Critical Factors Influencing the Evolution of Companies’ Environmental Behavior: An Agent-Based Computational Economic Approach

Abstract

Although a wealth of studies on companies’ environmental behavior exists, little is known about the factors with the greatest influence on the evolution of such behavior. Thus, employing empirical data on China and an agent-based simulation model, this study examines the evolution from defensive to preventive environmental behavior. The results show that community support is the most important factor in this process, followed by managers’ environmental awareness and companies’ financial ability. However, financial ability is the most significant factor in the evolution from preventive to enthusiastic environmental behavior, followed by managers’ environmental awareness and community support. Our identification of the most important factors can serve as a basis for decision makers to focus on improving the operational effectiveness of environmental policies.