IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i9p5662-d810695.html
   My bibliography  Save this article

EMA Implementation and Corporate Environmental Firm Performance: A Comparison of Institutional Pressures and Environmental Uncertainty

Author

Listed:
  • Yusheng Kong

    (School of Finance & Economics, Jiangsu University, Zhenjiang 212013, China)

  • Fahad Javed

    (School of Finance & Economics, Jiangsu University, Zhenjiang 212013, China
    Faculty of Business & Commerce, GIFT University, Gujranwala 52250, Pakistan)

  • Jahanzaib Sultan

    (Lyallpur Business School, G.C. University, Faisalabad 38860, Pakistan)

  • Muhammad Shehzad Hanif

    (UCP Business School, University of Central Punjab, Lahore 44600, Pakistan)

  • Noheed Khan

    (Department of Management Sciences and Commerce, Alhamd Islamic University, Islamabad 45400, Pakistan)

Abstract

Environmental management accounting (EMA) practices guide a firm’s response to perceived environmental uncertainty (EU) and various institutional pressures (IP). Drawing upon institutional theory, this study explores the relative effects of institutional pressures and environmental uncertainty on the implementation of EMA, an environmental strategy (ES), and the resulting environmental performance (EP) of firms under the influence of top-management support (TMS) and perceived benefits (PB). Based on data collected from 243 firms operating in Suzhou, one of the busiest business hubs in China, this research used the structural equation modeling (SEM) technique. Findings reveal that environmental uncertainty exerts a stronger influence on the adoption of EMA practices than institutional pressures; however, the choice of a firm’s environmental strategy is more influenced by institutional pressures. Likewise, the serial-mediation effect of environmental strategy and EMA practices is observed to be the strongest in the case of coercive pressures, with some notable moderation effect for perceived benefits and top-management support. The study concludes with theoretical and managerial implications.

Suggested Citation

  • Yusheng Kong & Fahad Javed & Jahanzaib Sultan & Muhammad Shehzad Hanif & Noheed Khan, 2022. "EMA Implementation and Corporate Environmental Firm Performance: A Comparison of Institutional Pressures and Environmental Uncertainty," Sustainability, MDPI, vol. 14(9), pages 1-25, May.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:9:p:5662-:d:810695
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/9/5662/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/9/5662/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nikunj Kumar Jain & Abinash Panda & Piyush Choudhary, 2020. "Institutional pressures and circular economy performance: The role of environmental management system and organizational flexibility in oil and gas sector," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3509-3525, December.
    2. Azlan Amran & Roszaini Haniffa, 2011. "Evidence in development of sustainability reporting: a case of a developing country," Business Strategy and the Environment, Wiley Blackwell, vol. 20(3), pages 141-156, March.
    3. Roger L. Burritt, 2002. "Environmental reporting in Australia: current practices and issues for the future," Business Strategy and the Environment, Wiley Blackwell, vol. 11(6), pages 391-406, November.
    4. Ki‐Hoon Lee & Beom Cheol Cin & Eui Young Lee, 2016. "Environmental Responsibility and Firm Performance: The Application of an Environmental, Social and Governance Model," Business Strategy and the Environment, Wiley Blackwell, vol. 25(1), pages 40-53, January.
    5. Samuel Adomako & Ernestine Ning & Emmanuel Adu‐Ameyaw, 2021. "Proactive environmental strategy and firm performance at the bottom of the pyramid," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 422-431, January.
    6. Magali Delmas & Michael W. Toffel, 2004. "Stakeholders and environmental management practices: an institutional framework," Business Strategy and the Environment, Wiley Blackwell, vol. 13(4), pages 209-222, July.
    7. Marcus Wagner & Stefan Schaltegger, 2004. "The Effect of Corporate Environmental Strategy Choice and Environmental Performance on Competitiveness and Economic Performance," Post-Print hal-00279008, HAL.
    8. Thi Tam Le & Thi Mai Anh Nguyen & Thi Thu Hien Phan, 2019. "Environmental Management Accounting and Performance Efficiency in the Vietnamese Construction Material Industry—A Managerial Implication for Sustainable Development," Sustainability, MDPI, vol. 11(19), pages 1-32, September.
    9. Kristel Buysse & Alain Verbeke, 2003. "Proactive environmental strategies: a stakeholder management perspective," Strategic Management Journal, Wiley Blackwell, vol. 24(5), pages 453-470, May.
    10. Badar Latif & Zeeshan Mahmood & Ong Tze San & Ridzwana Mohd Said & Allah Bakhsh, 2020. "Coercive, Normative and Mimetic Pressures as Drivers of Environmental Management Accounting Adoption," Sustainability, MDPI, vol. 12(11), pages 1-14, June.
    11. Su‐Yol Lee & Robert D. Klassen, 2016. "Firms’ Response to Climate Change: The Interplay of Business Uncertainty and Organizational Capabilities," Business Strategy and the Environment, Wiley Blackwell, vol. 25(8), pages 577-592, December.
    12. Gerard J. Lewis & Brian Harvey, 2001. "Perceived Environmental Uncertainty: The Extension of Miller’s Scale to the Natural Environment," Journal of Management Studies, Wiley Blackwell, vol. 38(2), pages 201-234, March.
    13. Shanyong Wang & Hualong Wang & Jing Wang, 2019. "Exploring the effects of institutional pressures on the implementation of environmental management accounting: Do top management support and perceived benefit work?," Business Strategy and the Environment, Wiley Blackwell, vol. 28(1), pages 233-243, January.
    14. Scott R. Colwell & Ashwin W. Joshi, 2013. "Corporate Ecological Responsiveness: Antecedent Effects of Institutional Pressure and Top Management Commitment and Their Impact on Organizational Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 22(2), pages 73-91, February.
    15. Wagner, Marcus & Schaltegger, Stefan, 2004. "The Effect of Corporate Environmental Strategy Choice and Environmental Performance on Competitiveness and Economic Performance:: An Empirical Study of EU Manufacturing," European Management Journal, Elsevier, vol. 22(5), pages 557-572, October.
    16. Chitsaz, Ehsan & Liang, Dapeng & Khoshsoroor, Somayeh, 2017. "The impact of resource configuration on Iranian technology venture performance," Technological Forecasting and Social Change, Elsevier, vol. 122(C), pages 186-195.
    17. Dubey, Rameshwar & Gunasekaran, Angappa & Childe, Stephen J. & Papadopoulos, Thanos & Hazen, Benjamin & Giannakis, Mihalis & Roubaud, David, 2017. "Examining the effect of external pressures and organizational culture on shaping performance measurement systems (PMS) for sustainability benchmarking: Some empirical findings," International Journal of Production Economics, Elsevier, vol. 193(C), pages 63-76.
    18. Sayedeh Parastoo Saeidi & Mohd Shahwahid Haji Othman & Parvaneh Saeidi & Sayyedeh Parisa Saeidi, 2018. "The moderating role of environmental management accounting between environmental innovation and firm financial performance," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 19(3), pages 326-348.
    19. Stephen Brammer & Stefan Hoejmose & Kerry Marchant, 2012. "Environmental Management in SMEs in the UK: Practices, Pressures and Perceived Benefits," Business Strategy and the Environment, Wiley Blackwell, vol. 21(7), pages 423-434, November.
    20. Albert Danso & Samuel Adomako & Joseph Amankwah‐Amoah & Samuel Owusu‐Agyei & Renata Konadu, 2019. "Environmental sustainability orientation, competitive strategy and financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 885-895, July.
    21. Shanyong Wang & Jun Li & Dingtao Zhao, 2018. "Institutional Pressures and Environmental Management Practices: The Moderating Effects of Environmental Commitment and Resource Availability," Business Strategy and the Environment, Wiley Blackwell, vol. 27(1), pages 52-69, January.
    22. Singh, Sanjay Kumar & Chen, Jin & Del Giudice, Manlio & El-Kassar, Abdul-Nasser, 2019. "Environmental ethics, environmental performance, and competitive advantage: Role of environmental training," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 203-211.
    23. Aldónio Ferreira & Carly Moulang & Bayu Hendro, 2010. "Environmental management accounting and innovation: an exploratory analysis," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 23(7), pages 920-948, September.
    24. Christine Oliver, 1997. "Sustainable competitive advantage: combining institutional and resource‐based views," Strategic Management Journal, Wiley Blackwell, vol. 18(9), pages 697-713, October.
    25. Abdel-Kader, Magdy & Luther, Robert, 2008. "The impact of firm characteristics on management accounting practices: A UK-based empirical analysis," The British Accounting Review, Elsevier, vol. 40(1), pages 2-27.
    26. Johan Jansson & Jonas Nilsson & Frida Modig & Gabriella Hed Vall, 2017. "Commitment to Sustainability in Small and Medium‐Sized Enterprises: The Influence of Strategic Orientations and Management Values," Business Strategy and the Environment, Wiley Blackwell, vol. 26(1), pages 69-83, January.
    27. Pratima Bansal, 2005. "Evolving sustainably: a longitudinal study of corporate sustainable development," Strategic Management Journal, Wiley Blackwell, vol. 26(3), pages 197-218, March.
    28. Michel Lander & Pursey Heugens, 2009. "Structure! Agency! (And Other Quarrels): Meta-Analyzing Institutional Theories of Organization," Post-Print hal-00623835, HAL.
    29. A.D. Nuwan Gunarathne & Ki‐Hoon Lee & Pubudu K. Hitigala Kaluarachchilage, 2021. "Institutional pressures, environmental management strategy, and organizational performance: The role of environmental management accounting," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 825-839, February.
    30. T. J. Atwood & Christina Lewellen, 2019. "The Complementarity between Tax Avoidance and Manager Diversion: Evidence from Tax Haven Firms," Contemporary Accounting Research, John Wiley & Sons, vol. 36(1), pages 259-294, March.
    31. Roger L. Burritt & Stefan Schaltegger, 2010. "Sustainability accounting and reporting: fad or trend?," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 23(7), pages 829-846, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abdalwali Lutfi & Hamza Alqudah & Mahmaod Alrawad & Ahmad Farhan Alshira’h & Malek Hamed Alshirah & Mohammed Amin Almaiah & Adi Alsyouf & Mohammed Faisal Hassan, 2023. "Green Environmental Management System to Support Environmental Performance: What Factors Influence SMEs to Adopt Green Innovations?," Sustainability, MDPI, vol. 15(13), pages 1-20, July.
    2. Abeer M. Abdelhalim & Nahla Ibrahim & Mohammed Alomair, 2023. "The Moderating Role of Digital Environmental Management Accounting in the Relationship between Eco-Efficiency and Corporate Sustainability," Sustainability, MDPI, vol. 15(9), pages 1-16, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. A.D. Nuwan Gunarathne & Ki‐Hoon Lee & Pubudu K. Hitigala Kaluarachchilage, 2021. "Institutional pressures, environmental management strategy, and organizational performance: The role of environmental management accounting," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 825-839, February.
    2. Shanyong Wang & Hualong Wang & Jing Wang, 2019. "Exploring the effects of institutional pressures on the implementation of environmental management accounting: Do top management support and perceived benefit work?," Business Strategy and the Environment, Wiley Blackwell, vol. 28(1), pages 233-243, January.
    3. Badar Latif & Zeeshan Mahmood & Ong Tze San & Ridzwana Mohd Said & Allah Bakhsh, 2020. "Coercive, Normative and Mimetic Pressures as Drivers of Environmental Management Accounting Adoption," Sustainability, MDPI, vol. 12(11), pages 1-14, June.
    4. Musaab Alnaim & Abdelmoneim Bahyeldin Mohamed Metwally, 2024. "Institutional Pressures and Environmental Management Accounting Adoption: Do Environmental Strategy Matter?," Sustainability, MDPI, vol. 16(7), pages 1-20, April.
    5. Shanyong Wang & Jun Li & Dingtao Zhao, 2018. "Institutional Pressures and Environmental Management Practices: The Moderating Effects of Environmental Commitment and Resource Availability," Business Strategy and the Environment, Wiley Blackwell, vol. 27(1), pages 52-69, January.
    6. 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.
    7. Yu‐Xiang Yen, 2018. "Buyer–supplier collaboration in green practices: The driving effects from stakeholders," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1666-1678, December.
    8. Corinna Dögl & Michael Behnam, 2015. "Environmentally Sustainable Development through Stakeholder Engagement in Developed and Emerging Countries," Business Strategy and the Environment, Wiley Blackwell, vol. 24(6), pages 583-600, September.
    9. Kittisak Jermsittiparsert & Sudawan Somjai & Sriparinya Toopgajank, 2020. "Factors Affecting Firm s Energy Efficiency and Environmental Performance: The Role of Environmental Management Accounting, Green Innovation and Environmental Proactivity," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 325-331.
    10. Adomako, Samuel & Nguyen, Nguyen Phong, 2023. "Eco-innovation in the extractive industry: Combinative effects of social legitimacy, green management, and institutional pressures," Resources Policy, Elsevier, vol. 80(C).
    11. David G Hyatt & Nicholas Berente, 2017. "Substantive or Symbolic Environmental Strategies? Effects of External and Internal Normative Stakeholder Pressures," Business Strategy and the Environment, Wiley Blackwell, vol. 26(8), pages 1212-1234, December.
    12. Nikunj Kumar Jain & Abinash Panda & Piyush Choudhary, 2020. "Institutional pressures and circular economy performance: The role of environmental management system and organizational flexibility in oil and gas sector," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3509-3525, December.
    13. Gregorio Martín‐de Castro & Javier Amores‐Salvadó & José E. Navas‐López, 2016. "Environmental Management Systems and Firm Performance: Improving Firm Environmental Policy through Stakeholder Engagement," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(4), pages 243-256, July.
    14. Wu, Tienhua & Jim Wu, Yen-Chun & Chen, Yenming J. & Goh, Mark, 2014. "Aligning supply chain strategy with corporate environmental strategy: A contingency approach," International Journal of Production Economics, Elsevier, vol. 147(PB), pages 220-229.
    15. Peter S. Hofman & Constantin Blome & Martin C. Schleper & Nachiappan Subramanian, 2020. "Supply chain collaboration and eco‐innovations: An institutional perspective from China," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2734-2754, September.
    16. Abdalwali Lutfi & Hamza Alqudah & Mahmaod Alrawad & Ahmad Farhan Alshira’h & Malek Hamed Alshirah & Mohammed Amin Almaiah & Adi Alsyouf & Mohammed Faisal Hassan, 2023. "Green Environmental Management System to Support Environmental Performance: What Factors Influence SMEs to Adopt Green Innovations?," Sustainability, MDPI, vol. 15(13), pages 1-20, July.
    17. Bismark Kusi Appiah & Zhang Donghui & Shapan Chandra Majumder & Malepekola Precious Monaheng, 2020. "Effects of Environmental Strategy, Uncertainty and Top Management Commitment on the Environmental Performance: Role of Environmental Management Accounting and Environmental Management Control System," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 360-370.
    18. Famiyeh, Samuel & Opoku, Robert.A. & Kwarteng, Amoako & Asante-Darko, Disraeli, 2021. "Driving forces of sustainability in the mining industry: Evidence from a developing country," Resources Policy, Elsevier, vol. 70(C).
    19. Scott R. Colwell & Ashwin W. Joshi, 2013. "Corporate Ecological Responsiveness: Antecedent Effects of Institutional Pressure and Top Management Commitment and Their Impact on Organizational Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 22(2), pages 73-91, February.
    20. Abdelmohsen A. Nassani & Nicoleta Isac & Joanna Rosak-Szyrocka & Zahid Yousaf & Mohamed Haffar, 2023. "Institutional Pressures and Circular Economy Target Performance: Are Zero Waste Practices and Enviropreneurship Worth Pursuing?," Sustainability, MDPI, vol. 15(4), pages 1-13, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:9:p:5662-:d:810695. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.