The Effects of System Pressure on Low-Carbon Innovation in Firms: A Case Study from China

Abstract

With the signing and implementation of the Paris Agreement, low-carbon models have become the general trend for future development. In this context, many countries have successively introduced relevant low-carbon systems within their companies. These systems bring a lot of pressure on traditional manufacturing enterprises. This study deeply explores the influential mechanism of system pressure on the theory of low-carbon innovation of enterprises. It analyzed 328 questionnaires from 107 enterprises in China by using theoretical models based on the upper echelons theory and the dynamic capability theory. The results of the study indicate that (1) system pressure significantly promotes enterprises’ low-carbon innovation; (2) low-carbon dynamic capability mediates between system pressure and enterprise low-carbon innovation; (3) executives’ low-carbon awareness positively moderates the relationship between system pressure and low-carbon dynamic capability; (4) executive low-carbon awareness moderates the intermediary role of low-carbon dynamic capability between system pressure and enterprise low-carbon innovation. Theoretically, this study deepens empirical studies on system pressure and enterprise low-carbon innovation. This study contributes to the application of the upper echelons theory, dynamic ability theory and enterprise behavior theory in the field of low-carbon research. In view of this, this study intends to serve as a reference material for future low-carbon innovation-related research and a guide for the low-carbon management of enterprises.

1. Introduction

Low-carbon transformation of enterprises is currently touted as the spine of high-quality development of enterprises [1]. Against this backdrop, several countries have introduced a number of low-carbon initiatives with an overarching focus on carbon emission reduction and its attendant requirement from enterprises. China is a signatory to a lot of conventions on low-carbon emissions and has thus put forward plenteous initiatives to achieve low-carbon emission and carbon neutralization targets by 2030 and 2060, respectively (“dual carbon” target). This has exerted great pressure on high-emission industries and enterprises such as the smelting industry, cement industry and thermal power industry, among others. Moreover, various ministries and local governments have introduced copious supporting systems in this regard. These systems put a great deal of pressure on industries that are noted for high degrees of carbon emissions. It is evident in the literature that the reduction of carbon emission by enterprises is one of the ways to enhance low-carbon governance [2]. Strict policies on low-carbon emissions imply that R&D costs for low-carbon innovation of enterprises will be very high. This may not translate to a win–win situation of reducing carbon emissions and economic benefits. On the other hand, flexible policies will result in a situation where enterprises may lack the motivation for low-carbon research and development [3]. Ultimately, a low-carbon innovation drive cannot be put into action. Admittedly, the means to achieve low-carbon innovation of enterprises under system pressure and its corresponding low-carbon transformation drive have become the concern of academia and governments [4]. Therefore, it has become imperative to explore the impact of various low-carbon system pressures on enterprise low-carbon innovation against the optimization of policies and the future development of enterprises.

At present, theoretical research on low-carbon innovation of enterprises mainly focuses on the innovation of organizational structure, industrial upgrading, product-added value and other aspects [5]. There is, therefore, a dearth of literature on low-carbon innovation mechanisms of enterprises. Lai et al. [6] posit that low-carbon innovation of enterprises needs a matching organizational structure, otherwise it will be difficult to generate successful innovation projects. Chen et al. [7] proposed that government behavior also has an impact on the choice of low-carbon innovation mode of manufacturing enterprises. Farahnak et al. [8] advanced that the attitude of senior organizational managers towards innovation affects the adoption of innovation by enterprises. Moreover, Page and Fuller [9] contend that government interventions and low-carbon subsidies have the propensity to promote low-carbon innovation of enterprises. Jiang et al. [10] proposed that stakeholder pressure affects enterprise low-carbon innovation positively. Low-carbon innovation behavior of enterprises is closely related to government, suppliers, scientific research institutions, financial and intermediary institutions and investors, among others [11]. These stakeholders can apply low-carbon pressure on producers to adopt low-carbon innovation initiatives in their activities. Jiang et al. [5] advocate that stakeholder pressure and its related low-carbon initiatives positively affect the low-carbon innovation drives of companies. On the other hand, Ma et al. [12] proposed that government environmental regulations are likely to inspire companies to engage in low-carbon technology novelties. The foregoing narrative indicates that the extant literature on low-carbon innovation initiatives by manufacturing enterprises chiefly focuses on technology and management.

Some studies have explored the factors that influence the transformation of manufacturing enterprises, but there is still a lack of research on the impact mechanism of low-carbon innovation in manufacturing enterprises under a low-carbon system [2]. First of all, most of these studies assumed low-carbon enterprise innovation as a causal variable. Consequently, they explored their impact on enterprise value, business performance, shareholder value relationships and other aspects [11]. However, there are few studies on the antecedents of low-carbon innovation in manufacturing enterprises [10]; second, there is no research on the systematic analysis of low-carbon innovation dynamic mechanisms of enterprises in extant literature [13]; finally, empirical studies on the direct or indirect relationship between enterprise low-carbon innovation and its antecedents have not yet been explored in the literature [14].

Additionally, based on a literature review, we found that existing research works have explored the driving factors of low-carbon innovation in enterprises from both internal and external perspectives [4]. We, however, found that there are still the following gaps in prior studies: (1) From the perspective of external organizations, there is a lack of research on low-carbon innovation in enterprises from the perspective of low-carbon systems. At present, scholars have mainly analyzed the driving factors of low-carbon innovation in enterprises based on government behavior, banking policies, environmental regulations, etc. Moreover, the existing literature on external perspectives considered the impact of individual factors on low-carbon innovation in enterprises [10]. However, these studies did not explain the impact of low-carbon system pressure on the low-carbon innovation of enterprises. (2) From an internal organizational perspective, there is a lack of research on low-carbon innovation in enterprises from the perspective of executives’ low-carbon awareness. Enterprises are both the source of carbon emissions and the subject of environmental governance. Therefore, efforts should be made to reduce its negative impact on the environment. Based on this, prior studies have explored the driving mechanisms of executives’ traits, resource base, knowledge management and other internal organizational perspectives on low-carbon innovation in enterprises [2]. This lays the foundation for research from the perspective of internal factors. Currently, research on executive traits mainly focuses on how the statistical characteristics of executives drive low-carbon innovation in enterprises. However, there is a lack of research on the impact mechanism of executive environmental awareness on low-carbon innovation [5]. Therefore, the academic community urgently needs to explore the relationship between system pressure and low-carbon innovation in enterprises, as well as the role of executives’ low-carbon awareness.

To accomplish the national low-carbon emission objectives, the Chinese government has formulated plenteous low-carbon systems. These systems are intended to pile pressure on organizations to continuously establish, adjust and reorganize their internal and external resources and capabilities, ostensibly, to achieve a low-carbon competitive advantage for enterprises [15]. The dynamic capability theory emphasizes that in order to adapt to the rapidly changing external environment, enterprises must continuously acquire and integrate internal and external technologies, resources and functional capabilities [16]. Dynamic capability enables enterprises to continuously acquire new competitive advantages under given conditions. The theory provides a bridge between low-carbon systems and low-carbon innovation in enterprises [17]. Therefore, this article introduces low-carbon dynamic capabilities and delves into the impact of low-carbon system pressure on low-carbon innovation in enterprises. In addition, low-carbon dynamic capacity offers the mechanism for enterprises to carry out low-carbon innovation activities by integrating, building and reconstructing the internal and external resources of the organization. It is also deemed as the mechanism for enterprises to realize new resource allocation [16,17]. Compared with the static view of resources, low-carbon system pressure has the wherewithal to upgrade enterprise resources to attain low-carbon competitiveness [17]. This implies that system pressure can affect enterprise innovation via dynamic capability. However, existing studies have failed to explore the effectiveness of system pressure in dynamic situations [18]. Therefore, the present study proposes that low-carbon dynamic capability is the intermediary mechanism between system pressure and low-carbon innovation of enterprises.

The upper echelons theory takes the bounded rationality of people as the premise and analyzes the executives’ characteristics, strategic choices and organizational performance [5]. This theory highlights the role of demographic characteristics in managers’ cognitive models. In addition, the upper echelons theory posits that senior executives are the key element in enterprise innovation decision-making [19]. Based on the upper echelons theory, the present study introduces the concept of executives’ low-carbon awareness. This refers to the awareness and attention of top management personnel to reduce carbon emissions and green development [5]. The kind of environmental strategy an enterprise adopts under the same political and economic environment is affected by senior executives’ cognition, attitude, values and other characteristics [20]. Furthermore, senior executives’ interpretation of external pressures and their own capabilities can affect companies’ low-carbon strategies [5]. The impact of external pressure on low-carbon innovation is regulated by executives’ low-carbon awareness. This is because the higher the executives’ awareness of low-carbon, the more likely they tend to identify the potential benefits and market opportunities of low-carbon innovation. Senior executives with a strong sense of low-carbon tend to view low-carbon systems as future market opportunities. In particular, under the pressure of a low-carbon system, R&D investment of enterprises will increase and, finally, develop low-carbon products. On the other hand, executives with a strong sense of low-carbon are more likely to perceive the potential benefits of low-carbon policies. This subsequently, enhances the low-carbon dynamic capabilities of enterprises [5,17]. Specifically, enterprises will no longer passively respond to low-carbon issues. They will rather actively strive for government resources to offset the cost of low-carbon innovation.

Drawing on the upper echelons theory and dynamic capability theory [21,22], our study discusses the effectiveness of system pressure in relation to enterprises’ low-carbon innovation from the perspective of low-carbon dynamic capability. In particular, the study proposes a moderated mediation model to achieve its goal. It systematically analyzes the action mechanism and boundary conditions of system pressure on enterprise low-carbon innovation. In practice, this study provides a theoretical basis for the government to formulate low-carbon development industry policies.

This study also provides strong support for enterprises to formulate low-carbon innovation strategies. The remaining components of this study are organized as follows: Section 2 deals with the theoretical framework; Section 3 pertains to the research methodology; Section 4 involves the results of the study; Section 5 and Section 6 are dedicated to discussion, conclusion, implication and limitations of the study.

2. Theoretical Background and Hypotheses of the Study

2.1. Low-Carbon System Pressure and Low-Carbon Innovation of Enterprises

Scholars of organizational sociology mainly use isomorphism and legitimacy mechanisms to explain the homogenous behavior of enterprises [18]. They believe that within the framework of system pressure, enterprises will demonstrate various behaviors. This eventually leads to convergence among companies in the same environment. At present, scholars mainly classify these isomorphic mechanisms into three categories: coercive pressure, normative pressure and mimetic pressure [4]. Coercive pressure mainly comes from various mandatory pressures imposed by the government and regulatory agencies, such as administrative directives, laws and regulations [13]. Mimetic pressure originates from the learning behavior undertaken by enterprises to maintain their competitive advantage and cope with the competition brought about by enterprises or competitors within the industry [4]. Due to increasing social awareness, consumers increasingly prefer products with certain characteristics. Therefore, the ability to provide products with such characteristics has increasingly become an industry standard. The pressure formed by this norm is a type of normative pressure [13].

After the signing of the Paris Agreement, many governments have formulated low-carbon policies based on emission reduction targets. These policies not only change the development mode of the national economy but also bring great pressure on enterprises to adjust their production mix [5]. The pressure of low-carbon systems refers to the pressure on enterprises with large carbon emissions to adopt a production mechanism matrix that is more environmentally friendly, pro-green, and thus, conform to the Sustainable Developmental Goals (SDGs) [4]. This is because local governments attach a great deal of importance to low-carbon targets. They, therefore, take the implementation of low-carbon targets as a key indicator for evaluating the legitimacy of enterprises [23]. For example, the government has set emission reduction targets for certain industries, conducted regular spot checks and supervision and punished enterprises that do not meet these requirements. In addition, consumers’ low-carbon preference and other enterprises’ low-carbon imitation will also put pressure on enterprises. These pressures constitute system pressure [4]. System pressure has become an important driving force and an anchor for enterprises to rapidly build low-carbon capacity and implement low-carbon management [13]. By sticking to the low-carbon requirements of political forces, social rules, stakeholders, etc., enterprises can obtain legitimate resources in the organizational environment and improve their low-carbon capabilities [24]. In this way, companies can have the incentive to make low-carbon innovations. They can also overcome the legitimate bottlenecks they face in their operations [25].

Low-carbon standards issued by governments are external pressures that affect enterprises’ low-carbon innovation [5]. If enterprises violate these low-carbon standards, they are severely punished [15]. On the other hand, enterprises that religiously conform to low-carbon regulations are graciously rewarded and praised so that others emulate their actions. In order to avoid various penalties, enterprises will take various measures to implement low-carbon innovation activities. Therefore, low-carbon regulation has emerged as the main driving fulcrum for enterprises to implement low-carbon innovation behavior [6]. More so, policies such as economic support and preferential policies are important drivers and antecedents of low-carbon innovation for SMEs [26]. For example, preferential carbon tax policies, a clean development mechanism (CDM), projects and special support funds can provide low-carbon innovation support for some enterprises. Therefore, some enterprises can use the government’s favorable policies and systems to carry out low-carbon innovation and ultimately improve their competitive advantage [5].

On the other hand, normative pressure can motivate organizations to carry out low-carbon innovation activities in order to gain social legitimacy recognition [4]. Currently, enterprises face low-carbon values and behavioral norms related to the social legitimacy determined by industry associations, academic institutions, etc. [15]. Therefore, they will compare with their peers in the same industry and attempt to maintain consistency in behavioral standards, norms, and social expectations. The present study posits that low-carbon normative pressure will promote low-carbon innovation in enterprises.

In addition, competitors attach great importance to low-carbon issues and form legitimacy and resource competitions with a focus on enterprises [10]. This creates a low-carbon mimetic pressure on enterprises. This mimetic pressure comes from the organization’s perception of competitor behavior [17]. Organizations and individuals in social networks tend to imitate other network members [4]. When there are uncertainties in the environment, organizations attribute the achievements of competitors to their strategic choices and adopt the same behavior as competitors. Competitors enhance their relative legitimacy due to their emphasis on low-carbon innovation issues. Therefore, low-carbon mimetic pressure will also promote low-carbon innovation in enterprises.

Accordingly, we propose the following:

Hypothesis 1 (H1). 

Low-carbon system pressure positively affects enterprises’ low-carbon innovation.

2.2. The Intermediary Role of the Low-Carbon Dynamic Capacity of Enterprises

The resource-based view (RBV) theory advances that heterogeneous resources and unique capabilities of enterprises have a crucial role in influencing the selection of enterprise behavior [27]. Low-carbon dynamic capability refers to the enterprise’s ability to adapt and reconfigure the environment and other resources based on the use of existing low-carbon resources and capabilities [17]. The motivation behind this is to build and develop new organizational capabilities to adapt to an external low-carbon environment [5]. Low-carbon innovation is, therefore, seen as an economic behavior with high uncertainty and risk, which requires enterprises to have certain dynamic capabilities [17]. It is only within this framework that enterprises are continuously required to reconstruct and integrate internal and external resources to provide adequate support relative to a low-carbon implementation drive. Thus, low-carbon dynamic capability is deemed as a prerequisite and a guarantee for enterprises to carry out low-carbon innovation.

The effectiveness of a low-carbon system in promoting low-carbon innovation of enterprises does not only depend on the scientific and rational design of the government’s low-carbon system [28]. It also depends on the strength of the organization’s internal dynamic adaptation and innovation capabilities [5]. Organizing low-carbon innovation requires a lot of capital, talent and technological resources. Moreover, the response degree of enterprises to external system pressure depends on their resources and capabilities [4]. Therefore, in the face of strong environmental regulatory pressure, enterprises with strong low-carbon dynamic capabilities are more likely to take low-carbon innovation initiatives [17]. This is because these enterprises can obtain more valuable low-carbon resources [13]. Specifically, when external regulatory pressures are high, enterprises with strong low-carbon dynamic capabilities can quickly obtain a large amount of information and knowledge [15]. In this way, they can better support low-carbon innovation research and further achieve commercialization.

Furthermore, enterprises with strong low-carbon dynamic capabilities can also make the necessary adjustments and changes to the existing organizational model, operating system and resource allocation mode in a timely manner [4]. These make it easier for them to achieve technological innovation [17]. However, enterprises with weak low-carbon dynamic capabilities have limited the decision-making of managers due to a lack of resources and capabilities [5]. This makes them unable to actively invest in low-carbon innovation activities.

Based on prior studies on the relationship between environmental regulation and low-carbon innovation in enterprises, Jiang et al. [5] pointed out that the impact of environmental regulation on low-carbon innovation in enterprises is closely related to organizational resources and capabilities. That is to say, the difference in the driving effect of regulatory pressure on low-carbon innovation in enterprises is largely attributed to the differences in the organization’s own resource endowment and innovation ability [13]. With the increase of external environmental regulation intensity, low-carbon dynamic capacity has no impact on the low-carbon innovation of enterprises. This is not only a concrete manifestation of enterprises’ active response to system pressure, but also a need to achieve low-carbon development through the allocation and restructuring of various resources [17]. With the gradual introduction of external low-carbon systems, the system pressure faced by enterprises is also increasing [4]. This implies that enterprises allocate and reorganize internal and external resources, develop more low-carbon products and put them into the market and eschew low-carbon development opportunities brought by the external environment [29]. From the foregoing, this study asserts that low-carbon dynamic capacity plays an indispensable role in the association between low-carbon regulatory pressure and low-carbon innovation. More specifically, the pressure of government system regulations can effectively force enterprises to carry out low-carbon innovation activities [17]. Based on this claim, the authors propose the following:

Hypothesis 2 (H2). 

Low-carbon dynamic capabilities mediate the relationship between system pressure and enterprise low-carbon innovation.

2.3. The Moderating Effect of Executives’ Low-Carbon Awareness

Scholars who hold upper echelons theory believe that executives’ interpretation of organizational contexts is a reflection of their personal cognition, values and experiences [13]. Organizations are not simple and completely independent when dealing with system pressures. System pressure may undergo some changes when it infiltrates the organization. Senior executives’ judgment on whether low-carbon development is an opportunity or a threat plays an important role in the strategic choice of enterprises [10]. Therefore, executives’ perception of low-carbon determines whether a company adopts a low-carbon response behavior. However, executives’ low-carbon awareness is a specific manifestation of their perception.

Executives’ low-carbon awareness refers to their awareness of the value judgment, behavior tendency and development trend of reducing carbon emissions after paying attention to low-carbon issues [30]. Organizations’ low-carbon strategies depend on the executives’ low-carbon awareness disposition [5]. Executives with low-carbon awareness can identify the urgency of low-carbon issues and thus propose coping strategies. Therefore, the judgment of senior executives on the importance of low-carbon issues determines whether the enterprise’s low-carbon strategy is formulated or not [31]. In addition, the deeper the executives’ knowledge of low-carbon, the greater their passion to transmit their information on low-carbon systems to all departments of the enterprise [30]. Enterprises will, therefore, find it easier to integrate various resources and carry out low-carbon innovation activities. Similarly, Xia et al. [32] proposed that the stronger the executives’ awareness of low-carbon, the more likely they will perceive threats under system pressure. Also, the tougher the executives’ low-carbon awareness, the more likely they can identify market opportunities within the framework of low-carbon systems [33]. The upper echelons theory holds that the background characteristics, values, attitudes and thinking patterns of senior executives have a significant impact on organizational behavioral decisions and economic benefits [34]. Managers’ identification and interpretation of external low-carbon systems will show some differences, which will be reflected in the behavioral and decision-making disposition of enterprises [5]. Therefore, the low-carbon awareness behavior of senior executives determines the behavioral choices of enterprises to a certain extent [10]. Low-carbon awareness of senior executives, on the other hand, serves as a key factor in explaining organizations’ response to system pressure in different ways under the same environment [13].

It is evident in the literature that managers with strong low-carbon awareness will actively pay attention to low-carbon policies, regulations and the latest developmental trend in the industry [5]. They are also more aware of the importance of low-carbon development and fully understand consumers’ low-carbon demands [30]. They will also be more optimistic in explaining low-carbon policies and can link low-carbon policies to enterprise development [34]. Managers can fully recognize the importance of low-carbon issues and will be willing to invest in low-carbon innovation activities on the basis of their strength of awareness of low-carbon emissions and related system pressure [31]. Therefore, when senior managers have a positive attitude towards enterprise development, system pressure can effectively drive enterprises to integrate various resources and capabilities. Based on the above claim we hypothesize the following:

Hypothesis 3 (H3). 

Executives’ low-carbon awareness moderates the positive relationship between system pressure and the low-carbon dynamic capabilities of enterprises.

2.4. The Role of Moderated Mediator

From the system level, executives’ low-carbon awareness is influenced by the government, customers and competitors [30]. From the perspective of organizational strategy, whether enterprises incorporate the low-carbon issue into their development strategy depends on the cognition of senior executives [32]. The low-carbon awareness of executives can help them recognize the severity and urgency of low-carbon issues, as well as how companies should respond. The judgment of executives on the importance of low-carbon issues determines whether low-carbon issues are included in the strategic level [10]. In addition, the stronger the low-carbon awareness of executives, the more eager they are to convey the importance of low-carbon production to various departments of the enterprise [13]. At this point, managers can receive more support when implementing low-carbon innovation to cope with external environmental pressures. Therefore, the low-carbon awareness of executives is a key factor that determines the impact of low-carbon system pressure on low-carbon innovation in enterprises.

The low-carbon awareness disposition of senior executives creates important conditions for low-carbon systems to play their respective roles [5]. In the context of weak low-carbon awareness of senior executives, enterprises will adopt some negative coping strategies in the face of a low-carbon system. To this end, system pressure makes it difficult to promote a low-carbon innovation mechanism of enterprises through low-carbon dynamic capabilities [34]. When those in top management have a strong awareness relative to low-carbon, system pressure develops a stronger influence on the low-carbon dynamic capabilities of enterprises [13]. Therefore, the stronger the executive management awareness of low-carbon products, the more likely the pressure of low-carbon systems will emerge to promote enterprises’ interest, ostensibly, to integrate various capabilities and resources [30]. Together with the hypotheses H2 and H3 proposed above, we further propose a regulated mediation model. That is, the low-carbon dynamic capabilities of enterprises mediate the impact of system pressure pertaining to low-carbon novelty. However, the size of this intermediary role depends on the level of the executives’ low-carbon awareness. We, therefore, hypothesize the following:

Hypothesis 4 (H4). 

Executives’ low-carbon awareness moderates the impact of system pressure on enterprises’ low-carbon innovation through enterprises’ low-carbon dynamic capabilities.

The conceptual model of this study is indicated in Figure 1.

3. Methodology

3.1. The Study Design

We conducted an extensive literature review on related materials and subsequently designed a survey instrument for data collection. After the initial stage of designing the questionnaire, we invited five experts on the subject matter to assist us in fine-tuning the questionnaire. In addition, eight enterprises in Chengdu, Xi’an and Chongqing were selected for in-depth interviews. The questionnaire was required to be filled out by the management or key technical personnel who are familiar with the enterprises’ coping strategy and innovation in relation to low-carbon emissions. From the results of the pilot survey, we modified the questionnaire before we launched into the actual survey exercise. The scale for the survey had thirty (30) questions. Furthermore, the authors used a Likert scale of five points (spanning 1 = strongly disagree to 5 = strongly agree) in the study.

3.2. Constructs Operationalization

The measurement tools of the study were adapted and operationalized from extant literature. Specifically, the enterprise low-carbon innovation construct was adapted from Xu et al. [13] and Chen et al. [7]. It has a total of 7 items.

The low-carbon system pressure construct, which has a total of 10 items, was operationalized from DiMaggio et al. [35], Jiang et al. [10], Xu et al. [13] and Guan [36].

The executives’ low-carbon awareness construct which consists of 6 items was adapted from Xu et al. [13], Aragón-Correa et al. [37] and Jiang et al. [5].

Moreover, the low-carbon dynamic capacities construct was adapted from Chen and Chang [38] and Lin and Chen [39], with a total of 7 items. The above variables are shown in

Table 1. The constructs of the study.

Variable	Measurement Index	Literature Resources
Enterprise low-carbon innovation	ELI1: The enterprise has formulated short-term low-carbon innovation goals.	Xu et al. (2017) [13]; Chen et al. (2021) [7]
	ELI2: The enterprise has set a long-term low-carbon innovation goal.
	ELI3: The enterprise has formulated a clear plan for implementing low-carbon innovation activities.
	ELI4: The enterprise implements comprehensive low-carbon management.
	ELI5: The enterprise has designed products to save energy consumption.
	ELI6: The enterprise has designed low-carbon products.
	ELI7: The enterprise has improved the production process to reduce carbon emissions.
Low-carbon system pressure	LSP1: The production of enterprises must comply with relevant domestic low-carbon laws and regulations.	DiMaggio et al. (1983) [35]; Jiang et al. (2020) [10]; Xu et al. (2017) [13]; Guan (2017) [36]
	LSP2: The production of the enterprise must comply with the relevant low-carbon regulations of the exporting country.
	LSP3: The government has provided tax care related to the implementation of low-carbon goals.
	LSP4: The government has provided low-carbon subsidies for enterprises.
	LSP5: The government actively publicized the low-carbon goal and promoted its implementation.
	LSP6: The enterprise’s customers require that the products meet low-carbon standards.
	LSP7: Customers of the enterprise attach importance to products with low-carbon concept.
	LSP8: Suppliers of enterprises require that their production comply with low-carbon regulations.
	LSP9: The public (such as communities and non-governmental environmental organizations) attach importance to low-carbon issues.
	LSP10: Competitors have successfully adopted industry-leading low-carbon processes.
Executives’ low-carbon awareness	ELA1: Senior executives of enterprises are well aware of the impact of the “dual carbon” target on enterprises.	Xu et al. (2017) [13]; Aragón-correa et al. (2008) [37]; Jiang et al. (2022) [5]
	ELA2: Enterprise executives are well aware of the carbon emission level of their industry.
	ELA3: Enterprise executives are well aware of the “dual carbon” goal.
	ELA4: Enterprise executives believe that low-carbon innovation can improve the corporate image.
	ELA5: Enterprise executives believe that low-carbon innovation can improve enterprise economic performance.
	ELA6: Enterprise executives believe that low-carbon innovation can improve enterprise environmental performance.
Low-carbon dynamic capacities	LDC1: The company can quickly obtain low-carbon resources according to changes in internal and external environment.	Chen and Chang (2013) [38]; Lin and Chen (2017) [39]
	LDC2: The company can obtain low-carbon resources at a lower cost.
	LDC3: The company has the ability to successfully integrate and manage specialized low-carbon knowledge within the company.
	LDC4: The company has the ability to assimilate, learn, generate, combine, share, transform and apply new low-carbon knowledge.
	LDC5: The company has the ability that can fast monitor the environment to identify new low-carbon opportunities.
	LDC6: The company has the ability to successfully coordinate employees to develop low-carbon technology.
	LDC7: The company has the ability to successfully allocate resources to develop low-carbon innovations.

.

Following Jiang et al. [5], corporate scale, age of the corporation and enterprise type as well as industry type were used as control variables.

3.3. Data Collection Procedure

We selected some enterprises in Sichuan, Chongqing, Shaanxi, Shandong and other regions for the study. These enterprises are all from sectors with heavy carbon emissions. The questionnaire was designed for senior managers who had been tasked to handle the enterprises’ low-carbon innovation strategies. The executives in this study mainly include the chairman, general manager, deputy general manager, assistant general manager, low-carbon department manager or environmental project leader, among others. These people play indispensable roles in the formulation and implementation of low-carbon strategies.

First, we obtained a list of enterprises from the industrial and commercial registration authorities and sorted them into industrial categories. Then, 107 companies were randomly selected using Minitab 20.0 software. The questionnaires were sent to the respondents through email, WeChat, QQ and email, among others. In order to have face-to-face contact with the interviewees, we sent 11 people to the companies for offline interviews to obtain direct information from the participants.

All in all, a total of 427 questionnaires were distributed in the 107 enterprises, with a recovery rate of 73.46%. Finally, 328 valid questionnaires were retained after discarding questionnaires that were not usable due to gross violation of some key principles akin to the filling out of the questionnaire. The effective questionnaire rate was 56.36%. The descriptive statistical results of the sample are shown in

Table 2. Characteristics of the samples.

Items	Categories	Frequency (N = 328)	Percent (%)
Corporate scale	Under 100	16	4.88%
	101–200	32	9.76%
	201–500	147	44.82%
	501–800	87	26.52%
	More than 800	46	14.02%
Age of the Corporation	Less than 3 years	48	14.63%
	3–5 years	105	32.01%
	More than 5 years	175	53.35%
Corporate type	state-owned enterprise	215	65.55%
	Non-state-owned enterprise	113	34.45%
Industry type	Metallurgical industry	28	8.54%
	Transportation equipment industry	32	9.76%
	Petroleum, chemical and plastic industries	61	18.60%
	Textile, garment and leather industries	77	23.48%
	Mechanical equipment industry	85	25.91%
	Other manufacturing industries	45	13.72%

.

3.4. Reliability and Validity of the Scale Variable

Before testing the hypotheses, it is always necessary to test the reliability and validity of the measurement instrument as shown in

Table 3. Results of validity and reliability testing.

Variable	Items	Cronbach’s α		KMO		CR
Enterprise low-carbon innovation	ELC1	0.778	0.817	0.847	0.819	0.835
	ELC2	0.796		0.782
	ELC3	0.768		0.823
	ELC4	0.736		0.867
	ELC5	0.782		0.821
	ELC6	0.821		0.775
	ELC7	0.716		0.769
Executives’ low-carbon awareness	ELA1	0.758	0.756	0.764	0.787	0.743
	ELA2	0.716		0.781
	ELA3	0.789		0.775
	ELA4	0.775		0.848
	ELA5	0.786		0.778
	ELA6	0.777		0.812
Low-carbon system pressure	LSP1	0.698	0.769	0.827	0.782	0.834
	LSP2	0.787		0.742
	LSP3	0.821		0.847
	LSP4	0.749		0.662
	LSP5	0.738		0.767
	LSP6	0.786		0.739
	LSP7	0.894		0.787
	LSP8	0.673		0.821
	LSP9	0.782		0.726
	LSP10	0.781		0.758
Low-carbon dynamic capacities	LDC1	0.774	0.814	0.845	0.813	0.826
	LDC2	0.768		0.769
	LDC3	0.679		0.778
	LDC4	0.787		0.858
	LDC5	0.832		0.778
	LDC6	0.787		0.867
2	LDC7	0.769		0.738

. We used principal component analysis and the varimax-rotation method to extract the main variables. Cronbach’s α coefficient was used to estimate and test the internal consistency. It can be observed in Table 3 that Cronbach’s α statistics (Table 3) relative to the four (4) factors and each dimension of the study are all greater than 0.70, as recommended by Fornell and Laclker [40]. This indicates that the reliability of the scale is very good. We also found that the CR values for all variables were greater than 0.70. This indicates good aggregate validity.

4. Results

4.1. Common Method Bias

We used Amos 22.0 to conduct confirmatory factor analysis on the four variables, as shown in

Table 4. Confirmatory factor analysis.

Measurement Model	χ2	df	RMSEA	CFI	TLI	SRMR
Four-factor model	264.454	162	0.054	0.981	0.969	0.048
Three-factor model (LSP + ELI,ELA,LDC)	586.765	165	0.087	0.878	0.873	0.087
Three-factor model (LSP + ELA,ELI,LDC)	789.786	165	0.113	0.849	0.829	0.132
Three-factor model (LSP + LDC,ELI,ELA)	679.417	165	0.089	0.873	0.847	0.078
Three-factor model (LSP,ELI + ELA,LDC)	783.336	165	0.113	0.835	0.836	0.098
Three-factor model (LSP,ELI + LDC,ELA)	957.327	165	0.118	0.774	0.768	0.114
Three-factor model (LSP,ELI,ELA + LDC	743.458	165	0.114	0.863	0.842	0.092
Two-factor model (LSP + ELI,ELA + LDC)	1156.736	167	0.131	0.758	0.736	0.112
Two-factor model (LSP + ELA,ELI + LDC)	1489.756	167	0.149	0.669	0.628	0.158
Two-factor model (LSP + LDC,ELA + ELI)	1157.567	167	0.141	0.735	0.717	0.131
Single-factor model (LSP + ELI + ELA + LDC)	1698.547	168	0.171	0.579	0.552	0.135

. It shows that the four-factor has a good predictive model (χ² = 264.454, p < 0.05, SRMR = 0.048, RMSEA = 0.054, TLI = 0.969, CFI = 0.981).

A single-factor test was used for the homologous analysis of variance in this study. The authors executed an unrotated principal component analysis on all items of the four variables: enterprise low-carbon innovation, low-carbon system pressure, executives’ low-carbon awareness and low-carbon dynamic capability. Consequently, we found that the unrotated first factor explained 37.1% of the variance and cumulatively explained 78.5% of the variance. Therefore, the authors believe that there can be no serious problem of variance homology.

4.2. Descriptive Statistics and Correlation

Table 5. Results of descriptive statistics and correlation analysis.

Variable	Means	SD	1	2	3	4	5	6	7	8
CS	2.434	1.078	---
AC	16.726	10.817	0.378 ***	---
CT	0.512	0.417	−0.018	0.041	---
IT	0.418	0.425	0.306 ***	0.218	0.021	---
LSP	3.375	1.084	0.071	−0.086	−0.116 *	−0.009	0.819
LDC	3.412	0.892	0.035	−0.049	−0.065	−0.041	0.389 ***	0.795
ELA	3.621	0.876	0.186 **	0.089	−0.059	0.012	0.279 ***	0.358 ***	0.795
ELI	3.107	0.869	0.051	0.072	−0.135 ***	−0.021	0.418 ***	0.458 ***	0.347 ***	0.768

Notes: (1) Means are measured based on average factor scores; SD means standard deviation; *** p < 0.01, ** p < 0.05, * p < 0.1; (2) The square root of the variable AVE is the number on the diagonal.

describes the standard deviation, correlation coefficient and mean in addition to the square root of the average variance explained (AVE) of the main variables. The mean values of low-carbon system pressure, low-carbon dynamic capability, executives’ low-carbon awareness and enterprise low-carbon innovation were obtained as 3.375, 3.412, 3.621 and 3.107, respectively, while their respective standard deviations were found to be 1.084, 0.892, 0.876 and 0.869. System pressure has a significant positive relationship between low-carbon dynamic capability (r = 0.389, p < 0.01) and enterprise low-carbon innovation (r = 0.418, p < 0.01). Low-carbon dynamic capability was also found to be positively correlated with enterprise low-carbon innovation (r = 0.458, p < 0.01). This provides preliminary support for the subsequent hypothesis testing. Fornell and Larcker [40] proposed that discriminant validity would be satisfied if the square root of the average extracted variance of a variable is higher than the correlation coefficient between the variable and other variables. It can be observed from Table 5 that the correlation coefficients between the variables are all smaller than the square root of the average extracted variance (bold values on the diagonal). This indicates good discriminant validity among the variables.

4.3. Regression Analysis

First, the maximum likelihood and bootstrapping methods were used to test H1 and H2. Second, hierarchical regression and bootstrapping methods were used to test the moderating effect (H3). Finally, we used bootstrapping to test the moderated mediation model (H4).

In this study, the main effects and the mediation effects were tested by using the hierarchical regression method in SPSS22.0. The results of the tests are shown in

Table 6. Regression results of the main effect and the intermediary effect.

Variables	Low-Carbon Dynamic Capacities		Enterprise Low-Carbon Innovation
	1	2	3	4	5
Corporate scale	−0.021	−0.012	−0.029	−0.027	−0.023
Age of the Corporation	−0.041	−0.065	−0.024	−0.037	−0.024
Corporate type	−0.043	0.003	0.079	0.145 **	0.143 ***
Industry type	−0.041	−0.006	−0.142 **	−0.101 *	−0.109 **
Low-carbon system pressure		0.357 ***		0.386 **	0.278 ***
Low-carbon dynamic capacities					0.315 ***
R2	0.617	0.335	0.624	0.247	0.351
Adjusted R2		0.121		0.189	0.136
F	0.967	5.603 ***	3.291 ***	10.451 ***	16.876 ***
VIF	1.423	1.436	1.423	1.435	1.439

Notes: *** p < 0.01, ** p < 0.05, * p < 0.1.

. In particular, the findings of the study indicate that, with the exception of the influence of control variables, low-carbon system pressure has a positive impact on enterprises’ low-carbon innovation (β = 0.386, p < 0.05). Therefore, H1 was validated. In addition to the influence of control variables, low-carbon system pressure was identified to significantly improve the low-carbon dynamic capabilities of enterprises (β = 0.357, p < 0.01). On the basis of Model 4, the low-carbon dynamic capabilities of enterprises were introduced. We found that the impact of low-carbon system pressure on enterprises’ low-carbon innovation has reduced. Furthermore, the impact of enterprises’ low-carbon dynamic capabilities on low-carbon innovation is significantly positive (β = 0.315, p < 0.01). This shows that the low-carbon dynamic capabilities of enterprises play a partial intermediary role between low-carbon system pressure and low-carbon innovation of enterprises. Therefore, H2 was partially validated.

In order to overcome the limitations of a single method and clarify the relationship among the variables, bootstrapping and Sobel tests were used to test the robustness of the mediating effect of enterprises’ low-carbon dynamic capabilities. We set the sample size to 5000 and the confidence interval to 95%. The test results are shown in

Table 7. Robustness test of the intermediary role of low-carbon dynamic capacities.

Mediator Variable	Sobel Test Z-Value	Categories of Effects	Effect Size	Standard Error	95% Confidence Interval
					Lower Limit	Upper Limit
LDC	4.978 **	Indirect effect	0.112	0.031	0.058	0.161
		Direct effect	0.225	0.037	0.142	0.315

Notes: ** p < 0.05.

. Specifically, the results show that the Z value of the Sobel test of enterprises’ low-carbon dynamic capability is 4.978, with p < 0.05. The direct effect value of low-carbon system pressure on enterprises’ low-carbon innovation through low-carbon dynamic capability is 0.225, and the 95% confidence interval is [0.142, 0.315], excluding 0. The indirect effect value is 0.112, and the 95% confidence interval is [0.058, 0.161], excluding 0. Therefore, hypothesis H2 was partially verified. This indicates that low-carbon dynamic capability plays a partial mediating role between low-carbon innovation and low-carbon system pressure.

We used the hierarchical regression method to test the moderating effect of executives’ low-carbon awareness. First, we centralized the data before calculating the interaction terms among the explanatory variables and the moderating variables. Intuitively, this approach can effectively prevent collinearity problems. The results are shown in

Table 8. Executives’ low-carbon awareness moderation effect.

Variables	Low-Carbon Dynamic Capacities
	1	6	7
Corporate scale	−0.021	−0.004	−0.012
Age of the Corporation	−0.041	−0.075	−0.074
Corporate type	−0.043	−0.033	−0.039
Industry type	−0.041	0.016	0.009
LSP		0.293 ***	0.269 ***
ELA		0.317 ***	0.278 ***
LD × ELA			0.153 ***
R2	0.617	0.225	0.244
Adjusted R2		0.193	0.032
F	0.967	9.067 ***	9.293 ***
VIF	1.423	1.434	1.435

Notes: *** p < 0.01.

. Model 6 indicates that low-carbon system pressure has a significant positive impact on the enterprise’s low-carbon dynamic capacity (β = 0.293, p < 0.01). In addition, Model 7 shows that senior executives’ low-carbon awareness plays a tremendously positive role in regulating the relationship between low-carbon system pressure and the low-carbon dynamic capacity of enterprises (β = 0.153, p < 0.01). Thus, H3 was validated.

Moreover, we used the bootstrapping method to test the moderating effect of executives’ low-carbon awareness [41]. The results are shown in

Table 9. Bootstrapping test of moderating effects of low-carbon dynamic capability.

Result Variable	Moderator Variable (ELA)	Effect Size	Standard Error	95% Confidence Interval
				Lower Limit	Upper Limit
LDC	−1SD	0.109	0.067	−0.013	0.234
	Mean value	0.243	0.056	0.151	0.327
	+1SD	0.354	0.049	0.235	0.457

Notes: n = 328, Bootstrap sample size = 5000.

. In particular, when the executives’ low-carbon awareness is at a low level (minus one standard deviation), the regulatory effect value of low-carbon system pressure and executives’ low-carbon awareness is 0.109. At this point, 95% CI is [−0.013, 0.234], including 0. On the other hand, when executives’ low-carbon awareness is at an average level, the regulatory effect value of low-carbon system pressure and executives’ low-carbon awareness is 0.243, and 95% CI is [0.151, 0.327], excluding 0. Similarly, when the low-carbon awareness of executives is at a high level (plus one standard deviation), the regulating effect value on low-carbon system pressure and low-carbon awareness of executives is 0.354, and the 95% CI is [0.235, 0.457], excluding 0. This indicates that the higher the low-carbon awareness of executives, the stronger the positive impact of low-carbon regime pressure on the low-carbon dynamic capability of enterprises. Clearly, the moderating effect of executives’ low-carbon awareness is significant. H3 was verified again.

In order to further confirm the moderating effect in relation to executive low-carbon awareness on the relationship between system pressure and enterprise low-carbon dynamic capability, we substituted the value of executive low-carbon awareness plus or minus one standard deviation into the model. Again, we estimated and plotted the moderating effect, as shown in Figure 2. It can be observed from Figure 2 that in the context of strong low-carbon awareness of senior executives, the positive association between low-carbon system pressure and enterprise low-carbon dynamic capacity is stronger. When the low-carbon awareness of executives is weak, the positive relationship between low-carbon regime pressure and the low-carbon dynamic capability of enterprises becomes weaker. It can be observed that as the awareness of the low-carbon disposition of senior executives changes from weak to strong, the positive impact of the pressure of low-carbon systems on the low-carbon dynamic capacity of enterprises become becomes stronger and stronger.

In order to verify the moderated mediating effect, a bootstrapping test based on Mplus 7.0 was used [41]. We mainly observed that the intermediary effect between enterprises’ low-carbon innovation and low-carbon system pressure becomes stronger when executives’ low-carbon awareness is in a certain state. The results are detailed in

Table 10. Intermediary effect test of the regulatory effect.

Moderator Variable	Direct Effect	Indirect Effect	Total Effect
Strong ELA	0.263 ***	0.124 ***	0.387 ***
Weak ELA	0.192 ***	0.041 *	0.233 ***
Difference	0.071	0.083 **	0.154 *

Notes: (1) n = 328, Bootstrap sample size = 5000; (2) weak ELA represents the mean minus standard deviation, while strong ELA represents the mean plus standard deviation; (3) *** p < 0.01, ** p < 0.05, * p < 0.1.

. More specifically, the findings show that the indirect effect of low-carbon system pressure on low-carbon innovation behavior becomes greater when executives have a strong low-carbon awareness (Δr = 0.124, p < 0.01). However, it is relatively smaller when senior executives have weak low-carbon awareness (Δr = 0.041, p < 0.1). The difference between the above two scenarios is significant (Δr = 0.083, p < 0.05). The 95% CI is [0.009, 0.172], excluding 0. This indicates that the indirect effect of the enterprise’s low-carbon dynamic capability is more obvious in the context of a strong low-carbon awareness of executives. Therefore, H4 was verified.

5. Discussion and Implications

This study designed a holistic model to explore the influential g mechanism of low-carbon innovation among enterprises from three aspects: low-carbon system pressure, low-carbon awareness of executives and low-carbon dynamic capabilities. Through the analysis of 328 questionnaires, this study made the following findings:

First, the regression results show that low-carbon innovation of enterprises under low-carbon system pressure has a significant positive impact. Specifically, the regression coefficient was observed to be 0.386 (p < 0.05). This finding is consistent with a study conducted by Xu et al. [13], who posited that system pressure has a positive role in promoting enterprise green innovation. Basically, system pressure is the external pressure that enterprises must comply with to obtain legitimacy. It is an important driving factor for enterprises to implement low-carbon innovation [6]. According to system theory, when enterprises perceive external low-carbon pressure, they will comply with external regulations in order to obtain legitimacy. They will also be in the position to adapt to external pressure and integrate various resources to carry out low-carbon innovation in order to improve low-carbon and economic performance. System pressure is an important means to promote low-carbon innovation and improve enterprises’ low-carbon performance [42]. Therefore, various low-carbon systems should be gradually implemented in the country. This will encourage enterprises to implement low-carbon innovation.

Second, we found that low-carbon system pressure significantly improves the low-carbon dynamic capability of enterprises (β = 0.357, p < 0.01). Moreover, the influence of low-carbon dynamic capability on the low-carbon innovation of enterprises was significantly positive (β = 0.315, p < 0.01). This empirical study indicates that the low-carbon dynamic capability of enterprises plays a mediating role between system pressure and the low-carbon innovation of enterprises. This confirms a previous study conducted by Xing and Yu [17]. Under severe low-carbon regime pressure, enterprises with strong low-carbon dynamic abilities will be more likely to carry out low-carbon innovation practices. This is because of their strong ability to acquire and restructure low-carbon resources. However, it is difficult for enterprises with weak low-carbon dynamic abilities to effectively transform external system pressure into internal innovation motivation [43]. This study indicates that enterprises’ low-carbon innovation is affected by multiple internal and external factors. Among them, the external pressure of low-carbon regulation is the necessary and effective driving force. Low-carbon dynamic capability is the engine and the fulcrum to transmit the information of enterprises. Moreover, it is only through the cooperation of internal and external factors that the innovation power of enterprises can fully be stimulated.

Finally, this study found that executives’ low-carbon awareness has a significant positive moderating effect on the relationship between low-carbon system pressure and low-carbon dynamic capability (β = 0.153, p < 0.01); this is consistent with prior studies conducted by Xu et al. [13]. In enterprises that attach importance to low-carbon issues, the executives have a strong awareness of low-carbon. This is because executives with a strong sense of low-carbon can effectively convey policy information under the influence of low-carbon regulations. The stronger the executive low-carbon awareness, the more likely they can perceive the pressure transmitted by the governmental low-carbon orientation. In other words, the enterprise is more likely to be able to implement low-carbon innovation activities and align with government expectations [5]. Therefore, in the context of a stronger low-carbon awareness of executives, the pressure of a low-carbon regime has a stronger positive impact on the low-carbon dynamic capability of enterprises.

Compared to prior research, the contribution of this study is mainly reflected in the following: (1) This study advances the relevant research of the ‘weak Porter hypothesis’. Previous research has not addressed the key factors that drive low-carbon innovation decisions in enterprises [44]. Against this framework, the present study focuses on two key influencing factors that affect low-carbon innovation in enterprises: system pressure and executives’ low-carbon awareness. In addition, most literature often lacks an in-depth exploration of executives’ profit-seeking and moral motivations when exploring the key roles played by executive cognition [5]. This study, however, delves into its impact on low-carbon innovation decision-making in enterprises. In effect, the study extends knowledge on the ‘weak Porter hypothesis’ from the perspective of system perspectives, and thus, it helps to obtain a deeper understanding of the driving mechanisms of low-carbon innovation in enterprises. (2) The study expands on relevant materials on the new system theory. In particular, prior studies have focused on analyzing the forced convergence process of organizations under system isomorphism when exploring the impact mechanism of enterprise innovation behavior [13]. However, this study has included low-carbon mimetic pressure and low-carbon regulatory pressure to expand studies on system pressure on enterprise innovation. The present study also considered both low-carbon mimetic pressure and low-carbon normative pressure to broaden the scope of studies on system pressure on enterprise innovation. Moreover, this study argues that enterprises in a system environment will not only be under pressure of convergence but also be attracted to resources and tempted by benefits brought about by system isomorphism. Once a company obtains legitimacy recognition, it can obtain important strategic resources from stakeholders such as the government and customers. This is also a problem that has been overlooked in previous studies that examine how system pressure affects low-carbon innovation in enterprises. Lastly, this study verified the impact of low-carbon dynamic capabilities of enterprises on low-carbon innovation to expand previous research on the relationship between dynamic capabilities and enterprise innovation.

The present study has some important implications for the low-carbon innovation management of enterprises that are facing the implementation of dual carbon policies.

First, from the perspective of innovation strategy, enterprises should attach importance to low-carbon systems. The findings of this study indicate that a low-carbon system, as an important consideration for executives’ decision-making, has the propensity to significantly improve the low-carbon initiatives as well as the economic performance of enterprises if it is given enough attention by executives. On the one hand, corporate executives should closely follow the national low-carbon policy and implement corresponding measures. In particular, enterprises with excessive carbon emissions should take measures to reduce their carbon emissions as soon as possible to avoid paying huge fines due to excessive carbon emissions [45]. For example, the senior management of Chongqing Iron and Steel Company has formulated and implemented proactive low-carbon policies. They can not only avoid fines but also profit by selling carbon emission indicators. Moreover, as the main participant in the strategic decision-making of enterprises, senior executives should appreciate the future of the low-carbon development trend, firmly implement low-carbon policies and design the appropriate low-carbon innovation plans. With the implementation of the national low-carbon goals, more financial support, tax incentives and other policies will emerge. These will eventually pave the way for new opportunities for enterprises to develop. Enterprises must situate themselves on the new development stage, grasp the opportunities of the times and focus on promoting their own low-carbon transformation [46].

Second, enterprises should strive to improve their low-carbon dynamic capabilities. Enterprises need to take the initiative to establish close cooperation with scientific research institutions through continuous search and mining of valuable heterogeneous resources to boost the development of the industry. While focusing on the use of new low-carbon knowledge, enterprises should also actively invest in low-carbon innovation and R&D activities. They should also strive to promote the construction of energy conservation and emission reduction projects and apply low-carbon technologies in their operations. Furthermore, enterprises are encouraged to create an enabling environment that will engender low-carbon initiatives. They should also, as a matter of urgency, design diverse incentive mechanisms that are targeted at whipping up the interest of the workforce in innovation. Moreover, enterprises should keep on improving the organization’s low-carbon dynamic capability as a long-term strategic task to better promote their low-carbon innovation drive.

Third, enterprises should enhance their executives’ low-carbon awareness. On the other hand, executive low-carbon awareness comes from the identification of carbon emission crises and opportunities. Therefore, the government should create a low-carbon production atmosphere and give full attention to the decisive role of resource allocation within the framework of supply and demand. Again, the government should encourage low-carbon consumption, guide the establishment of a low-carbon supply chain, stimulate the virtuous cycle of low-carbon dominated competitive advantage and enhance the low-carbon awareness of corporate executives. On the other hand, low-carbon awareness of executives comes from their own responsibility. Enterprises can cultivate executives’ low-carbon awareness through training, lectures and new media platforms. To this end, companies need to guide executives to pay close attention to the demands of stakeholders such as communities and public welfare organizations and let them take the initiative to regard low-carbon issues as corporate responsibility.

6. Conclusions and Limitations

Drawing upon the upper echelons theory and dynamic power theory, this study presents the variable of executives’ low-carbon awareness and constructs the influential model of low-carbon innovation in enterprises. Against this framework, we selected some Chinese enterprises for our case analysis to conduct our empirical study.

This study explores enterprises’ low-carbon innovation practices from the perspective of multi-level interaction and draws the following conclusions: (1) Low-carbon system pressure has a positive correlation with enterprises’ low-carbon innovation. This indicates that moderate low-carbon system pressure can promote low-carbon innovation in enterprises. (2) Enterprises’ low-carbon dynamic capabilities partially mediate the impact of low-carbon system pressure on enterprises’ low-carbon innovation. Through low-carbon dynamic capabilities, organizations can effectively convey information about low-carbon systems and establish, adjust and restructure their internal and external resources to implement low-carbon innovation. (3) The low-carbon awareness of senior executives positively moderates the relationship between low-carbon system pressure and enterprises’ low-carbon dynamic capabilities. This indicates that the impact of low-carbon system pressure on enterprises cannot be separated from executives’ low-carbon awareness dispositions. (4) Low-carbon system pressure indirectly affects enterprises’ low-carbon innovation through low-carbon dynamic capabilities, which are positively regulated by the executives’ low-carbon awareness. Therefore, the stronger the executives’ low-carbon awareness, the more enterprises tend to take low-carbon measures.

The limitations of this paper are mainly reflected in the following aspects: First, there are limitations in the source of the data used for this study. Specifically, this study only collected cross-sectional data from some selected Chinese enterprises. Therefore, generalization must be done with caution. It is, therefore, recommended that in future research, time series or experimental design data should be used to explore the relationship between variables in more detail. Second, this study confirms that the low-carbon dynamic capabilities of enterprises play a partial moderation role in the relationship between system pressure and the low-carbon innovation drive of enterprises. Future research should, therefore, explore other intermediary variables that can fully reveal the relationship between them. Third, this paper only used four control variables. Future research could deeply explore the personal characteristics of senior executives, the size of the board of directors and the equity system and use them as control variables to explore their impact on the model.