Hostname: page-component-848d4c4894-75dct Total loading time: 0 Render date: 2024-05-01T09:54:58.444Z Has data issue: false hasContentIssue false

Green Product Portfolio and Environmental Lobbying

Published online by Cambridge University Press:  18 May 2023

Jihyun Eun*
Affiliation:
Salisbury University, Salisbury, MD, USA
Minjung Lee
Affiliation:
University of Texas at Dallas, TX, USA
Young Hoon Jung
Affiliation:
Montclair State University, Montclair, NJ, USA
*
Corresponding author: Jihyun Eun; Email: jxeun@salisbury.edu

Abstract

Nowadays, a growing number of firms utilize corporate lobbying to advocate for more environmentally friendly policies and regulations, deviating from the traditional lobbying mainly used to minimize regulatory burdens. In this study, we investigate what motivates firms to engage in such an unusual type of lobbying—environmental lobbying. Focusing on the product strategy of firms, we suggest that firms with greater green product intensity are more likely to engage in environmental lobbying. When environmental lobbying raises environmental hurdles in the market, firms with an intensive focus on green products can bear adjustment costs with little effort, leaving other “less green” firms relatively disadvantaged under the newly regulated market conditions. Moreover, those firms can address demand-side issues more easily by lobbying the government to provide greater incentives for purchasing green products or to request subsidies that can be used to improve their cost structure. Our analyses based on the US light vehicle market indicate that, indeed, the more electric vehicles automakers sell relative to their total sale volumes, the more they will engage in environmental lobbying. We also find that this relationship becomes more salient when a firm has greater market share or originally comes from a foreign country with more stringent environmental regulations than the United States.

Type
Research Article
Copyright
Copyright © The Author(s), 2023. Published by Cambridge University Press on behalf of V.K. Aggarwal

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ajanovic, Amela, and Hass, Reinhard. 2018. “Electric Vehicles: Solution or New Problem?Environment, Development and Sustainability 20: 722.CrossRefGoogle Scholar
Albertini, Elisabeth. 2014. “A Descriptive Analysis of Environmental Disclosure: A Longitudinal Study of French Companies.” Journal of Business Ethics 121: 233–54.CrossRefGoogle Scholar
Amatulli, Cesare, De Angelis, Matteo, Peluso, Alessandro M., Soscia, Isabella, and Guido, Gianluigi. 2019. “The Effect of Negative Message Framing on Green Consumption: An Investigation of the Role of Shame.” Journal of Business Ethics 157: 1111–32.CrossRefGoogle Scholar
Anastasiadis, Stephanos, Moon, Jeremy, and Humphreys, Michael. 2018. “Lobbying and the Responsible Firms: Agenda-Setting for a Freshly Conceptualized Field.” Business Ethics: A European Review 27: 207–21.CrossRefGoogle Scholar
Ansari, Shahzad, Wijen, Frank, and Gray, Barbara. 2013. “Constructing a Climate Change Logic: An Institutional Perspective on the ‘Tragedy of the Commons.’Organization Science 24 (4): 1014–40.CrossRefGoogle Scholar
Bagayev, Igor, and Lochard, Julie. 2017. “EU Air Pollution Regulation: A Breath of Fresh Air for Eastern European Polluting Industries?” Journal of Environmental Economics and Management 83: 145–63.CrossRefGoogle Scholar
Barbarossa, Camilla, and De Pelsmacker, Patrick. 2016. “Positive and Negative Antecedents of Purchasing Eco-friendly Products: A Comparison between Green and Non-green Consumers.” Journal of Business Ethics 134: 229–47.CrossRefGoogle Scholar
Bodur, H. Onur, Duval, Kimberly M., and Grohmann, Bianca. 2015. “Will You Purchase Environmentally Friendly Products? Using Prediction Requests to Increase Choice of Sustainable Products.” Journal of Business Ethics 129: 5975.CrossRefGoogle Scholar
Brulle, Robert J. 2018. “The Climate Lobby: A Sectoral Analysis of Lobbying Spending on Climate Change in the USA, 2000 to 2016.” Climatic Change 149: 289303.CrossRefGoogle Scholar
Buysse, Kristel, and Verbeke, Alain. 2003. “Proactive Environmental Strategies: A Stakeholder Management Perspective.” Strategic Management Journal 24: 453–70.CrossRefGoogle Scholar
Cameron, A. Colin, and Trivedi, Pravin K.. 2009. Microeconometrics Using Stata. College Station, TX: Stata Press.Google Scholar
Canton, Joan. 2008. “Redealing the Cards: How an Eco-industry Modifies the Political Economy of Environmental Taxes.” Resource and Energy Economics 30 (3): 295315.CrossRefGoogle Scholar
Capron, Laurence, and Chatain, Olivier. 2008. “Competitors’ Resource-Oriented Strategies: Acting on Competitors’ Resources through Interventions in Factor Markets and Political Markets.” Academy of Management Review 33 (1): 97121.Google Scholar
Chang, Ching-Hsun. 2011. “The Influence of Corporate Environmental Ethics on Competitive Advantage: The Mediation Role of Green Innovation.” Journal of Business Ethics 104: 361–70.CrossRefGoogle Scholar
Chen, Yu-Shan. 2008. “The Driver of Green Innovation and Green Image—Green Core Competence.” Journal of Business Ethics 81: 531–43.CrossRefGoogle Scholar
Chen, Yu-Shan, and Chang, Ching-Hsun. 2013. “The Determinants of Green Product Development Performance: Green Dynamic Capabilities, Green Transformational Leadership, and Green Creativity.” Journal of Business Ethics 116: 107–19.CrossRefGoogle Scholar
Chen, Yu-Shan, Lai, Shyh-Bao, and Wen, Chao-Tung. 2006. “The Influence of Green Innovation Performance on Corporate Advantage in Taiwan.” Journal of Business Ethics 67: 331–39.CrossRefGoogle Scholar
Cheng, Colin C. J. 2020. “Sustainability Orientation, Green Supplier Involvement, and Green Innovation Performance: Evidence from Diversifying Green Entrants.” Journal of Business Ethics 161: 393414.CrossRefGoogle Scholar
Dal Bó, Ernesto. 2006. “Regulatory Capture: A Review.” Oxford Review of Economic Policy 22 (2): 203–25.CrossRefGoogle Scholar
Dangelico, Rosa Maria, and Pujari, Devashish. 2010. “Mainstreaming Green Product Innovation: Why and How Companies Integrate Environmental Sustainability.” Journal of Business Ethics 95: 471–86.CrossRefGoogle Scholar
De Chiara, Alessandra. 2016. “Eco-Labeled Products: Trend or Tools for Sustainability Strategies?” Journal of Business Ethics 137: 161–72.CrossRefGoogle Scholar
Delmas, Magali, Lim, Jinghui, and Nairn-Birch, Nicholas. 2016. “Corporate Environmental Performance and Lobbying.” Academy of Management Discoveries 2 (2): 175–97.CrossRefGoogle Scholar
Dorobantu, Sinziana, Kaul, Aseem, and Zelner, Bennet. 2017. “Nonmarket Strategy Research through the Lens of New Institutional Economics: An Integrative Review and Future Directions.” Strategic Management Journal 38 (1): 114–40.CrossRefGoogle Scholar
Ehsani, Mehrdad, Gao, Yimin, and Emadi, Ali. 2010. Modern Electric, Hybrid Electric, and Fuel Cell Vehicles: Fundamentals, Theory, and Design, 2nd edition. Boca Raton, FL: CRC Press.Google Scholar
Eun, Jihyun, and Lee, Seung-Hyun. 2021. “Aspirations and Corporate Lobbying in the Product Market.” Business & Society 60 (4): 844–75.CrossRefGoogle Scholar
Evers-Hillstrom, Karl, and Arke, Raymond. 2019. “Fossil Fuel Companies Lobby Congress on Their Own Solutions to Curb Climate Change.” Center for Responsive Politics. Accessed 4 October 2021, https://www.opensecrets.org/news/2019/05/fossil-fuel-lobby-congress-on-climate-change/.Google Scholar
Fremeth, Adam R., and Richter, Brian K.. 2011. “Profiting from Environmental Regulatory Uncertainty: Integrated Strategies for Competitive Advantage.” California Management Review 54 (1): 145–65.CrossRefGoogle Scholar
Funk, Russell J., and Hirschman, Daniel. 2017. “Beyond Nonmarket Strategy: Market Actions as Corporate Political Activity.” Academy of Management Review 42 (1): 3252.CrossRefGoogle Scholar
Gelles, David. 2022. “With Climate Agenda Stalled at Home, Biden Still Hopes to Lead Abroad.” New York Times. Accessed 25 November 2022, https://www.nytimes.com/2022/07/01/climate/biden-climate-agenda-global.html.Google Scholar
Grey, Felix. 2018. “Corporate Lobbying for Environmental Protection.” Journal of Environmental Economics and Management 90: 2340.CrossRefGoogle Scholar
Hahn, Tobias, Pinkse, Jonatan, Preuss, Lutz, and Figge, Frank. 2016. “Ambidexterity for Corporate Social Performance.” Organization Studies 37 (2): 213–35.CrossRefGoogle Scholar
Hansen, Wendy L., and Mitchell, Neil J.. 2000. “Disaggregating and Explaining Corporate Political Activity: Domestic and Foreign Corporations in National Politics.” American Political Science Review 94 (4): 891903.CrossRefGoogle Scholar
Harrison, Kathryn. 2007. “The Road Not Taken: Climate Change Policy in Canada and the United States.” Global Environmental Politics 7 (4): 92117.CrossRefGoogle Scholar
Hart, Stuart L. 1995. “A Natural-Resource-Based View of the Firm.” Academy of Management Review 20 (4): 9861014.CrossRefGoogle Scholar
Hillman, Amy J., and Hitt, Michael A.. 1999. “Corporate Political Strategy Formulation: A Model of Approach, Participation, and Strategy Decisions.” Academy of Management Review 24 (4): 825–42.CrossRefGoogle Scholar
Hillman, Amy J., Keim, Gerald D., and Schuler, Douglas. 2004. “Corporate Political Activity: A Review and Research Agenda.” Journal of Management 30 (6): 837–57.CrossRefGoogle Scholar
Hillman, Amy J., Zardkoohi, Asghar, and Bierman, Leonard. 1999. “Corporate Political Strategies and Firm Performance: Indications of Firm-Specific Benefits from Personal Service in the U.S. Government.” Strategic Management Journal 20 (1): 6781.3.0.CO;2-T>CrossRefGoogle Scholar
Huang, Jing-Wen, and Li, Yong-Hui. 2017. “Green Innovation and Performance: The View of Organizational Capability and Social Reciprocity.” Journal of Business Ethics 145: 309–24.CrossRefGoogle Scholar
Jenn, Alan, Azevedo, Inês L., and Ferreira, Pedro. 2013. “The Impact of Federal Incentives on the Adoption of Hybrid Electric Vehicles in the United States.” Energy Economics 40: 936–42.CrossRefGoogle Scholar
Johnstone, Micael-Lee, and Tan, Lay Peng. 2015. “Exploring the Gap between Consumers’ Green Rhetoric and Purchasing Behaviour.” Journal of Business Ethics 132: 311–28.CrossRefGoogle Scholar
Kamieniecki, Sheldon. 2006. Corporate America and Environmental Policy: How Often Does Business Get Its Way? Standford, CA: Stanford University Press.CrossRefGoogle Scholar
Kennard, Amanda. 2020. “The Enemy of My Enemy: When Firms Support Climate Change Regulation.” International Organization 74 (2): 187221.CrossRefGoogle Scholar
Kim, Eun-Hee. 2013. “Deregulation and Differentiation: Incumbent Investment in Green Technologies.” Strategic Management Journal 34 (10): 1162–85.CrossRefGoogle Scholar
Kim, Jin Hyung. 2019. “Is Your Playing Field Unleveled? U.S. Defense Contracts and Foreign Firm Lobbying.” Strategic Management Journal 40 (12): 1911–37.CrossRefGoogle Scholar
Kline, William A., and Brown, Richard S.. 2019. “Overcoming the Liability of Foreignness through Lobbying: An Examination of Franchise Systems.” Journal of International Management 25 (2): 100658.CrossRefGoogle Scholar
Köppl, Peter. 2012. “Green Lobbying: Is Sustainability More than a New Frame for Old-Style Lobbying? A Consultant's Personal Point of View.” Journal of Public Affairs 12 (3): 177–80.CrossRefGoogle Scholar
Laffont, Jean-Jacques, and Tirole, Jean. 1991. “The Politics of Government Decision-Making: A Theory of Regulatory Capture.” Quarterly Journal of Economics 106 (4): 10891127.CrossRefGoogle Scholar
Lee, Seung-Hyun, and Hong, Sungjin J.. 2012. “Corruption and Subsidiary Profitability: US MNC Subsidiaries in the Asia Pacific Region.” Asia Pacific Journal of Management 29: 949–64.CrossRefGoogle Scholar
Lee, Eun-Ju, Kwon, Gusang, Shin, Hyun Jun, Yang, Seungeun, Lee, Sukhan, and Suh, Minah. 2014. “The Spell of Green: Can Frontal EEG Activations Identify Green Consumers?” Journal of Business Ethics 122: 511–21.CrossRefGoogle Scholar
Levy, David L., and Rothenberg, Sandra. 2002. “Heterogeneity and Change in Environmental Strategy: Technological and Political Responses to Climate Change in the Automobile Industry.” In Organizations, Policy and the Natural Environment: Institutional and Strategic Perspectives,, edited by J, Andrew. Hoffman and Marc J. Ventresca, 173–193. Stanford, CA: Stanford University Press.Google Scholar
Lord, Michael D. 2000. “Corporate Political Strategy and Legislative Decision Making: The Impact of Corporate Legislative Influence Activities.” Business & Society 39 (1): 7693.CrossRefGoogle Scholar
Lux, Sean, Russell Crook, T., and Woehr, David J.. 2011. “Mixing Business with Politics: A Meta-analysis of the Antecedents and Outcomes of Corporate Political Activity.” Journal of Management 37 (1): 223–47.CrossRefGoogle Scholar
Mai, Robert, Hoffmann, Stefan, Lasarov, Wassili, and Buhs, Arne. 2019. “Ethical Products = Less Strong: How Explicit and Implicit Reliance on the Lay Theory Affects Consumption Behaviors.” Journal of Business Ethics 158: 659–77.CrossRefGoogle Scholar
Marcus, Alfred A., and Geffen, Donald A.. 2005. Hybrids—Hype or hope? Business & Professional Ethics Journal 24(1/2): 141161.CrossRefGoogle Scholar
Marsh, Sarah J. 1998. “Creating Barriers for Foreign Competitors: A Study of the Impact of Anti-Dumping Actions on the Performance of US Firms.” Strategic Management Journal 19 (1): 2537.3.0.CO;2-C>CrossRefGoogle Scholar
Masters, Marick S., and Keim, Gerald D.. 1986. “Variation in Corporate PAC and Lobbying Activity: An Organizational and Environmental Analysis.” In Research in Corporate Social Performance and Policy, edited by Preston, Lee E., 8: 249–72. Greenwich, CT: JAI Press.Google Scholar
Matten, Dirk, and Moon, Jeremy. 2020. “Reflections on the 2018 Decade Award: The Meaning and Dynamics of Corporate Social Responsibility.” Academy of Management Review 45 (1): 728.CrossRefGoogle Scholar
Maxwell, James, and Briscoe, Forrest. 1997. “There's Money in the Air: The CFC Ban and DuPont's Regulatory Strategy.” Business Strategy and the Environment 6 (5): 276–86.3.0.CO;2-A>CrossRefGoogle Scholar
McFarland, Matt. 2021. “Elon Musk Doubles Down on Ending ‘Subsidies’ as Competitors Now Reap More Benefits.” CNN Business. Accessed 22 January 2022, https://www.cnn.com/2021/12/07/tech/elon-musk-wsj-government/index.html.Google Scholar
Meznar, Martin B., and Nigh, Douglas. 1995. “Buffer or Bridge? Environmental and Organizational Determinants of Public Affairs Activities in American Firms.” Academy of Management Journal 38 (4): 975–96.CrossRefGoogle Scholar
Nehrt, Chad. 1998. “Maintainability of First Mover Advantages When Environmental Regulations Differ between Countries.” Academy of Management Review 23 (1): 7797.CrossRefGoogle Scholar
Olson, Mancur. 1965. Logic of Collective Action. Cambridge, MA: Harvard University Press.Google Scholar
Olson, Erik L. 2013. “It's Not Easy Being Green: The Effects of Attribute Tradeoffs on Green Product Preference and Choice.” Journal of the Academy of Marketing Science 41: 171–84.CrossRefGoogle Scholar
Ottman, Jacquelyn A., Stafford, Edwin R., and Hartman, Cathy L.. 2006. “Avoiding Green Marketing Myopia: Ways to Improve Consumer Appeal for Environmentally Preferable Products.” Environment: Science and Policy for Sustainable Development 48 (5): 2236.Google Scholar
Polk, Andreas, and Schmutzler, Armin. 2005. “Lobbying against Environmental Regulation vs. Lobbying for Loopholes.” European Journal of Political Economy 21 (4): 915–31.CrossRefGoogle Scholar
Porter, Michael E., and Van der Linde, Claas. 1995. “Green and Competitive: Ending the Stalemate.” Harvard Business Review 73 (5): 120–34.Google Scholar
Roberts, David. 2019. “A Major US Utility Is Moving toward 100% Clean Energy Faster than Expected.” Vox. Accessed 4 October 2021, https://www.vox.com/energy-and-environment/2018/12/5/18126920/xcel-energy-100-percent-clean-carbon-free.Google Scholar
Rugman, Alan M., and Verbeke, Alain. 1998. “Corporate Strategies and Environmental Regulations: An Organizing Framework.” Strategic Management Journal 19: 363–75.3.0.CO;2-H>CrossRefGoogle Scholar
Schuler, Douglas A. 1996. “Corporate Political Strategy and Foreign Competition: The Case of the Steel Industry.” Academy of Management Journal 39 (3): 720–37.CrossRefGoogle Scholar
Schuler, Douglas A., Rehbein, Kathleen, and Cramer, Roxy D.. 2002. “Pursuing Strategic Advantage through Political Means: A Multivariate Approach.” Academy of Management Journal 45 (4): 659–72.CrossRefGoogle Scholar
Tolchin, Martin, and Tolchin, Susan. 1988. Buying into America: How Foreign Money Is Changing the Face of Our Nation. New York: Times Books.Google Scholar
Toyota Motor North America, Inc. 2017. “LD-2 Disclosure Form: Lobbying Report for Toyota Motor North America, Inc., Quarter 1 (1/1–3/31).”Google Scholar
Wayland, Michael. 2021. “From ‘Blatantly Biased’ to ‘Discriminatory:’ Tesla, Toyota and Honda Criticize $4,500 EV Tax Incentive for Union-Made Vehicles.” CNBC. Accessed 11 December 2021, https://www.cnbc.com/2021/09/14/tesla-toyota-and-honda-criticize-4500-tax-credit-for-union-made-evs.html.Google Scholar
Weigelt, Carmen, and Shittu, Ekundayo. 2016. “Competition, Regulatory Policy, and Firms’ Resource Investments: The Case of Renewable Energy Technologies.” Academy of Management Journal 59 (2): 678704.CrossRefGoogle Scholar
Wooldridge, Jeffrey M. 2002. Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: MIT Press.Google Scholar
Yu, Zhihao. 2005. “Environmental Protection: A Theory of Direct and Indirect Competition for Political Influence.” The Review of Economic Studies 72 (1): 269–86.CrossRefGoogle Scholar
Zardkoohi, Asghar. 1985. “On the Political Participation of the Firm in the Electoral Process.” Southern Economic Journal 51 (3): 804–17.CrossRefGoogle Scholar
Zhang, Qi, Zhao, Qiuhong, Zhao, Xuan, and Tang, Ling. 2020. “On the Introduction of Green Product to a Market with Environmentally Conscious Consumers.” Computers & Industrial Engineering 139: Article 106190.CrossRefGoogle Scholar