Does It Pay to be Green? An Integrated View of Environmental Marketing with Evidence from the Forest Products Industry in China

Abstract

In the forest products marketing literature, a growing body of research has become available to study the environmental aspects of business strategy as the nexus between economic growth and sustainable development. The Chinese forest products industry has become the world’s leading manufacturer and exporter. With growing environmental pressure and international competition, how to enable the industry’s robust economic development to proceed in a sustainable manner is now a major concern to scholars, policy makers and industry managers. With a focus on environmental marketing at the strategic level, this study seeks to make several contributions to both practice and theory: 1) Based on a review of recent green movements in the industry, this study presents a three-stage evolutionary model driven by the government regulations, environmental standards, private initiatives, environmental NGOs and consumers. As the Chinese government gradually shifts its focus from direct involvement in enterprises to building market-supporting institutions, its influence on business decisions may decline in the future. Private sector demand and NGOs are expected to play an increasingly important role in driving the industry to become greener. 2) By integrating the natural resource-based view, the dynamic capability view and the market failure view on strategy, this study proposes a theoretical framework showing that an environmental marketing strategy (EMS) is driven by a combination of internal and external forces, including the environmental orientation and marketing capabilities as firm’s specific assets, and customer pressure as an external force. As the outcome, EMS can help firms achieve superior environmental and competitive performance. 3) Previous research suggests that as the market environment becomes increasingly favorable toward “green” businesses, it will offer an opportunity for the forest products industry to create or regain competitive advantages by proving its green credentials. This study provides partial support for this view by suggesting that an environmental marketing strategy could create about competitive opportunities for firms, but this study also argues that some environmental practices, such as forest certification, might not improve competitive performance unless they are aligned with the firm’s resources and the external environment as part of the strategy.