Motivation for innovation? How environmental performance feedback affects knowledge search and usefulness of inventions

Abstract

Research in environmental corporate social responsibility mainly focused on extrinsic factors as determinants of firms to engage in eco-friendly initiative. However, companies may have intrinsic motivation for innovative environmental practices, which cannot be explained solely by external factors. When companies are motivated to pursue innovative environmental practices? This study tries to answer this question by focusing on intrinsic factor, environmental performance feedback of companies, and examines how the difference between performance and aspiration level affects the motivations for innovative environmental practices (e.g., search for knowledge and usefulness of inventions). By testing our hypotheses within U.S. information communication and technology firms from 2010 to 2017, we find that the search intensity and the value of inventions are the highest when focal firm's environmental performance is moderately above aspirations, are lowered as performance falls below or rises above aspiration. Our study contributes to literature, including environmental corporate social responsibility as well as a behavioral theory of the firm, and has important implications for policymakers.