Shaping environmental responsiveness: The influence of national institutions on SMEs of varying sizes

Abstract

A growing recognition of the significant aggregate impact that SMEs have on the environment has fuelled research into the factors influencing their environmental responsiveness. Although previous studies have identified several important predictors at the level of the individual and the firm, much less is known about the influence of the institutional context. In this thesis, I address this shortcoming by exploring the relationship between several elements of the national institutional context and SMEs’ adoption of environmental practices. Additionally, I extend previous research into the effects of firm size by arguing that the influence of the institutional context may not be the same for SMEs of different sizes. I research the influence of the institutional context on SMEs of varying sizes by using unique data for over 5000 SMEs originating from 14 European countries. The results of multiple ordinal logistic regression analyses show that SMEs operating in distinct institutional contexts vary significantly in their adoption of environmental practices. Moreover, the influence of certain national institutions differs for micro, small, and mediumsized firms. My findings point to the existence of a ‘business case’ for environmental responsiveness among SMEs, where this was previously only assumed to exist among large firms