Benchmarking Effect: How Information Accessibility Affects Focal Firms' Imitation of Successful Peers' Green Innovation

Under severe competition and the pressures of regulations and stakeholders, it is important for all firms, in addition to successful peers, to gain legitimacy and maintain a competitive advantage by transitioning to ecologically sustainable business practices. By integrating information-based imitation and rivalry-based imitation theories, in this article, we investigate how access to successful peers' information enables focal firms to engage in green innovation. Using a sample of Chinese listed firms over the period 2007-2017, we find that focal firms are likely to imitate successful peers' green innovation behavior; we call this the "benchmarking effect." The effect is stronger when focal firms have a high degree of directors' network centrality or are geographically close to successful peers. These findings extend the research on who firms imitate and highlight the importance of information accessibility in promoting organizational homogenization.