How environmental reputation and ethical behavior impact the relationship between environmental regulatory enforcement and environmental performance

Abstract

The paper investigates the nature of the relationship between environmental regulation enforcement (ERE) and environmental performance of small and medium-sized enterprises (SMEs). Drawing upon the institutional theory and a sample of 229 SMEs, the results indicate an inverted U-shaped relationship between ERE and environmental performance. In addition, we theorized and found that environmental reputation moderates the U-shaped relationship between ERE and environmental performance, such that the relationship is positive when environmental reputation is high. Moreover, the results show that organizational ethical behavior (OEB) conditions the U-shaped relationship, such that the relationship is positive when OEB is high. In the absence of moderators, returns to environmental performance from increasing environmental regulation were observed to reach harmful levels. The theoretical and practical implications of the findings are discussed.

Sustainable environmental performance: The mediating role of green reputation in the choice of green marketing or green demarketing

“…Second, previous research has seldom investigated the environmental perspective of reputation (except Martín‐de Castro et al, 2020; Tran & Adomako, 2022) and has instead focused on the measurement of reputation. The findings here significantly advance current understandings of the relationship between green reputation and environmental performance, which is the central concern of green reputation research.…”

“…Accordingly, a firm's green reputation is based on its history of global green activity and, thus, is essential for building positive perceptions of its green activities. We thus define green reputation as the collective level of environmental credibility attributed to a firm's past and current actions—external and internal, market and non‐market—as perceived by its stakeholders (Tran & Adomako, 2022). Superior green reputation is both an important asset and a source of sustainability that provides advantages that lead to positive results in several domains, such as enhancing financial performance (Bergh et al, 2010), increasing strategic flexibility (Quintana‐García et al, 2021), and improving corporation image (Lange et al, 2011; Pfarrer et al, 2010).…”

The effects of environmental regulations on the sustainable entrepreneurship from the perspective of dynamic capabilities: a study based on Chinese new energy enterprises

“…Previous studies have concluded that environmental regulations may promote (Meng et al, 2020), inhibit (Martínez-Zarzoso et al, 2019, or have a nonlinear effect (Tran and Adomako, 2022) on enterprises' entrepreneurial performances, but the impact of environmental regulations on the non-traditional entrepreneurial behaviors of new energy enterprises, which focus on energy renewable use and sustainable development goals, still needs to be further confirmed. In this paper, we explored the impact of incentive environmental regulation and command environmental regulation on the sustainable entrepreneurial performances of new energy enterprises, and we found that:…”

The reputational costs of corporate environmental underperformance: evidence from China

“…As an important force in the global combat against climate change, corporations have paid growing attention to its environmental footprints. The current literature identifies corporate environmental performance as an important value driver for two main reasons: (1) it helps the firm to avert the rising regulative pressures for internalizing negative externalities (Deephouse, 1996; Roxas & Coetzer, 2012; Tran & Adomako, 2022; Wang et al, 2018), and (2) it neutralizes the firm's normative pressures to meet stakeholders' expectations and sustain corporate reputation (Bansal & Clelland, 2004; Dangelico, 2015; De Miguel De Blas, 2020; Kolk, 2016; Nguyen & Adomako, 2021).…”