Environmental Regulations-Enabled External Knowledge Acquisition and Proactive Environmental Strategy: The Moderating Effect of Social Media Capability

Abstract

A proactive environmental strategy (PES) serves as an impactful and effective way to alleviate a firm's adverse environmental impact, and environmental regulations are widely recognized as primary and crucial for promoting a PES. However, most studies in the PES field overlook the pivotal role of external knowledge acquisition and social media capability. Therefore, we have developed a theoretical model drawing on institutional and resource-dependent theories to address this gap. This model examines how different types of environmental regulations, such as market-based incentive regulation (MBI) and command-and-control regulation (CAC), enabled external knowledge acquisition on PES and how social media capability moderates these relationships. We conducted a survey involving 385 Chinese manufacturing firms and follow-up interviews with top managers to test our model. The findings indicate that MBI and CAC positively influence a firm's external knowledge acquisition for PES. However, it is worth noting that MBI exhibits a more substantial effect than CAC. Furthermore, the influence of social media capability on external knowledge acquisition varies depending on the specific dimension of environmental regulations under consideration. These results hold significant implications for organizations aiming to leverage diverse types of environmental regulations and harness the power of social media capability to bolster their proactive environmental strategies. Finally, given the varying levels of development and economic conditions across China, and the fact that these differences will change over time, future research should consider conducting comparative studies to understand PES at a regional level, by using more empirical methods, such as longitudinal research designs and case studies.