The Role of Environmental Regulatory- and Proactive-Driven Corporate Strategy in Creating Corporate Green Intellectual Capital (GIC) and Environmental Innovation (EI)

Despite the popularity and the great acceptance of the “command and control” instruments in the field of corporate environmental management, their influence on corporate environmental strategy remains questionable. The relevant literature defines the environmental legislations either as regulatory risks, which increase the compliance costs of firms without obvious benefits (reactive approach), or as incentives which facilitate firms to promote new innovations and enhance corporate intellectual capital (proactive approach). With this in mind, the goal of this paper is to provide some evidence for the effects of implementing an environmental management system, either as a result of proactive behavior or regulatory-driven behavior of firms, in various aspects of corporate environmental performance such as environmental innovation (EI), green intellectual capital (GIC), and the adoption of environmental practices. To do this, a questionnaire-based survey was conducted in a sample of 62 chemical companies. The outcome shows mixed results with both voluntary behavior and regulatory behavior affecting the environmental dimensions of corporate performance.