SMEs’ adoption of environmental efficiency practices The effects of legislation complexity and external financing

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Global environmental problems have increased the importance of research on the impact of business operations. Where academics were mostly fixated on MNEs in previous research, the current focus has shifted towards the environmental impact of SMEs and towards the factors influencing their environmental practices. Although previous studies have identified several important determinants of SMEs’ environmental behavior, there is still an ongoing debate on the effects of environmental legislation and financial support. This thesis addresses these research gaps by exploring the effects of environmental legislation complexity and financial support towards SMEs’ adoption of environmental practices. Additionally, we extend previous research by comparing the effect of public funding and private funding. This research makes use of data provided by the Flash Eurobarometer 456, containing more than 10,000 SMEs used in the study, which were dispersed over 28 European countries. The results of our ordinal logistic regression analysis shows that SMEs adopt more environmental practices when experiencing environmental legislation as complex, and when receiving financial support. However, the different type of funding did not give a significant result.
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