CEOs' regulatory focus, slack resources and firms' environmental innovation

Abstract To synthesize the literature on upper echelons theory, regulatory focus theory and the resource‐based view, this study examined the relationship of CEOs' regulatory focus, slack resources and firms' environmental innovation. Through the investigation of 191 manufacturing firms in China, we found that a CEO's promotion focus had a positive influence both on the firm's environmental processes and on product innovation, while a CEO's prevention focus had a negative influence. In addition, slack resources moderated the influence of the CEO's promotion focus on a firm's environmental process innovation in a positive way, while also positively moderating the influence of a CEO's prevention focus on a firm's environmental product innovation. Our results indicated that firms could deploy resources based on the CEOs' regulatory focus to facilitate firms' environmental innovation.