Is There a Missing Link? Exploring the Effects of Institutional Pressures on Environmental Performance in the Chinese Construction Industry

Abstract

Although institutional pressures have huge strategic implications for organizational activities, this certainly does not mean that organizations under institutional pressures can improve environmental performance automatically. Institutional pressures are critical but not sufficient to affect environmental performance directly. Therefore, additional research is needed to explore the missing link between institutional pressures and environmental performance. Based on the “pressure-response-performance” framework, this study integrates perspectives of institutional theory and organizational learning to argue the mediating role of organizational learning in the relationship between institutional pressures and environmental performance. Data were collected via 268 valid questionnaires from construction firms located in Shanxi Province in central China. Hypotheses in the conceptual model were tested with structural equation modeling. Empirical results reveal that both coercive and mimetic pressures have significantly positive effects on organizational learning, whereas normative pressures have a non-significant effect on organizational learning. Besides that, organizational learning has a significantly positive effect on environmental performance. In addition, organizational learning partially mediates the relationship between coercive pressures and environmental performance and completely mediates the relationship between mimetic pressures and environmental performance. By exploring the mediating role of organizational learning, the article uncovers the missing link in the relationship between institutional pressures and environmental performance.

Do environmental management practices mediate institutional pressures-environmental performance relationship? Evidence from Vietnamese SMEs

“…One reason is that manufacturing SMEs is required to improve environmental performance to gain legitimacy according to institutional theory. This proposal is in line with prior studies, which rely on institutional theory to predict the impact of these three pressures on environmental performance [ [15] , [16] , [17] , [18] ]. Furthermore, due to the limitation of institutional theory, from the perspective of neo institutional theory, this study also expects that the adoption of environmental management practices is the strategic response of manufacturing SMEs operating in Vietnam to cope with three institutional pressures.…”

“…First, in the environmental literature, researchers draw upon institutional perspective to explain that institutional pressures cause large enterprises to exert environmental friendly behaviors as adopting environmental management practices [ [11] , [12] , [13] , [14] ] as well as improvement of environmental performance [ [15] , [16] , [17] , [18] ]. A lack of attention has been paid to smaller enterprises as SMEs.…”

“…For instance, Chaudhry and Amir [ 16 ] found that coercive, normative, and mimetic pressure drives manufacturing firms in Pakistan to improve environmental performance. Lee, et al [ 17 ] indicated that coercive, normative, and mimetic pressure affects construction firms in China to gain environmental performance. However, Peng, et al [ 18 ] demonstrated the insignificant link between coercive and normative pressure and the environmental performance of multinational corporations operating in China and Japan, as well as the insignificant link between mimetic pressure and this performance of multinational corporations in the U.K.…”

“…According to DiMaggio and Powell [ 10 ], institutional pressures are constituted by three distinct types of pressure: coercive, mimetic, and normative pressure. Environmental scholars suggest that three types of institutional pressure have effect on the adoption of environmental management practices [ [11] , [12] , [13] , [14] ] and environmental performance [ [15] , [16] , [17] , [18] ].…”

The effect of green supply chain management practices on corporate environmental performance: Does supply chain competitive advantage matter?

“…The findings of H1 propose that IP positively impact EP. Nevertheless, this outcome was not supported and agreed with the study outcomes (Bananuka et al, 2021; Lee et al, 2022; Maulamin et al, 2020). The intuition behind these results can be ascribed to the fact that a firm's EP is not hinged on IP.…”