Non-market Strategy in Competitive Contexts: Carbon Performance and Firm Value

Firms increasingly face pressure to create both market and societal value, making non-market strategies central to sustaining competitive advantage. In the context of rising demands for corporate carbon management, prior research has examined the relationship between carbon performance and firm value. Yet, these studies largely overlook the competitive contexts in which firms operate, thereby obscuring the strategic value of non-market initiatives that are ultimately pursued with rivals, not broad industry peers, in mind. This study addresses that gap by investigating how a firm’s carbon performance relative to its direct competitors affects market valuation. Using a text-based network industry classification, we identify firm-specific rivals and capture variation in rivalry intensity based on product-market similarity. We find that superior relative carbon performance enhances firm value, but this effect weakens under intense competitive pressure. By contrast, differentiation through green innovation and advertising amplifies the value impact. Our findings extend non-market strategy research by positioning competitive context as a critical determinant of value creation and by demonstrating the importance of aligning non- market and competitive strategies to strengthen market advantage.