Promoting firms' energy-saving behavior: The role of institutional pressures, top management support and financial slack

Highlights: • We studied firms' energy-saving behavior based on institutional theory. • Top management support positively influences firms' energy-saving behavior. • Financial slack positively moderates the effect of top management support. • Command-and-control instrument and mimetic pressure promote top management support. • Normative pressure and incentive instrument do not effect top management support. - Abstract: As one of the major energy-consuming countries, China is under great pressure to reduce energy consumption and carbon emissions. Companies, especially those with high energy consumption, are considered as key elements to improve energy efficiency. Although the Chinese government has made many related policies, there are still a substantial number of companies that have not adopted proactive energy-saving activities. Thus, it is important to study factors influencing firms' energy-saving behavior. Drawing on institutional theory, we build a model to explore the relationship between external pressures and firms' energy-saving behavior. Importantly, we investigated the role of top management support in linking external pressures to firms' energy-saving behavior and the moderating role of financial slack. The model was empirically examined using survey data collected from firms in China. Results show that top management support positively influences firms' energy-saving behavior. Command-and-control instruments, mimetic pressure and financial slack influence firms' energy-saving behavior through top management support, whereas incentive pressure and normative pressure have direct effects on firms' energy-saving behavior. Furthermore, financial slack positively moderates the effect of top management support on firms' energy-saving behavior. Based on the empirical results, policy implications on how to promote firms' energy-saving behavior are discussed.