Effects of "Best Practices" of Environmental Management on Cost Advantage: The Role of Complementary Assets.

The whole relationship between environmental variables and firm performance: Competitive advantage and firm resources as mediator variables

“…Decisions such as the purchase of a new green technology, the consideration of greener distribution and transportation systems or the eco-design of products and processes will allow firms to gain competitive advantages derived from cost reductions (Fraj-André s et al, 2008). Christmann (2000) provides evidence showing that the higher the firm's level of innovation in pollution proactive technologies, the larger the cost advantage it will gain from environmental strategies. Differentiation advantages typically arise from the perception on the part of customers that the product is more valuable (Lankoski, 2008).…”

“…continuous innovation or stakeholder management) and social reputation and legitimization (Aragó n-Correa and Rubio-Ló pez, 2007). Aragó n-Correa et al (2008) consider that proactive environmental management requires changes in routines and operations and is clearly an organizational competency (Christmann, 2000;Hart, 1995) since it requires the complex coordination of human and technical skills in order to reduce environmental impacts and simultaneously maintain or increase the competitiveness of the firm. Based on the reflections above, we suggest the next two hypotheses:…”

“…Firms may acquire or develop resources as a result of their environmental practices such as the capability to boost the process of learning in environmental issues, the ability to develop formal and informal environmental information exchange channels and the capability to cooperate with external stakeholders (Aragó nCorrea and Sharma, 2003;Christmann, 2000;Hart, 1995). We used 7 items based on new resources and capabilities.…”

“…Secondly, Christmann (2000), Dowell et al (2000) and Hart (1995) argue that researchers should investigate green issues through the lens of the resource-based view. Proactive corporate environmental strategies that go beyond regulatory compliance have a positive effect on firm performance when mediated by valuable organizational capabilities (Galdeano-Gó mez et al, 2008;Russo and Fouts, 1997;Sharma and Vredenburg, 1998;Wagner, 2005).…”

“…Other authors use competitive advantage measures to represent firm performance. Christmann (2000) and Shrivastava (1995) examine the potential outcomes of being environmentally proactive, arguing that it contributes to improvements in competitive advantage, by lowering costs and improving differentiation. Following these studies, we propose to analyze the causal relationships between environmental variables and financial performance, considering the role of competitive advantages as mediator variable.…”