The behavioural theory of the firm (BTOF) claims that firms' performance feedback is significant for strategic decision-making. Building upon this, we shift our focus from the widely researched topic of financial performance to sustainability performance. We theorize that firms' environmental performance feedback (i.e. performance relative to aspirations) influences their reshoring decisions. Based on a sample of publicly traded manufacturing multinational enterprises (MNEs) from 15 developed countries, we find that firms with below-aspiration environmental performance (BEP) are slower to engage in reshoring activity. In contrast, firms with above-aspiration environmental performance (AEP) are quicker to engage in reshoring. Moreover, we substantiate the moderating role of financial performance feedback: positive financial performance feedback enables firms with higher BEP to engage in reshoring activity even more slowly. Nevertheless, the moderating role of positive financial performance feedback has not been confirmed in the relationship between higher AEP and the timing of reshoring.

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Although the corporate response to institutional pressures on the environmental agenda seems to be foreseeable, there is a limited understanding of the mechanisms that influence the uptake of green innovation. In this article, we examine the above question in the context of China’s green credit policy. By integrating institutional theory with resource dependence theory, a premier framework for understanding organization–environment relations, we theorize that the change in internal resource dependence is a conduit by which institutional pressures trigger corporate green innovation. This study empirically focuses on 1,485 listed Chinese firms from 2007 to 2019, during which the green credit policy was implemented in 2012. We find that the policy leads to financial constraints that stimulate corporate green innovation. Furthermore, the relationship between green credit policy and financial constraints is more significant for firms with a higher level of financial dependence on banks.

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