Do resource slack and green organizational climate moderate the relationships between institutional pressures and corporate environmental responsibility practices of SMEs in China?

Corporate environmental responsibility (CER) practices of small-and medium-sized enterprises (SMEs) are significant to the sustainable development of firms and the whole society. The institutional environment affects the environmental response of SMEs in the form of the implementation of CER practices. However, the relationship between institutional pressures and CER practices is quite mixed. To address this research gap, we developed a model that incorporates resource slack and green organizational climate to investigate whether and when institutional pressures affect CER practices. We tested our model with 211 questionnaires from Chinese manufacturing firms. Our results show that SMEs respond positively to mimetic and normative pressures by implementing CER practices, but their responses vary by resource slack and green organizational climate. SMEs are more likely to increase their CER practices when resources are strained and used more efficiently, or when the organizational climate values and recognizes green development. Our study contributes to an institutional perspective on CER by highlighting the negative moderating role of resource slack and the positive moderating role of green organizational climate. It also advances management practices regarding resource allocation and climate shaping for CER in a specific institutional environment.