Strategizing Environmental Policy and Compliance for Firm Economic Sustainability: Evidence from Taiwanese Electronics Firms

This study aims to examine whether the compliance of environmental policies can sustain firm economic performance, and whether a timing issue is relevant to firm economic sustainability in pursuit of eco‐friendly efforts. Offering models predominantly based on the institutional theory, this study tests hypotheses using data from 284 companies in the electronics sector in Taiwan during the period from 1997 to 2010. The findings reveal that the execution of environment policies mostly improves firm economic sustainability and some joint green efforts can even strengthen such sustainability; however, firms aiming to sustain their economic performance should not hasten to undertake eco‐friendly efforts, implying that first movers may not be guaranteed firm economic performance. Thus, managers should carefully strategize their green efforts to comply with environmental policies, and execute them in due course to prevent disadvantages, such as market uncertainty and complexity of green practices, while conquering organizational inertia. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment