Cornell University, United States

Commercial organizations, local institutions, and the receptivity of pro-environmental practices

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Abstract

This paper seeks to understand boundary conditions that shape organizations’ proclivity to engage in pro-environment practices. We examine China’s Green Credit Initiative, a state intervention intended to discourage banks from lending to polluting firms. With the rise of state pressure towards pro-environment practices, it is unclear whether banks with a dominant market logic (merchant banks) or state logic (state banks) shall respond more substantially to such pressure. The findings show that a salient market logic motivates commercial organizations more than a state logic to improve environmental performance. However, this occurs only where local institutions fall short on environmental surveillance, or where local institutions are mature in marketization. Our study provides a new lens to understand sensegiving process across organizations with different logics in the face of institutional complexity. It also contributes to the reconciliation of prosocial engagement with commercial interests by highlighting the role of local institutions as critical contingencies.

Biography

Xuege (Cathy) Lu is a Ph.D. candidate in the Management & Organizations group of the Johnson College of Business at Cornell University. Her research mainly focuses on the interplay between institutional environments and market formation. She is currently studying how firm anticipate and respond to prosocial demand from different stakeholders. Her dissertation examines how institutional strategies shape the formation of a new market category, and how institutionalization as a process impacts dynamics among market participants. Prior to joining the PhD program at Johnson in 2016, Xuege worked as a consultant at the World Bank, where she managed development projects that promote sustainable business practices. Xuege holds a BA in journalism and mass communications from Fudan University and an MA from Johns Hopkins University in public policy.