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

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.

Green intellectual capital and environmental management accounting: Natural resource orchestration in favor of environmental performance

“…EMA, as a key dimension of sustainability accounting (Schaltegger & Burritt, 2006), is an important tool for organizations through which they can minimize the environmental costs and more broadly reduce the environmental impact of their activities, products, and services (Ferreira et al, 2010). Chaudhry and Amir (2020) argue that EMA use can stimulate the environmental performance of the organization since EMA paves the way for an organization to better comprehend the complexities of its environmental management systems and making more effective and informed decisions in that respect. A robust environmental management mechanism supports a company to make the right decisions building upon reliable, actual, updated, and integrated physical and monetary information that can assist it to enhance its environmental performance.…”

“…Under such circumstances in which environmental concerns are at the forefront, an effective and appropriate EMA is an integral part of the business practice and strategy of every pioneer entity to understand the critical success factors that need to be managed (Lisi, 2018). EMA is a crucial mechanism to embed this subject into the decision‐making process and the organization management system (Chaudhry & Amir, 2020).…”

“…It is claimed that EMA can facilitate the transformation of organizations' environmental actions into superior performance through the effective alignment of organizational and behavioral structures with organizational goals and core value drivers (Henri & Journeault, 2010; Solovida & Latan, 2017). In particular, EMA can help to identify emerging threats and opportunities, facilitate environmental decisions and managers coordination, promote goal and value alignment between the individual and the organization, and facilitate learning (e.g., Arjaliès & Mundy, 2013; Chaudhry & Amir, 2020; Ferreira et al, 2010; Henri & Journeault, 2010; Lisi, 2015). As such, to address the foregoing gap, it is crucial to investigate how EMA plays a role in translating GIC elements into enhanced environmental performance.…”

Eco‐innovations of firms: A longitudinal analysis of the roles of industry norms and proactive environmental strategy

“…T A B L E 1 Characteristics of the firms in the samples (n = 274) Marshall et al, 2005;van Someren, 1995). More recent studies have also used similar items (e.g., Chaudhry & Amir, 2020;Gunarathne et al, 2021;Liao, 2018;Pacheco et al, 2018;Wang et al, 2019).…”

Analysis of the impact mechanism of environmental regulations on corporate environmental proactivity—based on the perspective of political connections

“…Previous studies divided the CEP driving force into internal and external factors. Environmental regulations, the market competition environment, and stakeholder pressure comprise the external factors (Chaudhry & Amir, 2020; Darnall et al., 2010; Singh et al., 2014; Yang et al., 2019), while corporate and executive characteristics make up the internal factors (Darnall et al., 2010; Gao et al., 2021; Yang et al., 2019). However, market failures caused by the externalities of environmental issues have rendered the government and its regulations the primary driving force for the CEP improvement (Buysse & Verbeke, 2003; Henriques & Sadorsky, 1999).…”