Hossein Asgharian

Professor

Does competitive pressure drive effective corporate actions?

Författare

Simone Cenci
Hossein Asgharian
Lu Liu
Marek Rei
Maurizio Zollo

Summary, in English

Competitive pressure is an important driving factor of corporate behavioural changes. Yet, it is still unclear how it influences corporate attitudes towards environmental challenges. In this study, we systematically analyse the sustainability behaviour of a global sample of publicly traded firms to examine if and how competitive pressure pushes firms to implement effective behavioural changes to reduce their greenhouse gas emissions. Our results suggest that competitive pressure induces firms to increase investments across a broad spectrum of sustainability issues. Importantly, diversification of efforts, resulting from a decreased relative investment in risk mitigation and stakeholder engagement activities counterbalanced by an increased relative investment in innovation capabilities, is associated with greater abatement potential. Effects are modest in size but significant and robust against multiple alternative specifications. Overall, our analysis suggests that competitive pressures can be a driving force of effective corporate mitigation actions.

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