Contingent view on the relationship between proactive environmental strategy and corporate performance: Toward stakeholder engagement

Sustainability issues have become an integral part of business strategies, but we are yet to fully understand the relationship between environmentalism and performance. Because of prior studies generating inconsistent empirical results, this study tests the proposition that the relationship between a proactive corporate environmental strategy and a firm's performance depends heavily on the nature of the organization's important stakeholders. The stakeholder relationships tested included government relationships, product–customer relationships, and collaborations with suppliers. Survey data from the managers of 405 Chinese firms were analyzed. The results showed that the relationship between a proactive environmental strategy and firm performance varies with the level of the firm-government relationship, and product strategy.