The effects of environmental factors on low-carbon innovation strategy: A study of the executive environmental leadership in China

Low-carbon development of industrial enterprises has received extensive attention with increasing greenhouse effect. Low-carbon innovation strategies are a meaningful way to cope with the current increases in carbon emissions. Promoting the switch to low-carbon production by enterprises require significant and urgent consideration. The research probes the impact of internal and external environmental factors, i.e. internal innovation resources and innovation ability, external institutional pressure and stakeholder pressure, on low-carbon innovation strategy of industrial enterprises. Combined with executive environmental leadership, this paper establishes a comprehensive model of low-carbon innovation strategy. We sampled the responses of 398 employees from industrial enterprises in China to a questionnaire and gathered data for analysis. The empirical results reveals the correlation between environmental factors and the low-carbon innovation strategy implemented by industrial enterprises and the role of executive environmental leadership. Further, we show that low-carbon innovation strategy of the enterprises positively correlates with institutional pressure, stakeholder pressure, independent innovation ability and absorption and re-innovation ability. The impact of cooperative innovation ability and innovation resources on low-carbon innovation strategy was not found to be significant. In addition, executive environmental leadership demonstrates a positive moderating effect on institutional pressure, stakeholder pressure and innovation resources, but adversely affects innovation ability to the low-carbon innovation strategy.