How do incumbent companies’ heterogeneous responses affect sustainability transitions? Insights from China’s major incumbent power generators

Abstract

Transitions research has often been unintentionally biased toward novelty and assumes incumbents as homogeneous groups that are “locked-in” to certain socio-technical regimes. In reality, incumbents are heterogeneous at the company and industrial levels and thus have heterogeneous responses that can both accelerate and deter sustainability transitions. To fill the research gap, this paper explores the determinants of such heterogeneous responses and insights for sustainability transitions, taking China’s major incumbent power generators as its case study. The results are: first, incumbent companies respond heterogeneously if firm-specific, socio-economic, and institutional factors give different opportunities and barriers. Policy feedback effects and development of complementarities in infrastructure, instruments, and organizational elements can increase heterogeneous responses. Second, their heterogeneous responses can accelerate sustainability transitions if they go beyond destabilization of regime, legitimization of alternative policy instruments, and development of infrastructure and institutions that trigger co-evolution with socio-economic and institutional factors.