Business Strategy for a Greener Future: How Entrepreneurial Cognition and Networks Drive Environmental Innovation Diffusion

Abstract

ABSTRACT Despite growing recognition of environmental challenges to sustainability, the diffusion of green innovation within entrepreneurs' social networks remains uneven, and the mechanisms by which entrepreneurial decisions are disseminated within these networks have not received sufficient attention. Therefore, this research aims to fill a key gap in environmental strategy studies and to explore the dissemination of green innovation within the entrepreneurial ecosystem. Drawing on data from 570 entrepreneurs, we used Gephi to construct a diffusion network and compared its characteristics with those of random and scale‐free networks using a Python‐based simulation. Python simulations with node‐removal tests reveal that lower perceived uncertainty, recognition of green value and strong social norms speed up diffusion. By integrating entrepreneurial cognition, diffusion theory and social network analysis, this study has deepened the understanding of the formation and dissemination mechanisms of sustainable business strategies within entrepreneurial groups. Our research findings indicate that entrepreneurial cognition (particularly the reduction of uncertainty and value cognition) plays a much greater role in shaping the dissemination of environmental strategies than does the network structure. The research results provide practical insights for policymakers, incubators and ecosystem designers, helping them accelerate the transition to environmentally sustainable business models.