4.2 Adequacy analysis
In this paper, the consistency threshold and frequency threshold are not directly set, but determined on the basis of the following four principles, which is in line with the practice of Schneider and Wagemann (2012). First, truth tables with results of 0 and 1 should be covered and roughly balanced. Second, the frequency threshold covers at least 75% of the observed samples (Ragin 2006). Third, the minimum value of PRI consistency shall be greater than or equal to 0.75 in order to reduce the number of conflicting configurations. Fourth, possible simultaneous subset relations should be avoided.
Considering the trade-off relationship between the coincidence rate and the coverage rate and the abnormal value assignment of a number of case variables in the large sample analysis, the consistency threshold was set to 0.75 and the frequency threshold was set to 5. Complex solutions, intermediate solutions, and concise solutions were obtained. The configuration results, obtained through Boolean algebra operation on the intermediate solution and the reduced solution, are shown in Table 7.
Table 7
Configuration analysis of realizing enterprise low-carbon strategy
Condition variable | configuration |
Low-level business environment | Mid-level business environment | High-level business environment |
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
Industry environment | Number of competitors | ■ | ● | ● | ■ | ■ | ■ | ■ | ■ |
Product Nature | ■ | ■ | □ | ● | ○ | ● | ○ | ● |
Individual heterogeneity | CEO power | ■ | □ | ■ | ● | ● | ○ | ● | ● |
TMT heterogeneity | □ | ■ | □ | ○ | ● | □ | ● | □ |
Business environment | Government efficiency | □ | | | □ | ■ | ■ | ■ | ■ |
Financial Services | □ | □ | □ | ■ | □ | ■ | ■ | ■ |
Market service | | | ■ | ■ | ■ | ■ | ■ | ■ |
Public Service | | | | □ | ■ | ■ | ■ | ■ |
Innovation environment | | | □ | □ | ■ | ■ | ■ | ■ |
Human Resources | □ | □ | ■ | ■ | □ | ■ | ■ | ■ |
consistency | 0.918 5 | 0.915 0 | 0.932 5 | 0.847 7 | 0.938 1 | 0.878 0 | 0.891 5 | 0.852 0 |
Original coverage | 0.167 7 | 0.114 9 | 0.154 8 | 0.018 9 | 0.036 7 | 0.167 6 | 0.136 1 | 0.046 2 |
Unique coverage | 0.023 7 | 0.003 3 | 0.008 2 | 0.003 4 | 0.004 8 | 0.008 6 | 0.018 1 | 0.003 3 |
Overall consistency | 0.862919 |
Overall coverage | 0.685767 |
Note: Follow Ragin and Fiss (2011) to present the QCA results, the solid circle representation conditions, ● Represents core conditions, ■ Indicates the edge condition, ○ indicates the lack of core conditions, □ indicates the lack of the edge condition, - means one The fuzzy state, that is, the condition can be deleted. |
Through the FsQCA configuration analysis of the internal and external environment of 699 heavily polluting enterprises in 175 cities in China, we find that the consistency of the overall solution is 0.862919, which is much higher than the acceptable degree of consistency of 0.75. The overall coverage is 0.685767, indicating that this configuration can explain why more than 68% of heavy-polluting enterprises choose low-carbon strategies. It should be noted that a large coverage rate implies that the existing instances that achieve a given result have a large proportion of a given condition combination; however, a small coverage rate does not mean that the given result cannot be achieved. Therefore, the eight configurations can be regarded as a combination of conditions that are sufficient to create a low-carbon strategy of an enterprise.
According to the different business environments corresponding to the eight condition configurations, these can be summarized into three categories (see Fig. 1). The core condition for the selection of a low-carbon strategy is the number of competitors in a low-level business environment (corresponding to configurations 1, 2, and 3); and the core condition for selecting a low-carbon strategy is CEO power * TMT heterogeneity * product attributes in a medium-to-high level business environment (corresponding to configurations 4, 5, 6, 7, 8, and 9).
4.2.1 Low-carbon strategy of enterprises under a low-level business environment
The results in the first and second columns of Table 7 show that none of the six business environment condition variables exist in configurations 1 and 2, indicating that the external environment of the company's production and operation is relatively poor. The limitation of the external resources companies can obtain, coupled with the concentration of competitors in the industry, further reduce the company's living space. The main products are sold to consumers. If the product is poor in quality, the company will face consumer complaints and other problems. In this "siege on all sides", a highly powerful CEO or a highly heterogeneous executive team is a key condition for companies to implement a low-carbon strategy. Therefore, this paper identifies configurations 1 and 2 as "Survival Low-Carbon Strategy".
The results in the third column of Table 7 show that the companies in configuration 3 do not directly face consumers, and thus, these companies have insufficient low-carbon motivation from the consumer side (Swaen 2021). The most direct reason for the implementation of the strategy is the high density of competitors in the industry. Low-carbon level and high-power CEOs would consciously adapt to the industry environment and adopt the same low-carbon strategy. Under this configuration, the company’s strategy choices are more likely caused by evaluations of competitors and predictions of the future development of the entire industry to maintain or expand the current corporate market share. Therefore, this paper identifies configuration 3 as "a firm-footed low-carbon strategy."
4.2.2 Low-carbon strategy of enterprises under a medium-level business environment
The results in the fourth column of Table 7 show that enterprises are facing a dual-driven business environment in configuration 4, driven by resources and financial services under the guidance of the market. In this business environment, despite the insufficiency of the market innovation intensity, enterprises can still obtain a high level of human resources and a better financial environment. These provide a good economic foundation for the purchase of environmental protection equipment and for the transformation of production technology. With regard to the enterprise itself, the products are consumer oriented and the industry competitors are intensive, which provides sufficient motivation for the enterprise to choose a low-carbon strategy. Therefore, this configuration reflects the low-carbon strategy generated when the enterprise has pressure, the CEO has power and financial resources are available. Therefore, this paper identifies configuration 4 as "larger and stronger low-carbon strategy".
The results in the fifth column of Table 7 show that enterprises are facing an innovation driven business environment under the dual leadership of the market and the government in configuration 5. Under this business environment, all external conditions required for business operations are basically optimal, and the participation of the government has imposed strong environmental pressure on enterprises. It has also been confirmed that an efficient governmental environment would exert a significant incentive effect on environmental protection such as low-carbon production (Khanna 2010). Therefore, the decision-makers of enterprises are bound to adopt a low-carbon strategy when the pressure of government environmental regulation and market competition occur at the same time. In addition, a high-level innovation environment also provides a good technical foundation for low-carbon strategy. Under this configuration, the enterprises’ low-carbon strategy is derived from "policy demand + industry demand + market foundation". Therefore, configuration 5 is identified as "adapted to the trend of low-carbon strategy."
4.2.3 Low-carbon strategy of enterprises under a high-level business environment
The results in the sixth, seventh, and eighth columns of Table 7 show that the enterprises under configurations 6, 7, and 8 are all in highly sophisticated business environments. This indicates that these enterprises have the ability to obtain all external resources needed for their own development. Compared with the pressure from competitors, enterprises in a high-level business environment are more concerned about consumers' wishes and provide them with higher-quality products, not merely to gain a greater market share within the industry. Under this configuration, managers’ strategic decision-making is no longer limited by the inherent thinking of peer competition and survival. Instead, managers are more likely to focus on establishing a specific corporate image, establishing a low-carbon brand, and creating a market space where no one can compete. This also leads to the implementation of the "blue ocean", which is a concrete manifestation of "strategy". Therefore, configurations 6, 7, and 8 are identified as "value innovation-based low-carbon strategy".
4.3 Robustness test
In this paper, the robustness test is carried out by adjusting the consistency threshold and frequency threshold which is in line with existing practice (Ragin and Fiss 2008). The results are not presented in this paper due to length limitation. First, the PRI consistency increased from 0.75 to 0.80, i.e., the analysis was repeated using a more stringent threshold. The results show that the generated configuration basically remains identical. Second, when the threshold of the number of cases increased to 6, the results show that the generated configuration basically remains identical. Finally, it can be assumed that the results obtained are robust.