The Influence of Government Green Development Policy on a Firm’s Disruptive Innovation

Abstract

Government policies have impacts on the disruptive innovation behavior of local companies, especially the green development policies. This paper is based on institutional theory, using data from 170 Chinese manufacturing entrepreneurs to verify that local governments’ green development policies have an effect on firms’ disruptive innovation behavior. Based on the empirical results, we find that entrepreneurs in regions with green or sustainable development policies are more likely to engage in disruptive innovation behavior; the influence will be stronger when the firm size is bigger. The study actually demonstrates that public policy about sustainable development enacted by local governments has a significant impact on the disruptive innovation behavior of firms. The findings of this paper enriches the research on the antecedents of disruptive innovation behavior adds to the theoretical framework of disruptive innovation and institutional theory, and supplements the specific embodiment of exploring disruptive innovation in the manufacturing industry. At the practical level, this paper provides theoretical guidance for entrepreneurs to choose the right regional entrepreneurship at the personal level. In addition, it provides the theoretical basis for entrepreneurs’ strategic decision-making at the entrepreneurial level, and for local governments to encourage entrepreneurial development and regional economic prosperity at the government level.