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Board interlocks, absorptive capacity, and environmental performance

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  • Jing Lu
  • Fereshteh Mahmoudian
  • Dongning Yu
  • Jamal A. Nazari
  • Irene M. Herremans

Abstract

Coupling resource dependence theory with absorptive capacity concepts, we analyze the role absorptive capacity plays as a potential facilitator between board interlocks and environmental performance. Board interlocks act as avenues for knowledge and information that exist outside the organization to become resources to improve environmental performance. However, an organization also needs the ability to utilize knowledge to implement activities that lead to better environmental performance. Our results show that firms with a diversity of interlocks (greater number of board interlocks, interlocks in the same and different industries, and interlocks with top performers) achieve better environmental performance. Furthermore, we find that absorptive capacity, as measured by research and development (R&D) intensity, moderates the relationship between board interlocks and environmental performance.

Suggested Citation

  • Jing Lu & Fereshteh Mahmoudian & Dongning Yu & Jamal A. Nazari & Irene M. Herremans, 2021. "Board interlocks, absorptive capacity, and environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3425-3443, December.
    • Handle: RePEc:bla:bstrat:v:30:y:2021:i:8:p:3425-3443
    DOI: 10.1002/bse.2811
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    3. Jing Lu & Dongning Yu & Fereshteh Mahmoudian & Jamal A. Nazari & Irene M. Herremans, 2024. "The influence of board interlocks and sustainability experience on transparent sustainability disclosure," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 3769-3793, July.
    4. Luca Marrucci & Fabio Iannone & Tiberio Daddi & Fabio Iraldo, 2022. "Antecedents of absorptive capacity in the development of circular economy business models of small and medium enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 532-544, January.
    5. Yi Zhao & Jegoo Lee, 2023. "How does board interlock network matter for sustainability? A social learning approach to corporate environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5889-5908, December.
    6. Wunnam Basit Issah & Lutfa Tilat Ferdous & Faruk Bhuiyan & Taimur Sharif, 2024. "Digitalisation and environmental management activities: The effects of family ownership`," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4351-4374, July.
    7. Li, Yaya & Zhang, Yuru & Pan, An & Han, Minchun & Veglianti, Eleonora, 2022. "Carbon emission reduction effects of industrial robot applications: Heterogeneity characteristics and influencing mechanisms," Technology in Society, Elsevier, vol. 70(C).
    8. Joohee Han & Juil Lee & Sang-Joon Kim, 2021. "How Does Family Involvement Affect Environmental Innovation? A Socioemotional Wealth Perspective," Sustainability, MDPI, vol. 13(23), pages 1-12, November.
    9. Wang, Yujie & Tsang, Albert & Xiang, Yi & Yao, Daifei (Troy), 2023. "Corporate social responsibility misconduct and formation of board interlocks," Journal of Financial Stability, Elsevier, vol. 67(C).
    10. Jing Lu & Kathleen Rodenburg & Lianne Foti & Ann Pegoraro, 2022. "Are firms with better sustainability performance more resilient during crises?," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3354-3370, November.

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