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Abstract This study investigates the underlying mechanisms through which proactive environmental strategy develops organizational capabilities. The results of a survey of publicly listed companies in China reveal that proactive environmental strategy has a more positive influence on stakeholder integration capability than on innovation capability. Moreover, organizational learning plays a greater role in mediating the effect of proactive environmental strategy on innovation capability than on stakeholder integration capability, whereas cross‐functional coordination plays a greater role in mediating its effect on stakeholder integration capability than on innovation capability. These findings provide important implications on organizational capability building via proactive environmental strategy.
Yang et al. (2019) studied this question.