IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v74y2019i3d10.1007_s10640-019-00361-8.html
   My bibliography  Save this article

Economic Freedom, Internal Motivation, and Corporate Environmental Responsibility of SMEs

Author

Listed:
  • Johan Graafland

    (Tilburg University)

  • Reyer Gerlagh

    (Tilburg University)

Abstract

The effect of economic freedom on firms’ environmental responsible management is still unconcluded. We conjecture that the effects are conditional on a firm’s internal motivation and use a large-scale survey to run an empirical test. The sample consists of 4338 small and medium-sized enterprises from twelve European countries. Distinguishing between intrinsic (environmental) and extrinsic (profit) internal motivations, we find clear support that the effects of economic freedom and intrinsic motivation on corporate environmental performance interact with each other. Our findings explain the ambiguous results of previous empirical studies at the aggregate level.

Suggested Citation

  • Johan Graafland & Reyer Gerlagh, 2019. "Economic Freedom, Internal Motivation, and Corporate Environmental Responsibility of SMEs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1101-1123, November.
    • Handle: RePEc:kap:enreec:v:74:y:2019:i:3:d:10.1007_s10640-019-00361-8
    DOI: 10.1007/s10640-019-00361-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10640-019-00361-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10640-019-00361-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mark F Peterson & Jean-Luc Arregle & Xavier Martin, 2012. "Multilevel models in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(5), pages 451-457, June.
    2. David Williamson & Gary Lynch-Wood & John Ramsay, 2006. "Drivers of Environmental Behaviour in Manufacturing SMEs and the Implications for CSR," Journal of Business Ethics, Springer, vol. 67(3), pages 317-330, September.
    3. Rode, Julian & Gómez-Baggethun, Erik & Krause, Torsten, 2015. "Motivation crowding by economic incentives in conservation policy: A review of the empirical evidence," Ecological Economics, Elsevier, vol. 117(C), pages 270-282.
    4. Ioannis Ioannou & George Serafeim, 2012. "What drives corporate social performance? The role of nation-level institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(9), pages 834-864, December.
    5. Ilya Okhmatovskiy & Robert J. David, 2012. "Setting Your Own Standards: Internal Corporate Governance Codes as a Response to Institutional Pressure," Organization Science, INFORMS, vol. 23(1), pages 155-176, February.
    6. Alan Muller & Ans Kolk, 2010. "Extrinsic and Intrinsic Drivers of Corporate Social Performance: Evidence from Foreign and Domestic Firms in Mexico," Journal of Management Studies, Wiley Blackwell, vol. 47(1), pages 1-26, January.
    7. Stefanie Haller & Liam Murphy, 2012. "Corporate Expenditure on Environmental Protection," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(2), pages 277-296, February.
    8. Stephen Brammer & Stefan Hoejmose & Kerry Marchant, 2012. "Environmental Management in SMEs in the UK: Practices, Pressures and Perceived Benefits," Business Strategy and the Environment, Wiley Blackwell, vol. 21(7), pages 423-434, November.
    9. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
    10. Dima Jamali, 2010. "MNCs and International Accountability Standards Through an Institutional Lens: Evidence of Symbolic Conformity or Decoupling," Journal of Business Ethics, Springer, vol. 95(4), pages 617-640, September.
    11. Lindenberg, Siegwart, 2001. "Intrinsic Motivation in a New Light," Kyklos, Wiley Blackwell, vol. 54(2-3), pages 317-342.
    12. Richard T. Carson, 2010. "The Environmental Kuznets Curve: Seeking Empirical Regularity and Theoretical Structure," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(1), pages 3-23, Winter.
    13. S. Trevis Certo & John R. Busenbark & Hyun‐soo Woo & Matthew Semadeni, 2016. "Sample selection bias and Heckman models in strategic management research," Strategic Management Journal, Wiley Blackwell, vol. 37(13), pages 2639-2657, December.
    14. Rachel Croson & Nicolas Treich, 2014. "Behavioral Environmental Economics: Promises and Challenges," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(3), pages 335-351, July.
    15. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-512, March.
    16. Jeffrey A. Frankel & Andrew K. Rose, 2005. "Is Trade Good or Bad for the Environment? Sorting Out the Causality," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 85-91, February.
    17. Dima Jamali & Ramez Mirshak, 2007. "Corporate Social Responsibility (CSR): Theory and Practice in a Developing Country Context," Journal of Business Ethics, Springer, vol. 72(3), pages 243-262, May.
    18. C. Christopher Baughn & Nancy L. (Dusty) Bodie & John C. McIntosh, 2007. "Corporate social and environmental responsibility in Asian countries and other geographical regions," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 14(4), pages 189-205, September.
    19. Hartmann, Julia & Uhlenbruck, Klaus, 2015. "National institutional antecedents to corporate environmental performance," Journal of World Business, Elsevier, vol. 50(4), pages 729-741.
    20. Abatayo, Anna Lou & Lynham, John, 2016. "Endogenous vs. exogenous regulations in the commons," Journal of Environmental Economics and Management, Elsevier, vol. 76(C), pages 51-66.
    21. Siegwart Lindenberg, 2001. "Intrinsic Motivation in a New Light," Kyklos, Wiley Blackwell, vol. 54(2‐3), pages 317-342, May.
    22. Sonja Studer & Richard Welford & Peter Hills, 2006. "Engaging Hong Kong businesses in environmental change: drivers and barriers," Business Strategy and the Environment, Wiley Blackwell, vol. 15(6), pages 416-431, November.
    23. Angeloantonio Russo & Antonio Tencati, 2009. "Formal vs. Informal CSR Strategies: Evidence from Italian Micro, Small, Medium-sized, and Large Firms," Journal of Business Ethics, Springer, vol. 85(2), pages 339-353, April.
    24. Bracke, Roeland & Verbeke, Tom & Dejonkheere, Veerle, 2008. "What Determines the Decision to Implement EMAS? A European Firm Level Study," Working Papers 2008/15, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    25. Camisón, César, 2010. "Effects of coercive regulation versus voluntary and cooperative auto-regulation on environmental adaptation and performance: Empirical evidence in Spain," European Management Journal, Elsevier, vol. 28(5), pages 346-361, October.
    26. Gwartney, James & Lawson, Robert, 2003. "The concept and measurement of economic freedom," European Journal of Political Economy, Elsevier, vol. 19(3), pages 405-430, September.
    27. Andrea Revell & David Stokes & Hsin Chen, 2010. "Small businesses and the environment: turning over a new leaf?," Business Strategy and the Environment, Wiley Blackwell, vol. 19(5), pages 273-288, July.
    28. Gregory Jackson & Androniki Apostolakou, 2010. "Corporate Social Responsibility in Western Europe: An Institutional Mirror or Substitute?," Journal of Business Ethics, Springer, vol. 94(3), pages 371-394, July.
    29. Vollan, Bjørn, 2008. "Socio-ecological explanations for crowding-out effects from economic field experiments in southern Africa," Ecological Economics, Elsevier, vol. 67(4), pages 560-573, November.
    30. Anna Alberini & Kathleen Segerson, 2002. "Assessing Voluntary Programs to Improve Environmental Quality," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 157-184, June.
    31. José A. Pellerano & Michael K. Price & Steven L. Puller & Gonzalo E. Sánchez, 2017. "Do Extrinsic Incentives Undermine Social Norms? Evidence from a Field Experiment in Energy Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 413-428, July.
    32. Christopher Wickert & Andreas Georg Scherer & Laura J. Spence, 2016. "Walking and Talking Corporate Social Responsibility: Implications of Firm Size and Organizational Cost," Journal of Management Studies, Wiley Blackwell, vol. 53(7), pages 1169-1196, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rui Yang & Yingwen Chen & Yiqun Liu & Yuchen Feng & Jianwan Ji & Christina W. Y. Wong & Xin Miao & Yanhong Tang, 2023. "Government–business relations, environmental information transparency, and Hu-line-related factors in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 7215-7238, July.
    2. Olivier Beaumais & Mireille Chiroleu-Assouline, 2020. "Informal versus Formal Corporate Social Responsibility: a Tale of Hidden Green Attitude," Working Papers halshs-03073242, HAL.
    3. Yaoxiaoxue Hong & Xianling Jiang & Beibei Shi & Chang Yu, 2022. "Do Fiscal Environmental Protection Expenditures Crowd Out Corporate Environmental Protection Investments?," Sustainability, MDPI, vol. 14(20), pages 1-23, October.
    4. Luisa Esteban-Salvador & Ana Felicitas Gargallo-Castel & Javier Pérez-Sanz, 2020. "Environmental Practices in Firms Located in Underpopulated Rural Areas in Spain: The Case of the Province of Teruel," IJERPH, MDPI, vol. 17(23), pages 1-16, December.
    5. Agata Pierscieniak & Izabela Krawczyk-Sokolowska & Wieslawa Caputa, 2023. "Micro-foundations of environmental entrepreneurship resistance in SMEs," International Entrepreneurship and Management Journal, Springer, vol. 19(1), pages 71-95, March.
    6. Rongjiang Cai & Tao Lv & Xu Deng, 2021. "Evaluation of Environmental Information Disclosure of Listed Companies in China’s Heavy Pollution Industries: A Text Mining-Based Methodology," Sustainability, MDPI, vol. 13(10), pages 1-23, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johan Graafland, 2020. "Competition in technology and innovation, motivation crowding, and environmental policy," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(1), pages 137-145, January.
    2. Eduardo Ortas & Isabel Gallego‐Álvarez & Igor Álvarez, 2019. "National institutions, stakeholder engagement, and firms' environmental, social, and governance performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(3), pages 598-611, May.
    3. Johan Graafland & Hugo Smid, 2016. "Environmental Impacts of SMEs and the Effects of Formal Management Tools: Evidence from EU's Largest Survey," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(5), pages 297-307, September.
    4. Johan Graafland, 2020. "When Does Economic Freedom Promote Well Being? On the Moderating Role of Long-Term Orientation," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(1), pages 127-153, May.
    5. Johan Graafland & Niels Noorderhaven, 2020. "Culture and institutions: How economic freedom and long-term orientation interactively influence corporate social responsibility," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(6), pages 1034-1043, August.
    6. Yawen Gao & Jibao Gu & Hefu Liu, 2019. "Interactive effects of various institutional pressures on corporate environmental responsibility: Institutional theory and multilevel analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 724-736, July.
    7. Silvia Cantele & Alessandro Zardini, 2020. "What drives small and medium enterprises towards sustainability? Role of interactions between pressures, barriers, and benefits," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(1), pages 126-136, January.
    8. Hartmann, Julia & Uhlenbruck, Klaus, 2015. "National institutional antecedents to corporate environmental performance," Journal of World Business, Elsevier, vol. 50(4), pages 729-741.
    9. Anthony Goerzen & Michael Sartor & Kristin Brandl & Stacey Fitzsimmons, 2023. "Widening the lens: Multilevel drivers of firm corporate social performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(1), pages 42-60, February.
    10. Pisani, Niccolò & Kourula, Arno & Kolk, Ans & Meijer, Renske, 2017. "How global is international CSR research? Insights and recommendations from a systematic review," Journal of World Business, Elsevier, vol. 52(5), pages 591-614.
    11. Johan Graafland & Niels Noorderhaven, 2020. "Technological Competition, Innovation Motive and Corporate Social Responsibility: Evidence from Top Managers of European SMEs," De Economist, Springer, vol. 168(1), pages 1-22, March.
    12. Sadok El Ghoul & Omrane Guedhami & Robert Nash & Ajay Patel, 2019. "New Evidence on the Role of the Media in Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 154(4), pages 1051-1079, February.
    13. Bruno S. Frey & Margit Osterloh, "undated". "Yes, Managers Should be Paid Like Bureaucrats," IEW - Working Papers 187, Institute for Empirical Research in Economics - University of Zurich.
    14. Guillén León, 2017. "Evaluation of the perception and application of social responsibility practices in micro, small and medium companies in Barranquilla. An analysis from the theory of Stakeholders," Estudios Gerenciales, Universidad Icesi, vol. 33(144), pages 261-270, August.
    15. Khine Kyaw & Mojisola Olugbode & Barbara Petracci, 2017. "The Role of the Institutional Framework in the Relationship between Earnings Management and Corporate Social Performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(6), pages 543-554, November.
    16. Demirbag, Mehmet & Wood, Geoffrey & Makhmadshoev, Dilshod & Rymkevich, Olga, 2017. "Varieties of CSR: Institutions and Socially Responsible Behaviour," International Business Review, Elsevier, vol. 26(6), pages 1064-1074.
    17. María Consuelo Pucheta‐Martínez & Isabel Gallego‐Álvarez & Inmaculada Bel‐Oms, 2020. "Varieties of capitalism, corporate governance mechanisms, and stakeholder engagement: An overview of coordinated and liberal market economies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 731-748, March.
    18. Ki‐Hoon Lee & Donghoon Shin & Minwoo Lee, 2023. "Business group affiliation and corporate sustainability performance in emerging economies: Evidence from South Korea," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4503-4518, November.
    19. Jiang, Guoliang Frank & Jung, Jae C. & Makino, Shige, 2020. "Parent Firm Corporate Social Responsibility and Overseas Subsidiary Performance: A Signaling Perspective," Journal of World Business, Elsevier, vol. 55(6).
    20. Juan Felipe Reyes‐Rodríguez & John P. Ulhøi & Henning Madsen, 2016. "Corporate Environmental Sustainability in Danish SMEs: A Longitudinal Study of Motivators, Initiatives, and Strategic Effects," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(4), pages 193-212, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:74:y:2019:i:3:d:10.1007_s10640-019-00361-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.