Technological peer pressure and corporate sustainability

In this paper, we investigate the relationship between technological peer pressure (TPP) and corporate sustainability performance. Studying 1536 firms in the United States for the period 2002 to 2021, we provide strong and robust evidence that corporates’ environmental and social performance have a negative effect on technological peer pressure. Our empirical findings support the view that resource constraints and agency problems serve as channels in this relationship. Additional analyses reveal industry heterogeneity of this relation that the negative impacts are stronger in the firm with high research and development (R&D) intensity, in high-tech industries, non-customer-facing sectors and “green” industries. In summary, our results highlight the importance of technological competition in the product market in the knowledge-based economy and firms’ sustainability strategies in competitive industries.