Environment Practices Mediating the Environmental Compliance and firm Performance: An Institutional Theory Perspective from Emerging Economies

Abstract

Coercive pressure has forced firms to take up environmental measures in the last two decades in emerging economies. Under normative pressure, large firms with farsightedness take up the environmental practices as industry leaders. In a little mature emerging economy, such as India, where triple bottom line awareness is growing, the government facilitates the firms to operate in an environment-friendly ecosystem. We investigate how do environmental compliance and environmental practices influence the overall firm performance? The performance was measured in terms of financial, customer, internal business process, and learning and growth performance. A survey instrument was designed using well-established scales and administered to the middle to top-level corporate management executives to gather 240 data from the Indian firms. A rigorous statistical validity, diagnostics, and SEM were used to test the hypotheses. The environmental practices showed a full mediation effect on the effect of environmental compliance on performance. The examination of mediation relationships in an environmental context is limited in the reported literature. This paper is among the initial works that deal with complicated mediation relationships drawn from institutional theory propositions. The study established and argued that environmental practices' ecosystem would turn firms towards voluntary environmental compliance and eventually enjoy the long-term performance.

Mediation effect of environmental performance in the relationship between green supply chain management practices, institutional pressures, and financial performance

“…A firm's environmental performance mediates the relationship among GSCM practices and financial performance in manufacturing companies (Al-Ghwayeen and Abdallah, 2018). A firm's environmental performance also mediates the relationship among the institutional pressures and a firm's financial performance (Gupta and Gupta, 2021). Future studies should be conducted to investigate the direct influence of institutional pressures on the environment and the indirect effect on firm financial performance (Yang, 2018).…”

Hotels’ Green Practices Adoption: Determinants and Top Managers’ Environmental Commitment

“…Hotel managers are playing the role of an agent and they are compelled to comply with the environmental rules imposed by the local council or relevant associations. In many instances, the design and implementation of green policies are due to strong institutional pressure (Gupta & Gupta, 2021). Likewise, Ouyang et al (2019) explained that the institutional environments, such as the regulative environment (e.g., government regulation and policies), normative environment (e.g., competitors' practices and industry association that can detect the norms and standards in the industry), and the expectations from other stakeholders exert considerable pressures on hoteliers to engage in green practices.…”

Social Sustainability Challenges Towards Flexible Supply Chain Management: Post-COVID-19 Perspective

“…Implementation of the social responsibilities of a company largely influences its SC activities, operational performance, supplier performance, and customers’ satisfaction that drive the financial success of a company (Mani et al, 2020 ). Though SS has become an inevitable stepping-stone for a company’s success, it has not gained so much attention like environmental and economic sustainability in the previous literature (D’Adamo et al, 2019 ; D’Eusanio et al, 2019 ; Gupta & Gupta, 2021 ; Kala et al, 2020 ; Somani et al, 2020 ). Most importantly, no study found the critical challenges to SS in the post-COVID-19 context.…”