Findings

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45 has to first gain experience in CSR over a longer period, for internal as well as external actors, to recognize the responsible nature of the firm and to impact their behavior (Barnett, 2007).

Similarly, a firm might have to demonstrate some experience with GI first, for it to be recognized by internal and external stakeholders.

Having causal mechanisms that best materialize over a longer period, it becomes relevant what structures the company is embedded in, as they impact the long-term relationship (Shu et al., 2020). Hereby, precisely the welfare regime structures appear to play a crucial role.

Considering the long-term horizon of the GI-FFP mechanisms, firms are to be provided with ongoing support and predictability (Del Río et al., 2010). Additionally, the risk for investors has to be limited when investing in a long-term relationship (Aguilera-Caracuel & Ortiz-de-Mandojana, 2013). Thus, state interventions beyond mere regulations are needed to provide support for the firms and certainty for the investors (Aguilera-Caracuel & Ortiz-de-Mandojana, 2013; Shu et al., 2020). Thereby, liberal welfare state regimes demonstrate low levels of state intervention while social democratic ones display relatively high levels. As proposed by the hypotheses, the results illustrate that liberal welfare states moderate the GI-FFP relationship negatively, and social democratic ones moderate the relationship positively.

Second, the welfare state regime structures appear to impact the stakeholder theory related mechanisms between GI-FFP in additional ways. While GI is said to potentially improve the relations between internal as well as external stakeholders, thereby strengthening FFP, the welfare state regimes seem to significantly moderate this relationship. First, strong welfare states are said to provide social capital between internal and external stakeholders of a firm, fostering trust and mutual relations (Huang & Li, 2017; Kääriäinen & Lehtonen, 2006). Second, they improve employee commitment, as the perceived usefulness of work increases (Kjeldsen

& Andersen, 2013; Muhammed et al., 2015). Third, the reputation mechanism is also moderated. Studies illustrate that social democratic welfare states demonstrate the highest level of positive attitudes towards eco-innovation and liberal welfare states the least positive attitudes

46 (Cooke, 2011; Marquart-Pyatt et al., 2019). Consequently, it could be argued that strong welfare states displaying greater eco-preferences positively moderate the relationship between GI and FFP, as they strengthen the market evaluation of green innovative firms. In sum, liberal welfare states are categorized to be relatively weak, supporting the hypothesis that they have a negative moderating effect. On the contrary, social democratic regimes are categorized as strong welfare states, illustrating positive moderating effects as hypothesized.

However, while conservative/corporate welfare state regimes are indeed located between the other regimes as hypothesized, their results illustrate a weaker negative, instead of a weaker positive moderating effect. There are several possible explanations for this. First, it might be argued that next to the level and form of state intervention, another welfare state regime specificity impacts the relationship, where conservative/corporate welfare state regimes are closer to liberal than social democratic welfare states. This aspect will also further be discussed in the section on future research recommendations. Second, insights of the literature on comparative research concerning welfare state regimes suggest that conservative/corporate welfare state regimes have undergone several policy retrenchments in the last twenty years (Hemerijck, 2018; Taylor-Gooby et al., 2017). Thereby, states such as Germany have established reforms in various societal sectors, reducing the degree of state support and intervention. Indeed, authors propose that the conservative/corporate welfare states are becoming more like liberal welfare state regimes in some regards (Nelson, 2016; Taylor-Gooby et al., 2017; Wilensky, 2012). This could be a possible explanation for the lighter but negative moderating effect of conservative/corporate regimes.

Thus, the welfare state regime structures appear to have a two-fold moderating impact.

First, they affect the long-term relationship between GI-FFP, either allowing it to flourish or hampering it depending on the level and form of state intervention. Second, welfare state structures influence the stakeholder relationships, again, either positively or negatively moderating them depending on the welfare state strength.

47 Third, turning to the findings regarding firm internationalization, other moderating aspects seem to be at play. Increased internationalization negatively moderates the GI-FFP relationship and not positively as proposed in the hypothesis. It could be argued that a significant aspect impacting the proposed causal mechanisms is the fact that all firms are located in developed countries. A key argument suggests that strongly internationalized firms navigate various institutional contexts, inducing them to higher levels of international scrutiny and regulations, which push the firms to improve their GI in order to gain legitimacy (Bermúdez-Edo et al., 2017; Marano & Kostova, 2016; Tashman et al., 2019). Thereby, the reputation of the firm is strengthened as well as its GI quality, consequently improving FFP. However, as all firms have their headquarters established in the European Union before and during the timeframe of the analysis from 2014-2019, representing a region with high levels of scrutiny, their internationalization might not introduce them to greater but lower levels of regulation.

That could in turn reduce the incentive to strengthen GI in the international arena, therefore having a negative moderating effect.

A similar line of argumentation applies for the proposed causal mechanism that suggests firm internationalization increases the possibilities to explore and source alternate production processes, thereby gaining knowledge and improving quality standards, which lead to greater FFP (Bermúdez-Edo et al., 2017; Hsu & Pereira, 2008; Tashman et al., 2019). As the firms are located in developed nations, they might be less inclined to learn from other regions in the world. Introducing the concept of Eurocentrism, other fields of academic research demonstrate how knowledge and practices from Europe are perceived to be superior, limiting global interest (Bilgin, 2010; Caserta, 2021; Nowak, 2021). However, while Western- and Eurocentrism is increasingly discussed and critically assessed in other fields of academic research, it seems to be lacking from business scholarship. Indeed, these aspects will all be taken up again in the section concerning future research recommendations. The considerations are not yet based on

48 empirical studies, making the negative moderation of firm internationalization and its proposed interplay with the level of national development a crucial steppingstone for future investigation.

Hence, the findings on the GI-FFP relationship as well as the moderating effects of welfare state regimes and firm internationalization further the ongoing debates, thereby demonstrating to be academically relevant in multiple ways as discussed beneath.