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From institutional pressure to the sustainable development of firm: Role of environmental management accounting implementation and environmental proactivity

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  • Naveed Iqbal Chaudhry
  • Muhammad Amir

Abstract

The current study purposes to assess the impact of institutional pressures (coercive, mimetic, and normative) on environmental performance of the firm along with the mediation of implementation of environmental management accounting and moderation of environmental proactivity between them. Quantitative data are collected through structured questionnaire from 500 middle‐level and top‐level managers and owners of manufacturing firms of Pakistan. Data are analyzed through SPSS and AMOS in which structural equation modeling in performed to assess hypotheses. Findings show that coercive, mimetic, and normative pressures are significant derivers of environmental performance. It is further found that coercive, mimetic, and normative pressures significantly enhance the implementation of environmental management accounting, which in turn enhances the environmental performance of the firm. Furthermore, environmental proactivity is found to be a significant moderator between mimetic pressure and environmental performance while no moderation by environmental proactivity is confirmed in relationships of coercive pressure and normative pressure with environmental performance. The current findings are anticipated to assist practitioners in strategy development and execution to improve environmental performance of the firm and policymaking to control environmental impacts of businesses and improve environmental conditions in the country. The current study is the first one to empirically examine the moderating role of environmental proactivity and mediating role of execution of environmental management accounting between institutional pressures and environmental performance in context of Pakistan; so, it will open new areas of discussion and analysis for researchers in the domain of institutional theory.

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  • Naveed Iqbal Chaudhry & Muhammad Amir, 2020. "From institutional pressure to the sustainable development of firm: Role of environmental management accounting implementation and environmental proactivity," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3542-3554, December.
    • Handle: RePEc:bla:bstrat:v:29:y:2020:i:8:p:3542-3554
    DOI: 10.1002/bse.2595
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    6. Wujuan Zhai & Florence Yean Yng Ling & Jiyong Ding & Zhuofu Wang, 2023. "Impact of Institutional Pressures on Socially Responsible Collective Action Behaviors for Major Water Transfer Projects," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(11), pages 4253-4269, September.
    7. Banjo Roxas, 2022. "Eco‐innovations of firms: A longitudinal analysis of the roles of industry norms and proactive environmental strategy," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 515-531, January.
    8. Kaveh Asiaei & Ruzita Jusoh & Omid Barani & Arash Asiaei, 2022. "How does green intellectual capital boost performance? The mediating role of environmental performance measurement systems," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1587-1606, May.
    9. Ning Liu & Haiqing Hu & Zhaoqun Wang, 2022. "The Relationship between Institutional Pressure, Green Entrepreneurial Orientation, and Entrepreneurial Performance—The Moderating Effect of Network Centrality," Sustainability, MDPI, vol. 14(19), pages 1-24, September.
    10. Gabriela Iuliana Paraschiv (Ganea) & Mari-Isabella Stan, 2023. "Exploring the Impact of Companies’ Profiles on Environmental Activities," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 171-181, August.
    11. Silas Mukwarami & Chekani Nkwaira & Huibrecht Margaretha van der Poll, 2023. "Environmental Management Accounting Implementation Challenges and Supply Chain Management in Emerging Economies’ Manufacturing Sector," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
    12. John Wiredu & Qian Yang & Agyemang Kwasi Sampene & Bright Akwasi Gyamfi & Simplice A. Asongu, 2024. "The effect of green supply chain management practices on corporate environmental performance: Does supply chain competitive advantage matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 33(3), pages 2578-2599, March.
    13. Dr. Muhammad Siddique & Dr. Muhammad Sarfraz Khan & Dr. Kamran Ali & Zunaira Maqsood, 2023. "Impact of Corporate Social Responsibility on Firm Financial Performance: Evidence from Insurance Sector of Pakistan," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 9(3), pages 1-14.
    14. Khai, Dinh Cong & Thanh, Ngo Quang, 2021. "The impact of institutional pressures and top management regulations on firm performance," MPRA Paper 109673, University Library of Munich, Germany.
    15. Petr Petera & Jaroslav Wagner & Renáta Pakšiová, 2021. "The Influence of Environmental Strategy, Environmental Reporting and Environmental Management Control System on Environmental and Economic Performance," Energies, MDPI, vol. 14(15), pages 1-20, July.
    16. Agus Joko Pramono & Suwarno & Firdaus Amyar & Renny Friska, 2023. "Sustainability Management Accounting in Achieving Sustainable Development Goals: The Role of Performance Auditing in the Manufacturing Sector," Sustainability, MDPI, vol. 15(13), pages 1-13, June.
    17. Alghamdi, OmarA. & Agag, Gomaa, 2024. "Competitive advantage: A longitudinal analysis of the roles of data-driven innovation capabilities, marketing agility, and market turbulence," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).

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