The good, the green and the costly: understanding the limits of environmental strategies in industrial clusters

Purpose This paper aims to examine how proactive environmental strategies and environmentally related relationships influence competitive advantage among firms in the Spanish ceramic tile cluster of Castellón. Design/methodology/approach The authors surveyed a population of 189 firms in the Spanish ceramic tile cluster and obtained 71 valid responses. They were able to measure competitive advantage, proactive environmental strategy (PES) and environmentally related relationships (ERR) with Likert scales. Hierarchical and quadratic regression models tested linear and nonlinear effects of PES and ERR on competitive advantage, controlling for size and subsector. Findings The results show a positive relationship between PES, ERR and competitive advantage. Additional quadratic analyses reveal partial and suggestive evidence of diminishing returns, especially for PES. These effects become clearer in robustness checks using principal component scores, but they are not fully consistent across all specifications. Research limitations/implications The results are based on a single cluster and do not differentiate among value-chain actors, suggesting that future research should explore other contexts and actor types. Practical implications Managers and policymakers should support environmental initiatives while monitoring whether additional environmental investments continue to generate competitive benefits. Social implications Clarifying the potential limits to green returns can help design more efficient environmental policies and collaborative schemes in industrial clusters. Originality/value This study integrates resource-based and cluster literatures to show that the strategic benefits of “being green” in an industrial district are bounded, thereby reconciling mixed prior evidence on environmental proactivity and performance. It highlights the need to understand the limits and marginal returns of internal and relational environmental efforts.