Reexamination of the Porter Hypothesis-Differential Moderating Effect of Slack Resources

Abstract

Scholars have not reached a consensus to date, although they have tested the Porter Hypothesis widely. This inconsistency may come from the overlooking on the complexities of the causal chain involved in the Porter Hypothesis. Therefore, the purpose of this article is to reexamine the Porter Hypothesis in a contingency view by introducing slack resources as moderators. Employing data of 20 Chinese pollution-intensive industrial sectors from 2001 to 2010, we find that environmental regulation has a positive impact on innovation, and innovation has a positive influence on competitiveness. Additionally, the relationships in these two stages are moderated by different slack resources to varying degrees. In the first stage, unabsorbed slack resources play a stronger positive moderating role than do absorbed slack resources. In the second stage, the relationship between innovation and competitiveness is significantly and positively moderated by unabsorbed slack resources, while absorbed slack resources present an insignificant moderating effect.