Foreign multinational enterprises and eco-innovation in local firms: the effect of imitation
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Foreign multinational enterprises and eco‑innovation in local firms: the effect of imitation Yoo Jung Ha1 Received: 27 February 2020 / Revised: 29 September 2020 / Accepted: 15 October 2020 © Springer Nature Limited 2020
Abstract This paper investigates multinational enterprises (MNEs) as a potential referent for local firms making decisions on eco-innovation. By analyzing Korean innovation survey and patent data, we find local firms’ eco-innovation scope converges with that of the most profitable foreign MNEs within an industry, i.e., profitability is considered a reliable signal for imitation. The imitation tendency changes contingent on previous eco-innovation experience and innovation networks in other local firms. The degree of imitation is then negatively associated with local firms’ eco-innovation outputs. This study shows how local firms can use social proof from selected foreign MNEs to supplement their sense-making in a non-routine environment. Keywords MNE · Eco-innovation · Imitation · Social proof · Non-routine environment
Introduction Firms are constantly faced with non-routine environments that destabilize current meanings and organizational routines (Romanelli and Tushman 1994). The unpredictability and radical nature of such non-routine events call attention to a firm’s ability to recognize and make sense of unexpected, confusing and complex problems to sustain its competitive advantages (Weick et al. 2005). In this study, eco-innovation is construed as a non-routine event that may challenge an organization. Eco-innovation refers to the development and commercialization of products, processes and services that generate environmental benefits (Brunnermeier and Cohen 2003). Going beyond the environmental management of existing resources, it involves a radical and systematic transition from profit-oriented business models to sustainable ones (Berrone et al. 2013). While any innovation * Yoo Jung Ha [email protected] 1
The York Management School, University of York, Freboys Lane, Heslington East, York YO10 5GD, UK Vol.:(0123456789)
Y. J. Ha
involves imperfect information and complex problems, eco-innovation adoption is distinct in that the integration of sustainability into innovation processes entails substantive organizational, more than technological, changes (OECD 2010; Tsoukas and Chia 2002). Given the urgency of constructing meanings out of unforeseen, complex and confusing organizational challenges, heuristics, offering frugal but fast mental short-cuts, may prevail against systematic information-processing (Cornelissen 2012; Rao et al. 2001). Thus, recent studies have revealed the complexity of micro-foundations of eco-innovation decisions, emphasizing how an organization recognizes external situations and identifies plausible actions (Crilly and Sloan 2012). Monitoring other firms can shape the heuristics of a perceptive observer (Möller 2010). Decisions made by multinational enterprises (MNEs) offer important behavioral cues. MNEs are leading inventors of environmental technol
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