outcomes demonstrated that the association is not direct between companies' performance and execution of volunteer eco-friendly exercises [2,31,32]. According to Do and Nguyen [33], Hoang et al [34], and Cheng et al [35], the association between environmental strategies and companies' performance is meditated through some prominent factors. Thus, the reinvestigation of this association has become very vital.…”

“…The co-evolutionary and neoclassical techniques from evolutionary theory on innovation [16,43] and innovation economics to environmental economics [44] have demonstrated eco-innovation. According to Do and Nguyen [33] and Rehfeld et al [45], several studies have used general innovation theory to explain eco-innovation, and it was further extended to become the environmental innovation theory [46]. Afterwards, several researchers have used this approach [47].…”

“…The proactive environmental strategy has several benefits to the organization; it provides a proactive approach to align strategic direction according to the changing needs, allowing an organization to remain competitive and achieve long-term sustainable growth and development. Thus, the proactive environmental strategy has a significant influence on the organization's operational performance [12,33,34,57]. Thus, we framed the following hypothesis: H1A.…”

Constructing an Adoption Model of Proactive Environmental Strategy: A Novel Quantitative Method of the Multi-Level Growth Curve Model

“…This research proposes a multi-level growth curve model (MGCM) to examine how multi-level CSR results in more growth of multi-level GOI, which in turn leads to more growth in PES adoption at the individual level. Indeed, past studies have begun to investigate environmental performance through the implementation of a PES [16], but few studies have focused on the driving factors of adopting a PES for company-level variables (e.g., CSR at the work unit level), which has caused a gap in the literature.…”