Moving to the Next Strategy Stage: Examining Firms' Awareness, Motivation and Capability Drivers in Environmental Alliances

Complementing extant studies on the antecedents of firms' environmental strategy, this article focuses on the trajectories of corporate engagement in proactive environmental alliances. Specifically, we build an awareness–motivation–capability framework and analyze factors that drive the move beyond incremental pollution prevention and facilitate firms' engagement in transformative, sustainable development strategies in their alliances. Based on 212 environmental alliance‐related observations, our test results indicate limited explanatory power of regulatory pressures, but highlight the role of firms' environmental networks to sharpen their awareness to engage in transformative alliances. Further, we elaborate on the nuances and boundary conditions of firms' risk‐taking propensity, industry concentration, financial capacity and especially prior sector‐spanning experiences as motivation and capability drivers. These insights contribute to the discourse on firms' environmental strategy and alliance formation by depicting how and to what extent environment‐specific and more general firm attributes predispose them to engage in transformative rather than incremental environmental projects.