How and When Do Green Strategies Enhance Environmental and Financial Performance? Evidence From Emerging Economies

Drawing on resource‐based view and institutional perspectives, this study investigates how and under what conditions green strategies—reactive green strategy (RGS) and proactive green strategy (PGS)—and market learning (both exploitative and explorative) independently and interactively promote firms' performance—environmental performance (EP) and financial performance (FP). Using a multi‐informant dataset of 310 Chinese firms, the findings indicate that RGS has a stronger positive effect on EP than on FP, whereas PGS demonstrates a stronger positive impact on both performances. The results further reveal that firms with RGS benefit more from exploitative than from explorative market learning for improving EP, not FP. Similarly, firms with PGS benefit more from explorative than from exploitative market learning for improving both EP and FP. Overall, these findings add value to current business strategy and sustainability literature regarding how and under what conditions distinct green strategies shape firms' EP and FP outcomes.