How to Achieve Sustainable Development in the Industry? Inﬂuence of Listed Firms in Environmental Strategy

. The relevant literature on environmental strategy has carried out extensive research on the internal and external factors that a ﬀ ect the sustainable development of enterprises, but some important horizontal factors, such as the inﬂuence from peers, are ignored. Based on benchmarking theory and expectation theory, this paper makes an empirical analysis on the panel data of Listed Companies in 24 industries in China from 2001 to 2019. The results show that the number of Listed Companies in the industry has a positive impact on the passive and active environmental strategies of the whole industry. The outstanding performance of peers promotes the whole industry to actively implement the active environmental strategy and reduce the passive environmental strategy. At the same time, the longer the listing time of the listed companies, the more able the companies to strengthen the impact of the number of listed companies on the implementation of active or passive environmental strategy in the whole industry, and the smaller the relative scale, the more able the companies to strengthen the impact of performance on the implementation of active environmental strategy in the whole industry.


Introduction
The effective corporate environmental strategy has become one of the decisive factors for the sustainable development of enterprises. In the past 20 years, researchers have paid more and more attention to how to improve corporate performance and long-term development by implementing excellent environmental strategies. Therefore, what factors drive enterprises to implement environmental strategy has become the interest of scholars [1]. In the past, scholars have focused on the internal and external factors of enterprises, among which government environmental regulation is the most commonly examined external factors [2,3]. At the same time, stakeholders including customers, suppliers, and NGOs also play an important role in shaping corporate environmental strategies [4]. On the other hand, internal factors such as executives' management attitude, implementation motivation [5,6], and profit performance drive [7] have different impacts on corporate environmental strategy. In addition, some scholars have studied the impact of the interaction between internal and external driving factors [8,9].
Although scholars have conducted extensive research on the antecedents of environmental strategy, they have ignored some important lateral factors, namely the influence of peer companies. The institutional theory holds that, to better adapt to environmental uncertainty, firms tend to imitate the norms and practices of benchmark firms [10]. That is to say, when a benchmark enterprise adopts an environmental strategy under a certain premise, other companies in the same industry will also try to follow it [1]. Therefore, the difference in the degree of pollution of enterprises and the difference in environmental regulation of local governments constitute the basic factors that affect the implementation of environmental strategies in the industry. In addition, according to the perspective of stakeholder theory and competitor analysis, due to the homogeneity of the market and the similarity of corporate resources, companies often pay attention to the behavior of peer benchmarking companies [11] and make decisions about their environmental strategic behavior reaction. When environmental issues become a key variable affecting the future sustainable development of enterprises, enterprises are likely to learn, imitate or collaborate [9,12], and finally, make active or passive environmental strategies.
Theoretically, few scholars have studied what environmental strategies the industry implements when influenced by peers. The important reason is that it is difficult to identify them, and it is difficult to determine the unit and level of analysis. From a practical point of view, it is feasible to explore how the industry is affected by listed companies in terms of environmental strategy which has strong practical significance. When companies face government regulation, stakeholder pressure, or performance continues to decline, companies will respond differently [8]. Specifically, listed companies have high reputations and open environmental information disclosure. They have certain technical capabilities or financial support to actively implement environmental strategies to meet the interests of stakeholders [13], so as to obtain higher environmental performance and economic performance. On the one hand, other companies in the industry may follow the benchmark companies to implement active environmental strategies, and on the other hand, they may adopt passive environmental strategies due to government regulation, inter-industry competition and pressure from stakeholders. This research will use the public data of listed companies, including the number and performance of listed companies, to conduct relevant analysis, and study what environmental strategies the industry will implement due to its impact. In addition, the length of time a listed company has been listed, that is, the age at which it is listed, and the relative size of unlisted and listed companies in the industry may have a certain impact on the industry's implementation of active or passive environmental strategies. Finally, this study also analyzes the moderating effects of the age and relative size of the listed companies on the number of the listed companies and their performance that affect the industry's implementation of active or passive environmental strategies. Therefore, the second section of this paper is theoretical analysis and hypotheses formulation. The active and passive environmental strategies of the industry are distinguished, and the influence of the number of listed companies and the performance of listed companies on the implementation of environmental strategies of the industry is explored based on the moderating effect of the age and relative size of listed companies. The third section is about data and methodology. The data samples were collected, and variables were defined and measured. The generalized estimation equation (GEE) regression method was used for data analysis, which can solve the autocorrelation problem by estimating the correlation structure of the error terms. The fourth section is the empirical results. First, descriptive statistics and correlation analysis of the data results were carried out, and then GEE regression analysis and robustness analysis were carried out. The fifth section is the conclusion and implications.

Proactive and Passive Environmental Strategies
Based on the existing environmental strategy literature, this study distinguishes between active and passive environmental strategies in the industry [14,15]. Active environmental strategies aim to prevent pollution, adopt advanced environmental management systems, and make environmental protection behaviors that exceed legal requirements [15], such as actively setting environmental protection goals, improving environmental technologies, innovating environmental protection products, and investing in environmental protection equipment. The passive environmental strategy adopts the pollution control method at the end of the environment and focuses on the clean-up after the problem occurs, including the use of biochemical systems for water pollution treatment, the use of air treatment barrier systems, and waste treatment methods to deal with government legal regulations, and benefits from Stakeholder pressure [16]. On the one hand, listed companies with technical capabilities adopt an active environmental strategy, which can not only reduce costs, reduce waste, meet the requirements of government environmental regulations, and improve the economic performance of enterprises, but also obtain and maintain their environmental performance through the improvement of environmental performance. Competitive advantage [17]. If non-listed companies follow listed companies to implement active environmental protection strategies with the same technical capabilities, the industry may achieve environmental sustainability in the future. On the other hand, the active environmental strategy requires enterprises to actively implement a series of behaviors such as setting environmental protection goals, upgrading environmental protection technology, investing in environmental protection equipment, and innovating environmental protection products, which can establish a good green image of the company and improve its reputation. A good corporate image and reputation will enhance employees' loyalty, participation, and enhance employees' trust in the organization [18]. This trust and satisfaction will drive employees to continuously contribute to the sustainable development goals of the company effort. Therefore, the outstanding performance of peers in the industry may influence private companies to invest more in production processes and product innovation to acquire the capabilities needed to implement proactive environmental strategies that will enable private companies to achieve environmentally friendly long-term sustainability [19].

The Impact of the Number of Listed Companies on the Implementation of Environmental Strategies in the Industry
Listed companies have always been regarded as models of social responsibility, the necessity of fulfilling environmental responsibility, and the active promotion of government advocacy and social responsibility needs, listed companies are more likely to implement proactive environmental strategies. On the other hand, non-listed companies can obtain the active environmental strategy information clues of listed companies from public channels, so that they realize that the cost of not considering environmental issues may be very high [20]. The number of listed companies in the industry determines whether private companies adopt environmental strategies. First of all, listed companies play a pivotal role in the national economy and have strong competitiveness. To a certain extent, they have a strong market-oriented role.
As a benchmark, they may change the perception of managers of non-listed companies to a certain extent and affect the proactive environmental strategies. Therefore, as the number of listed companies increases, even if the environmental strategy may bring certain environmental cost pressures, non-listed companies are still willing to follow their environmental strategy.
Second, the interest orientation of stakeholders drives non-listed companies to implement environmental strategies, because stakeholders can easily obtain environmental management and performance information disclosed by listed companies through public channels, they may exert environmental pressure on non-listed companies, and non-listed companies will respond to peer benchmarking by adopting passive and active environmental strategies and meet stakeholder expectations that non-listed companies with technical and financial support may adopt active environmental strategies, innovate products and processes, and achieve sustainable corporate development. Other non-listed companies are more inclined to a passive environmental strategy, the reason is that they only meet the basic requirements of stakeholders due to a lack of technology and funds [21]. Third, from the perspective of information transmission, the benchmarking role of listed peers enables unlisted companies to increase passive or active environmental strategies. With the increase in the number of listed companies in the industry, more environmental-related information will be passed on to non-listed companies, benchmarking listed companies, and non-listed companies will adopt passive or active environmental strategies to make the industry more environmentally friendly. Therefore, this study proposes the following hypotheses: Hypotheses 1a. The bigger the number of listed companies, the more passive environmental strategies the industry implements.
Hypotheses 1b. The bigger the number of listed companies, the more proactive environmental strategies the industry implements.

The Impact of Listed Company Performance on the Implementation of Environmental Strategies in the Industry
Due to the relatively strong awareness of environmental protection among managers of listed companies, and the companies possessing relevant technology, knowledge, and financial capabilities, they are more likely to adopt proactive environmental strategies. For example, in accordance with the requirements of environmental regulations to improve its pollution discharge standards, actively develop pollution control technologies, products, and equipment to grasp the dominance of industry development, establish industry standards, and gain competitive advantages, thereby improving the status of enterprises in industry competition [22]. Therefore, the most direct competitive advantage of listed companies is reflected in the significant improvement of their economic performance and environmental performance. According to expectation theory, when faced with behavioral choices, people choose a way that maximizes expected utility [23]. Therefore, the performance of listed companies has a significant impact on which environmental strategies non-listed companies adopt. First, when listed companies implement active environmental strategies, achieve better economic performance and environmental performance, and achieve a win-win situation, non-listed companies have high expectations for this, and even in uncertain and difficult situations, they still actively implement the active environmental strategies. Second, according to previous studies on environmental strategy, regulatory mandates, and stakeholder pressures have different effects on firm performance. The former is satisfied with basic pollution control, with less investment and less impact on performance, while the latter requires companies to improve a series of activities, including process reengineering, product innovation or cleaner production, etc., which will inevitably have a short-term impact on corporate performance certain influence. However, in the long run, an active environmental strategy can enable enterprises to obtain long-term competitive advantages, including the improvement of economic performance and environmental performance, and ultimately environmental investment may achieve sustainable development of enterprises in the future. Passive environmental strategies only meet the requirements of regulations, which may not be conducive to the long-term development of 4 enterprises in the future. Therefore, when the financial status of the listed companies is better, under the circumstance of greater competition pressure, unlisted companies may strengthen active environmental strategies to obtain better competitive advantages to deal with potential threats [16]. Third, when active environmental strategies become consistent among their peers, companies that adopt passive environmental strategies will lose their competitive advantage. Therefore, on the one hand, non-listed companies are under pressure to adapt to the current overall environmental regulatory requirements. At this time, non-listed companies have to adopt passive environmental strategies to cope with the pressure. On the other hand, the potential advantages that may be obtained by adopting active environmental strategies, that are, investment in environmental protection may help non-listed companies to obtain sustainable competitive advantages [24]. Therefore, according to expectation theory, in the case of higher utility and higher expectation, the industry is more inclined to adopt active rather than passive environmental strategies to improve performance. This study proposes the following two hypotheses: Hypotheses 2a. The performance of the listed companies is better, and the industry will reduce the implementation of passive environmental strategies; Hypotheses 2b. The better the listed companies perform, the more possible that the industry will increase the implementation of proactive environmental strategies.

The Moderating Effect of Age of Listed Companies
Over the past 30 years of reform and opening up, China's economy has maintained rapid economic growth in the course of transformation. The strength of listed companies has continued to increase, and the number of companies in the industry that have entered the world top 500 has continued to increase. The transformation of China's economy from extensive to intensive has made the media, the public, and government departments pay more and more attention to the company's environmental problems. On the one hand, for a listed company that has done a good job in environmental protection, the longer its listing time, the stronger the positive signal it sends to unlisted companies, indicating that companies that attach importance to environmental protection still maintain rapid growth and can achieve long-term sustainability. The competitive advantage has prompted other companies in the industry to follow suit, and the industry implements active environmental strategies. On the other hand, the government's recognition and commendation of listed companies with excellent environmental protection, large-scale media coverage, and public word-of-mouth communication will greatly improve the company's reputation [25]. Therefore, through the improvement of publicity and reputation, listed companies influence other companies in the industry to actively or passively follow their implementation of environmental strategies, expecting to improve the company's economic performance and environmental performance through the implementation of environmental strategies in the future. Therefore, the longer a listed company has been listed, the more signals it sends to non-listed companies, promoting companies in the industry to implement active or passive environmental strategies. That is the age of listed companies moderates the impact of the number of listed companies on the implementation of environmental strategies in the industry. This study proposes the following hypotheses: Hypotheses 3a. There is a positive relationship between the age of listed companies and the implementation of active environmental strategies in the industry, and the longer the listing time, the more possible that the industry implements active environmental strategies; Hypotheses 3b. There is a positive correlation between the age of listed companies and the implementation of passive environmental strategies in the industry, and the longer the listing time, the more possible that the industry implements passive environmental strategies.

The Moderating Effect of Relative Scale
Changes in China's business environment and the improvement of overall environmental awareness have made local governments not only focus on GDP growth in the past, but urgently pay attention to the sustainable development of the local economy. To protect the environment while developing [26], listed companies in the industry may increase environmental spending in environmental investment. In addition, the media and the public are paying more and more attention to the environment, requiring listed companies to assume greater social responsibility and proactively disclose environmental-related information, making it easier for non-listed companies to obtain environmental protection behaviors of listed companies' related data [27]. The relative size of listed companies and non-listed companies will moderate the impact of listed companies' performance on the implementation of environmental strategies in the industry. In research related to environmental strategy, the relative size of a company is related to its power and popularity in the market. Some scholars believe that larger companies can undertake more investment in environmental activities and have cost advantages [28], while others believe that smaller companies also adopt environmental strategies to deal with stakeholder pressure [29]. On the one hand, affected by the incentives and performance growth of listed companies in the same industry, relatively small-scale enterprises are more inclined to adopt active environmental strategies when they can adopt environmental strategies, in order to obtain better competitive advantages, that is, the industry is easier to implement the active environmental strategy. On the other hand, although the performance of listed companies in the industry has grown, although relatively large-scale companies have the willingness to adopt active environmental strategies, due to poor performance expectations, their awareness and motivation to adopt active environmental strategies will be reduced due to low expectations weakened, that is, the industry is more likely to adopt passive environmental strategies. Therefore, this study proposes the following hypothesis: Hypothesis 4a. There is a negative relationship between the performance of the listed companies and the implementation of passive environmental strategies in the industry, and the smaller the relative scale, the less possible that the industry implements passive environmental strategies; Hypothesis 4b. There is a positive relationship relationship between the performance of listed companies and the implementation of active environmental strategies in the industry, and the smaller the relative scale, the less possible that the industry to implement proactive environmental strategies. Based on the above theoretical derivation, the conceptual model of the empirical results of this study is shown in figure 1:

Data Collection and Samples
The primary data of this study come from China's National Bureau of Statistics (NBSC) and the China Stock Market and Accounting Research (CSMAR) database. In order to investigate the influence of listed firms on the environmental activities of industries, we focus on 24 highly polluted industries divided by China's ministry of environmental protection, which are reported in the Appendix, table 1. We collect panel data from 2001 to 2019 considering the availability of data. All of the industry-level data are collected from NBSC. The data of listed firms come from the CSMAR database, a leading database for the Chinese stock market and listed firms that provide us with financial information on Chinese listed firms.
Based on the above theoretical derivation, the conceptual model of the empirical results of this study is shown in Figure 1:

Data collection and samples
The primary data of this study come from China's National Bureau of Statistics (NBSC) and the China Stock Market and Accounting Research (CSMAR) database. In order to investigate the influence of listed firms on the environmental activities of industries, we focus on 24 highly polluted industries divided by China's ministry of environmental protection, which are reported in the Appendix, Table 1. We collect panel data from 2001 to 2019 considering the availability of data. All of the industry-level data are collected

Measurement and Definition of Variables
To control for industry heterogeneity, we use the generalized estimating equations (GEE) regression method, which can estimate the correlation structure of the error terms to solve the problem of autocorrelation, due to repeated yearly measurements of the same industries [30].
(1) Dependent variables In this study, two dependent variables are involved. One is Passive environmental innovation (passive), which is measured as expenditures of technical renovation on environmental abatement. The other is Proactive environmental innovation (proactive), and we employ spending for new products as the proxy variable [31], [32]. Two of these variables are taken from the China Statistical Yearbook on Science and Technology. A natural logarithm is adopted to eliminate the dimensions effects of different variances.
(2) Independent variables Two independent variables are the number of listed firms (number) and the excess performance of listed firms (performance). The number is measured by a weighting factor of total assets because the influence of firm A with one billion total assets is different from firm B with one million total assets. Specifically, we calculate the weighting factor of a listed firm each year by the percentages of its total assets on the average level of the industry. Performance is measured as the difference in average profits between listed firms and the whole firms in some industries. Also, a natural logarithm is adopted in these two variables to eliminate the dimensions effects of different variances. (

3) Moderating variables
In this study, two moderators from listed firms' characteristics are chosen to investigate their moderating effects on the two main relationships respectively. The age of listed firms (age) means the age of listing, which is calculated like the number of listed firms by a weighting factor of total assets. The relative scale (re s cale) is defined as the relative scale between listed firms and the whole firms in some industry. We measure re s cale using the ratio of the average assets of listed firms to the average level of the whole industry. will often influence firms' innovation investment [34]. History performance (HP) is the profit rate of last year. The current ratio (CR) is the ratio of liquid assets to liquid liabilities. Slack resources (Slack) are also an accounting variable calculated by the ratio of gross industrial production to total sales, measuring firms' ability to adjust to influence their innovation activities [35]. Third, we use industry growth to measure the increasing competition, which is measured as the growth rate of firm quantity in the whole industry [36]. Then, we control the proportion of state-owned enterprises (Nature) which may influence firms' innovation activities in a given industry [37]. Finally, the environmental regulation from the government is important in this research. Before the year 2007, the main means of pollution control in China was command-control policy, such as setting pollutant emission standards, rectification deadlines and closing pollution-intensive firms. After 2007, the Chinese government has begun to change environmental policies from compulsory measures to market-related policies [38]. For example, they issued "Regulation Enforcement of Export Companies' Environmental Protection" in 2007, and the "National Environmental Protection Twelfth Five-year Plan" in 2011. Such a policy shift will affect firms' environmental innovation strategies [26], [39]. We control for this by using a dummy variable-Environmental Regulation (ER). For years before 2007, we make this variable equal to 0, and 1 otherwise. Year dummy and industry dummy variables are included in each model. Table 1 shows the variable value method and description for each variable.  Table 2 presents the descriptive statistics and the correlation coefficients of all variables used in the regression analysis. The correlations preliminarily show that there is a positive correlation between the number and passive, number and proactive, a negative correlation between performance and passive, but an uncertain correlation between performance and proactive. The correlations between most variables are not high, except for the correlation between LA and RS (0.79), which is high enough to suggest a multicollinearity problem. However, a robust test indicates that the highest variance inflation factor is 5.44, lower than the critical threshold value of 10, which suggests that the empirical results are not influenced by this cross-correlation [39].   These results support the arguments that the more the number of listed firms is, the more the investment in passive environmental innovation is, and the excess profits of listed firms motivate other firms not to spend more on passive environmental innovation. These results are consistent in four models which indicates that our findings are robust. In addition, two interactions are added to Model 3 and Model 4 respectively, which shows that the interaction between age and quantity is significantly positive(β = 0.388, P < 0.01), the interaction between relative scale and performance is positively correlated(β = 0.03, P < 0.05). That is, the longer the listed companies are listed, and the more the number of listed companies is, the more likely the industry is to implement the passive strategy ( figure 2). The listing firm's scale is close to the industrial scale, that is, the smaller the relative scale, the higher the performance of listed companies and the less likely the industry is to implement the passive environmental strategy ( figure 3). Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Figure. 2: Moderating effect of age on the number and industries implementing passive environmental strategies.   Table 4 presents the empirical results for the effect of number and performance on proactive environmental innovation. Independent variables are also specified in 1-year lagged forms considering the endogeneity problem. The baseline model 1 shows that number has a positive influence on proactive (β = 0.302, P < 0.05), and performance also has a significant and positive influence on proactive (β = 0.113, P < 0.01). The results are consistent throughout all models even when the interactions are added. These results support our arguments that the more the number of listed firms is, the more the investment in proactive environmental innovation is, and the excess profits of listed firms encourage other firms to invest more in proactive environmental innovation. Then, two interactions are added in model  Table 4 presents the empirical results for the effect of number and performance on proactive environmental innovation. Independent variables are also specified in 1-year lagged forms considering the endogeneity problem. The baseline model 1 shows that number has a positive influence on proactive (β =0.302, P<0.05), and performance also has a significant and positive influence on proactive (β=0.113, P<0.01). The results are consistent throughout all models even when the interactions are added. These results support our arguments that the more the number of listed firms is, the more the investment in proactive environmental innovation is, and the excess profits of listed firms encourage other firms to invest more in proactive environmental innovation. Then, two interactions are added in model 3 and model 4, respectively. The interaction of age and number is significantly positive (β= 0.457, P < 0.01), and the interaction between relative size and performance is significantly negatively correlated(β= -1.485, P ＜ 0.01). That is, the longer the listed companies are listed, the more the number of listed companies is, and the more likely the industry is to implement active strategies ( Figure 4). The listing scale is close to the industrial scale, that is, the smaller the relative scale, the higher the performance of the listed company, and the greater the possibility of the industry implementing the active environmental strategy ( Figure 5).

Conclusions and Implications
To promote the green development of the industry and the sustainability of environmental protection, previous studies have focused on the antecedents of companies adopting environmental strategies from the perspective of internal and external factors, without considering the influence of peers in the industry. The conceptual framework of industry sustainable development proposed by this study is an important basis for improving China's industry sustainable development strategy in the future. Listed companies release information about environmental strategies and performance as benchmarks, which stimulates the motivation of other companies in the industry to implement environmental strategies, prompting them   to make active or passive environmental strategies, thereby driving the industry to implement environmental strategies and realizing the future sustainability of the industry develop.
The study found that, first, for industries with more listed companies, companies in the industry invested more overall in active and passive environmental strategies; second, when listed companies in the industry performed higher, non-listed companies in the industry. The company's active environmental strategy investment will increase, while the passive environmental strategy investment will decrease; third, the longer the listed company's age, the more it can enhance the influence of the industry with a large number of listed companies on the implementation of active and passive environmental strategies in the industry; fourth, the better the performance of listed companies in the industry, the less the industry implements passive environmental strategies. When the relative scale of unlisted companies and listed companies is smaller, this action is reduced, and the better the performance of listed companies in the industry, the less the industry. Greater implementation of proactive environmental strategic behaviors, on a relatively small scale, will enhance such actions.
companies in the industry can achieve improved efficiency and sustainable development by implementing active environmental strategies rather than passive environmental strategies. At the same time, this study has some limitations. First, this study only examines the process of the impact of relevant information of industry peers on the implementation of environmental strategies by other companies in the industry. Future research can further examine the overall relationship between industry peers-environmental strategy-environmental performance. Second, research in this paper, R&D investment and environmental governance expenditure is used to measure the active and passive environmental strategies of enterprises. There may be two problems. One is that it cannot fully reflect the environmental strategy of enterprises. There are great differences in the use of innovation investment as an environmental protection strategy, and R&D investment as an innovation indicator may also produce measurement bias, so future research can find more appropriate proxy variables to reduce this measurement bias. Scholars can continue to explore these limitations more deeply in future research. Thirdly, this study focuses on the influence of the characteristics and behaviors of listed companies in the industry on non-listed companies in the industry, so as to affect the results of the implementation of environmental strategies in the industry, without considering the possible influence relationship between industries. Future research can expand the related content in this aspect.