Sustainable Environmental Manufacturing Practice (SEMP) and Firm Performance: Moderating Role of Environmental Regulation

Abstract

Theoretical evidence shows that a considerable amount of attention has been given to environmental issues in academic researches in the past years and the link between sustainable environmental practices and firm performance remains inconclusive. One of the reasons for this inconsistent relationship is due to the increasing regulatory requirements of the environmental sustainable practices which have become increasingly stringent on yearly basis. This study investigates the moderating effect of environmental regulation on the relationship between sustainable environmental manufacturing practices and firm performance. Data was collected by using a mail survey questionnaire from the manufacturing companies in Malaysia and analyzed with PLS-SEM. The result of the empirical investigation found that environmental regulation only moderates the relationship between SEMP and environmental performance. The relationships between SEMP; and financial and operational performance were not significantly moderated by stringent environmental regulation. The study recommends that environmental policy makers should revisit the blueprint about environmental regulation on environmental practices to provide supportive environmental policies that will enhance a better financial and operational performance in manufacturing industry.

The effect of sustainable manufacturing on environmental performance through government regulation and eco-innovation

“…The data obtained through the study supports the notion that when effective regulations are put in place, there is a noticeable improvement in the overall environmental conditions. The findings of this study are relevant to the study conducted by Adebambo et al (2014). The findings of their study indicated that there is a positive and significant influence between government regulation on environmental performance.…”

Corporate Governance, Sustainability Initiatives and Firm Performance: Theoretical and Conceptual Perspectives

“…Previous literatures on sustainability issues are evidenced on the various types of studies that have been embarked upon in particular from the standpoints of the developing and developed countries with respect to the many dimensions of sustainability. They include financial disclosures (Imeokparia and Olagunju, 2013;Madawaki, 2014) environmental management, performance and disclosures (Adebambo et al, 2014;Chaklader and Gulati, 2015) and social and environmental disclosures (Adhikari et al, 2015). Others are governance on social reporting (Haniffa and Cooke, 2005;Orij, 2010) legal institutions on corporate social disclosure (Adelopo et al, 2013) and legal origin or systems on financial disclosures (Hope, 2003).…”

Impact of Green Supply Chain Management Practices on Triple Bottom Line Performance and Moderating Effect of Institutional Pressure

“…Results indicated that manufacturers in Malaysia experience high external pressures such as regulatory and marketing/customer pressures. Moreover, in Malaysia, Adebambo et al (2014) used environmental regulations as the moderating variable for the relationship between sustainable environmental practices and firm performance. Vanalle et al (2017) identified that institutional pressures influence the supply chain to pursue GSCM practices.…”