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What drives environmental practices of SMEs?

Author

Listed:
  • Brigitte Hoogendoorn
  • Daniela Guerra
  • Peter Zwan

Abstract

The objective of this paper is to develop a better understanding of what drives small and medium-sized enterprises (SMEs) to engage in environmental practices, and whether the drivers differ across types of practices. Two types of environmental practices are distinguished: practices related to production processes (greening processes) and practices related to products and services (greening product and service offerings). Despite a growing literature on socially responsible behavior of large firms, the role of SMEs remains underexposed. This neglect is remarkable given the substantial impact of SMEs on the economy and the natural environment. By using unique data for almost 8,000 SMEs across 12 sectors in 36 countries, we study the influence of firm characteristics on SMEs’ environmental behavior. Our results suggest that different characteristics have dissimilar influences on both types of environmental practices such as the type of customers served. Stringent environmental legislation encourages firms to actively take on environmental activities, but only in case of green products and services. Moreover, the dominant idea that small firms are reluctant to invest in environmental practices is clearly more nuanced: firm size matters most for engagement in greening processes. Finally, SMEs active in tangible sectors and that receive financial support are more involved in either type of environmental practices. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Brigitte Hoogendoorn & Daniela Guerra & Peter Zwan, 2015. "What drives environmental practices of SMEs?," Small Business Economics, Springer, vol. 44(4), pages 759-781, April.
    • Handle: RePEc:kap:sbusec:v:44:y:2015:i:4:p:759-781
    DOI: 10.1007/s11187-014-9618-9
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    More about this item

    Keywords

    SME; Environmental practice; Stakeholder theory; Corporate social responsibility; Eurobarometer; L26; M13; O31; Q56;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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