Munich Personal RePEc Archive

Does Market Competition Dampen Environmental Performance? Evidence from China

Duanmu, Jing-Lin and Bu, Maoliang and Pittman, Russell (2018): Does Market Competition Dampen Environmental Performance? Evidence from China. Forthcoming in: Strategic Management Journal

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Abstract

Departing from the extant literature which assumes that firms pursue strong environmental performance as a differentiation strategy, we analyse the general relationship between firms’ competitive strategy and their response to heightened market competition. We find that, using a large sample of Chinese manufacturing firms between 2000 and 2005, intensified market competition has an overall negative impact on firms’ environmental performance. The negative impact is exacerbated in firms adopting a cost-leadership strategy, but attenuated in those adopting a differentiation strategy. The results emphasize the importance of including an examination of the particular competitive strategies chosen by firms in seeking to understand the impact of intensified market competition.

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