Does institutional pressure foster corporate green innovation? Evidence from China's top 100 companies

Abstract The value of green innovation on achieving sustainable development is increasingly recognized in recent years. This paper explores whether and how external institutional pressure (including coercive pressure, normative pressure and mimetic pressure, though the last was not discussed in depth) promote green innovation and investigates the moderating effect of internal organizational slack by combining institutional theory and resource-based view. With the sample of China's top 100 listed companies from 2008 to 2014 and generalized estimating equations (GEE) approach, the findings supports the Porter Hypothesis that both coercive pressure and normative pressure have significant positive effects on corporate green innovation. Organizational slack positively moderates the relationship between coercive pressure and green innovation, but has no significant impact on the relationship between normative pressure and green innovation. Accordingly, the scientific value of this research is that it extends the debates on Porter Hypothesis and the role of organizational slacks. The results suggest that the government should strengthen the implementation of coercive tools, the media should play roles of “muckraking”, “catalyst” and the “vanguard” of public inquiry to insert normative pressure, and firms should rationally allocate slacks to improve green innovation.