Environmental Performance Feedback and Timing of Reshoring: Perspectives from the Behavioural Theory of the Firm

Zhang, Minhao; Shui, Xiaolong; Smart, Palie; Wang, Xiaojun; Chen, Jing

Abstract

The behavioural theory of the firm (BTOF) claims that firms’ performance feedback is significant for strategic decision‐making. Building upon this, we shift our focus from the widely researched topic of financial performance to sustainability performance. We theorize that firms’ environmental performance feedback (i.e. performance relative to aspirations) influences their reshoring decisions. Based on a sample of publicly traded manufacturing multinational enterprises (MNEs) from 15 developed countries, we find that firms with below‐aspiration environmental performance (BEP) are slower to engage in reshoring activity. In contrast, firms with above‐aspiration environmental performance (AEP) are quicker to engage in reshoring. Moreover, we substantiate the moderating role of financial performance feedback: positive financial performance feedback enables firms with higher BEP to engage in reshoring activity even more slowly. Nevertheless, the moderating role of positive financial performance feedback has not been confirmed in the relationship between higher AEP and the timing of reshoring.

Citation

Zhang, M., Shui, X., Smart, P., Wang, X., & Chen, J. (2023). Environmental Performance Feedback and Timing of Reshoring: Perspectives from the Behavioural Theory of the Firm. British Journal of Management, 34(3), 1238-1258. https://doi.org/10.1111/1467-8551.12677

• Journal Article Type: Article
• Acceptance Date: Oct 10, 2022
• Online Publication Date: Nov 17, 2022
• Publication Date: 2023-07
• Deposit Date: Oct 17, 2022
• Publicly Available Date: Nov 18, 2024
• Journal: British Journal of Management
• Print ISSN: 1045-3172
• Electronic ISSN: 1467-8551
• Peer Reviewed: Peer Reviewed
• Volume: 34
• Issue: 3
• Pages: 1238-1258
• DOI: https://doi.org/10.1111/1467-8551.12677
• Public URL: https://nottingham-repository.worktribe.com/output/12599251
• Publisher URL: https://onlinelibrary.wiley.com/doi/10.1111/1467-8551.12677
• Additional Information: Special Issue Article