Cultural Antecedents of Green Entrepreneurship in Saudi Arabia: An Institutional Approach

Abstract

Recent decades have brought cultural changes toward the increase of environmentally-friendly initiatives such as green entrepreneurship. Some countries are failing to develop environmental initiatives, whereas others are transitioning and advancing toward this new trend. In particular, Saudi Arabia has initiated efforts toward becoming an ecologically-friendly society. Motivated by this, we explore whether cultural characteristics are associated with green entrepreneurship in Saudi Arabia. Institutional economics is adopted to frame our hypotheses and analysis. The hypothesized relationships were empirically tested in a sample of 84 observations from 21 cities during the period 2015–2018. Data were collected from reports by the Saudi General Authority and analyzed through regression models. The main results show that cultural characteristics, such as environmental actions, environmental consciousness, and temporal orientation, increase the level of green entrepreneurial activity across cities in Saudi Arabia. The findings of this study contribute to existing knowledge on green entrepreneurship, as well as to the discussion of implications for policy and practice related to environmentally-friendly productive activities.

Barriers to Green Entrepreneurship: An ISM-Based Investigation

“…Moreover, Mukonza (2020) studied factors influencing GE activities in South Africa, such as access to funding, knowledge, competence, and information access, and found that government and private sector support are critical to sustaining GE. Further, in a recent study by Alwakid et al (2020), they found that environmental actions, environmental consciousness, and temporal orientation are the cultural factors that contribute to increasing green entrepreneurial activities in the context of Saudi Arabia. Karuppiah et al (2020) used multicriteria decision-making techniques to model the barriers to implementing green manufacturing practices in SMEs.…”

The Influence of Green Entrepreneurship on Sustainable Development in Saudi Arabia: The Role of Formal Institutions

“…A particular focus of the Saudi Arabian government and the executive has been to reduce the country's dependence on oil as one of the major industries and to diversify into other sectors such as clean energy, health, and tourism. Green entrepreneurship and a focus on a holistic approach to economic development that balances people, profit, and planet is thus a cornerstone of Saudi Arabia's long-term national strategy [43]. Additionally, environmentally sustainable practices develop the social and economic performance of firms in the long term [44].…”

“…The policies adopted by Saudi Arabia are consistent with the growing need to address environmental threats and to protect the environment. The work by Yi [18], Alwakid et al [43], and Ndubisi and Nair [45] suggests that there is a need for companies to adopt a green approach. In developing countries, environmental actions are of prime importance [46].…”

“…Previous studies do not always agree on the direction of causality, and the relationship is often viewed as bidirectional with feedback loops [2,47,48]. The problem might come from the conceptualisation itself, as, for example, green entrepreneurship might not only be associated with environmental purposes but also social ones, so there might be an overlap between green and social entrepreneurship [3,43]. In our case, we perceive green entrepreneurial activity as those initiatives focused on solving environmental problems while following rules and regulations oriented to tackling global warming, use of clean energy, recycling standards, etc., [3,13].…”

“…This variable represented the reduction in the use of natural resources relative to output, that is, the extent to which a city was balanced in its use of natural resources [87]. According to Alwakid et al [43], environmental consciousness is positively associated with green entrepreneurship in Saudi Arabia. We controlled for the population of the area studied, since green entrepreneurship aims to minimise threats that may occur because of a decrease in natural resources, such as an increase in population growth [88,89].…”