Strategic orientation and innovative behavior of private enterprises in responding to environmental regulations

WANG Junhao 1 and LI Yunyan 2

1President, Professor and Ph.D. in Economics, Zhejiang University of Finance and Economics

2Doctoral Candidate, Zhejiang Gongshang University; Research Associate, Zhejiang University of Finance and Economics

Abstract:

Private enterprises are facing the dual pressures of dwindling internal and external demand and tightening environmental regulations amid the global financial crisis. Strategies adopted by private enterprises to respond to environmental regulations can be divided into pro-active and defensive response strategies. The decision of an enterprise on whether to adopt green technology is dependent to a large extent on the strategic orientation of the enterprise for environmental protection. In the face of tightening environmental regulations, pro-active enterprises are more inclined than their defensive counterparts to adopt green techniques or develop green products. This paper represents an attempt to conduct an empirical analysis of the strategic orientation and green innovation behavior of private enterprises in responding to environmental regulations based on a field survey of the Zhejiang textile sector. It offers recommendations for the Chinese government to formulate and implement environmental regulation policy tailored to private enterprises.

Key words: Private enterprise, environmental regulation, strategic orientation, green innovation

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