IDEAS home Printed from https://ideas.repec.org/a/eee/worbus/v56y2021i6s1090951621000584.html
   My bibliography  Save this article

Proactive Environmental Strategy, Foreign Institutional Pressures, and Internationalization of Chinese SMEs

Author

Listed:
  • Ko, Dr. Wai Wai
  • Chen, Prof. Yantai
  • Chen, Dr. Cheng-Hao Steve
  • Wu, Dr. Meng-Shan Sharon
  • Liu, Prof. Gordon

Abstract

We explain how proactive environmental strategy affects emerging country small- and medium-sized enterprise (SME) internationalization and the contingency roles of foreign institutional environment. A survey of 217 Chinese SMEs reveals the positive effects of proactive environmental strategy on inward-focused and outward-focused internationalization activities. The results also show that foreign institutional pressures influence such effects in nonlinear ways. That is, a medium level of foreign environmental regulatory pressure maximizes the positive effects of proactive environmental strategy on inward-focused internationalization activities, while a medium level of foreign environmental customer pressure maximizes the positive effects of proactive environmental strategy on outward-focused internationalization activities.

Suggested Citation

  • Ko, Dr. Wai Wai & Chen, Prof. Yantai & Chen, Dr. Cheng-Hao Steve & Wu, Dr. Meng-Shan Sharon & Liu, Prof. Gordon, 2021. "Proactive Environmental Strategy, Foreign Institutional Pressures, and Internationalization of Chinese SMEs," Journal of World Business, Elsevier, vol. 56(6).
    • Handle: RePEc:eee:worbus:v:56:y:2021:i:6:s1090951621000584
    DOI: 10.1016/j.jwb.2021.101247
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1090951621000584
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jwb.2021.101247?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. Kostova, Tatiana & Marano, Valentina & Tallman, Stephen, 2016. "Headquarters–subsidiary relationships in MNCs: Fifty years of evolving research," Journal of World Business, Elsevier, vol. 51(1), pages 176-184.
    2. Valentina Marano & Peter Tashman & Tatiana Kostova, 2017. "Escaping the iron cage: Liabilities of origin and CSR reporting of emerging market multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 386-408, April.
    3. Dirk De Clercq & Dimo Dimov & Narongsak (Tek) Thongpapanl, 2013. "Organizational Social Capital, Formalization, and Internal Knowledge Sharing in Entrepreneurial Orientation Formation," Entrepreneurship Theory and Practice, , vol. 37(3), pages 505-537, May.
    4. Bagheri, Mahshid & Mitchelmore, Siwan & Bamiatzi, Vassiliki & Nikolopoulos, Konstantinos, 2019. "Internationalization Orientation in SMEs: The Mediating Role of Technological Innovation," Journal of International Management, Elsevier, vol. 25(1), pages 121-139.
    5. Arora, Punit & De, Prabal, 2020. "Environmental sustainability practices and exports: The interplay of strategy and institutions in Latin America," Journal of World Business, Elsevier, vol. 55(4).
    6. Park, Byung Il & Ghauri, Pervez N., 2015. "Determinants influencing CSR practices in small and medium sized MNE subsidiaries: A stakeholder perspective," Journal of World Business, Elsevier, vol. 50(1), pages 192-204.
    7. Cheng, Hsiang-Lin & Yu, Chow-Ming Joseph, 2008. "Institutional pressures and initiation of internationalization: Evidence from Taiwanese small- and medium-sized enterprises," International Business Review, Elsevier, vol. 17(3), pages 331-348, June.
    8. Prakash,Aseem & Potoski,Matthew, 2006. "The Voluntary Environmentalists," Cambridge Books, Cambridge University Press, number 9780521677721.
    9. Martín-Tapia, Inmaculada & Aragón-Correa, J. Alberto & Rueda-Manzanares, Antonio, 2010. "Environmental strategy and exports in medium, small and micro-enterprises," Journal of World Business, Elsevier, vol. 45(3), pages 266-275, July.
    10. Zhu, Qinghua & Sarkis, Joseph & Cordeiro, James J. & Lai, Kee-Hung, 2008. "Firm-level correlates of emergent green supply chain management practices in the Chinese context," Omega, Elsevier, vol. 36(4), pages 577-591, August.
    11. Ricky Y. K. Chan & Katherine H. Y. Ma, 2016. "Environmental Orientation of Exporting SMEs from an Emerging Economy: Its Antecedents and Consequences," Management International Review, Springer, vol. 56(5), pages 597-632, October.
    12. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    13. Magali A. Delmas & Michael W. Toffel, 2008. "Organizational responses to environmental demands: opening the black box," Strategic Management Journal, Wiley Blackwell, vol. 29(10), pages 1027-1055, October.
    14. Aguilera-Caracuel, Javier & Hurtado-Torres, Nuria Esther & Aragón-Correa, Juan Alberto & Rugman, Alan M., 2013. "Differentiated effects of formal and informal institutional distance between countries on the environmental performance of multinational enterprises," Journal of Business Research, Elsevier, vol. 66(12), pages 2657-2665.
    15. Marco Pesce & Ilaria Tamai & Deyan Guo & Andrea Critto & Daniele Brombal & Xiaohui Wang & Hongguang Cheng & Antonio Marcomini, 2020. "Circular Economy in China: Translating Principles into Practice," Sustainability, MDPI, vol. 12(3), pages 1-31, January.
    16. Chieh-Yu Lin & Yi-Hui Ho, 2011. "Determinants of Green Practice Adoption for Logistics Companies in China," Journal of Business Ethics, Springer, vol. 98(1), pages 67-83, January.
    17. Christian Schwens & Julia Eiche & Ruediger Kabst, 2011. "The Moderating Impact of Informal Institutional Distance and Formal Institutional Risk on SME Entry Mode Choice," Journal of Management Studies, Wiley Blackwell, vol. 48(2), pages 330-351, March.
    18. Jean-François Hennart & Antonio Majocchi & Emanuele Forlani, 2019. "The myth of the stay-at-home family firm: How family-managed SMEs can overcome their internationalization limitations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(5), pages 758-782, July.
    19. Szu‐Tung Lin & Han‐Jen Niu, 2018. "Green consumption: Environmental knowledge, environmental consciousness, social norms, and purchasing behavior," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1679-1688, December.
    20. Xiaodong Xu & Saixing Zeng & Hongquan Chen, 2018. "Signaling good by doing good: How does environmental corporate social responsibility affect international expansion?," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 946-959, November.
    21. Deng, Ping & Zhang, Shuo, 2018. "Institutional quality and internationalization of emerging market firms: Focusing on Chinese SMEs," Journal of Business Research, Elsevier, vol. 92(C), pages 279-289.
    22. Torres de Oliveira, Rui & Nguyen, Tam & Liesch, Peter & Verreynne, Martie-Louise & Indulska, Marta, 2021. "Exporting to escape and learn: Vietnamese manufacturers in global value chains," Journal of World Business, Elsevier, vol. 56(4).
    23. Zhu, Qinghua, 2016. "Institutional pressures and support from industrial zones for motivating sustainable production among Chinese manufacturers," International Journal of Production Economics, Elsevier, vol. 181(PB), pages 402-409.
    24. Wang, Wei & Ma, Hao, 2018. "Export strategy, export intensity and learning: Integrating the resource perspective and institutional perspective," Journal of World Business, Elsevier, vol. 53(4), pages 581-592.
    25. Constantine S. Katsikeas & Constantinos N. Leonidou & Athina Zeriti, 2016. "Eco-friendly product development strategy: antecedents, outcomes, and contingent effects," Journal of the Academy of Marketing Science, Springer, vol. 44(6), pages 660-684, November.
    26. Martin-Tapia, Inmaculada & Aragon-Correa, Juan Alberto & Senise-Barrio, Maria Eugenia, 2008. "Being green and export intensity of SMEs: The moderating influence of perceived uncertainty," Ecological Economics, Elsevier, vol. 68(1-2), pages 56-67, December.
    27. Lianxi Zhou & Wei-ping Wu & Xueming Luo, 2007. "Internationalization and the performance of born-global SMEs: the mediating role of social networks," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 673-690, July.
    28. Ricky Y. K. Chan, 2005. "Does the Natural‐Resource‐Based View of the Firm Apply in an Emerging Economy? A Survey of Foreign Invested Enterprises in China," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 625-672, May.
    29. Prakash,Aseem & Potoski,Matthew, 2006. "The Voluntary Environmentalists," Cambridge Books, Cambridge University Press, number 9780521860413.
    30. Christine Oliver, 1997. "Sustainable competitive advantage: combining institutional and resource‐based views," Strategic Management Journal, Wiley Blackwell, vol. 18(9), pages 697-713, October.
    31. Zhang, Xiao & Ma, Xufei & Wang, Yue & Li, Xin & Huo, Dong, 2016. "What drives the internationalization of Chinese SMEs? The joint effects of international entrepreneurship characteristics, network ties, and firm ownership," International Business Review, Elsevier, vol. 25(2), pages 522-534.
    32. G. Tomas M. Hult & David J. Ketchen & Mathias Arrfelt, 2007. "Strategic supply chain management: Improving performance through a culture of competitiveness and knowledge development," Strategic Management Journal, Wiley Blackwell, vol. 28(10), pages 1035-1052, October.
    33. Yanwen Sheng & Jinli Zhao & Xuebo Zhang & Jinping Song & Yi Miao, 2019. "Innovation efficiency and spatial spillover in urban agglomerations: A case of the Beijing‐Tianjin‐Hebei, the Yangtze River Delta, and the Pearl River Delta," Growth and Change, Wiley Blackwell, vol. 50(4), pages 1280-1310, December.
    34. Robert Salomon & Zheying Wu, 2012. "Institutional distance and local isomorphism strategy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(4), pages 343-367, May.
    35. Peter Hertenstein & Dylan Sutherland & John Anderson, 2017. "Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry," Asia Pacific Journal of Management, Springer, vol. 34(1), pages 69-96, March.
    36. Christoph Trumpp & Thomas Guenther, 2017. "Too Little or too much? Exploring U‐shaped Relationships between Corporate Environmental Performance and Corporate Financial Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 26(1), pages 49-68, January.
    37. Klaus E. Meyer & Saul Estrin & Sumon Kumar Bhaumik & Mike W. Peng, 2009. "Institutions, resources, and entry strategies in emerging economies," Strategic Management Journal, Wiley Blackwell, vol. 30(1), pages 61-80, January.
    38. Petra Christmann & Glen Taylor, 2001. "Globalization and the Environment: Determinants of Firm Self-Regulation in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 439-458, September.
    39. Ying Luo & Xiaowen Jie & Xiaoping Li & Liming Yao, 2018. "Ranking Chinese SMEs Green Manufacturing Drivers Using a Novel Hybrid Multi-Criterion Decision-Making Model," Sustainability, MDPI, vol. 10(8), pages 1-23, July.
    40. Glen Dowell & Stuart Hart & Bernard Yeung, 2000. "Do Corporate Global Environmental Standards Create or Destroy Market Value?," Management Science, INFORMS, vol. 46(8), pages 1059-1074, August.
    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. Xiaocui Li & Nengmin Wang & Bin Jiang & Tao Jia, 2023. "Institutional pressures and proactive environmental strategy: The mediating effect of top managerial environment attitude and the moderating effect of new media pressure," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 6106-6123, December.
    2. Lasse Torkkeli & Susanne Durst, 2022. "Corporate Social Responsibility of SMEs: Learning Orientation and Performance Outcomes," Sustainability, MDPI, vol. 14(11), pages 1-12, May.
    3. Ali, Imran & Arslan, Ahmad & Tarba, Shlomo & Mainela, Tuija, 2023. "Supply chain resilience to climate change inflicted extreme events in agri-food industry: The role of social capital and network complexity," International Journal of Production Economics, Elsevier, vol. 264(C).

    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. Manolopoulos, Dimitris & Chatzopoulou, Erifili & Kottaridi, Constantina, 2018. "Resources, home institutional context and SMEs’ exporting: Direct relationships and contingency effects," International Business Review, Elsevier, vol. 27(5), pages 993-1006.
    2. Holtbrügge, Dirk & Dögl, Corinna, 2012. "How international is corporate environmental responsibility? A literature review," Journal of International Management, Elsevier, vol. 18(2), pages 180-195.
    3. Roger Leonard Burritt & Katherine Leanne Christ & Hussain Gulzar Rammal & Stefan Schaltegger, 2020. "Multinational Enterprise Strategies for Addressing Sustainability: the Need for Consolidation," Journal of Business Ethics, Springer, vol. 164(2), pages 389-410, June.
    4. Luis Alfonso Dau & Aya S. Chacar & Marjorie A. Lyles & Jiatao Li, 2022. "Informal institutions and international business: Toward an integrative research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 985-1010, August.
    5. Gozal Ahmadova & Blanca L. Delgado-Márquez & Javier Aguilera-Caracuel, 2023. "Reporting of environmental policies and internationalization of Asia–Pacific firms: the moderating role of innovation as a source of legitimacy," Asian Business & Management, Palgrave Macmillan, vol. 22(4), pages 1243-1273, September.
    6. Sushma Kumari & Vikrant Shirodkar & Steven McGuire, 2023. "Pre-Liberalization Foundations and the FDI-Based Internationalization of SMEs from Emerging Markets," Management International Review, Springer, vol. 63(4), pages 641-671, August.
    7. Eduardo Duque‐Grisales & Javier Aguilera‐Caracuel & Jaime Guerrero‐Villegas & Encarnación García‐Sánchez, 2020. "Does green innovation affect the financial performance of Multilatinas? The moderating role of ISO 14001 and R&D investment," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3286-3302, December.
    8. Wu, Guo-Ciang & Ding, Jyh-Hong & Chen, Ping-Shun, 2012. "The effects of GSCM drivers and institutional pressures on GSCM practices in Taiwan’s textile and apparel industry," International Journal of Production Economics, Elsevier, vol. 135(2), pages 618-636.
    9. Hua-Hung (Robin) Weng & Ja-Shen Chen & Pei-Ching Chen, 2015. "Effects of Green Innovation on Environmental and Corporate Performance: A Stakeholder Perspective," Sustainability, MDPI, vol. 7(5), pages 1-30, April.
    10. Xu, Kai & Hitt, Michael A. & Brock, David & Pisano, Vincenzo & Huang, Lulu S.R., 2021. "Country institutional environments and international strategy: A review and analysis of the research," Journal of International Management, Elsevier, vol. 27(1).
    11. Ruey-Jer “Bryan” Jean & Danchi Tan, 2019. "The Effect of Institutional Capabilities on E-Business Firms’ International Performance," Management International Review, Springer, vol. 59(4), pages 593-616, August.
    12. Penghua Qiao & Mengli Lv & Yuping Zeng, 2020. "R&D Intensity, Domestic Institutional Environment, and SMEs’ OFDI in Emerging Markets," Management International Review, Springer, vol. 60(6), pages 939-973, December.
    13. Il Park, Byung & Xiao, Shufeng (Simon), 2021. "Doing good by combating bad in the digital world: Institutional pressures, anti-corruption practices, and competitive implications of MNE foreign subsidiaries," Journal of Business Research, Elsevier, vol. 137(C), pages 194-205.
    14. Javier Aguilera-Caracuel & Juan Aragón-Correa & Nuria Hurtado-Torres & Alan Rugman, 2012. "The Effects of Institutional Distance and Headquarters’ Financial Performance on the Generation of Environmental Standards in Multinational Companies," Journal of Business Ethics, Springer, vol. 105(4), pages 461-474, February.
    15. Tang, Ailie K.Y. & Lai, Kee-hung & Cheng, T.C.E., 2016. "A Multi-research-method approach to studying environmental sustainability in retail operations," International Journal of Production Economics, Elsevier, vol. 171(P3), pages 394-404.
    16. Tajeddin, Mahdi & Farashahi, Mehdi & Moghaddam, Kaveh & Simba, Amon & Edwards, Gwyneth, 2023. "Internationalization of Emerging Economy SMEs: A Tripod Approach," Journal of International Management, Elsevier, vol. 29(1).
    17. Grekova, K. & Bremmers, H.J. & Trienekens, J.H. & Kemp, R.G.M. & Omta, S.W.F., 2014. "Extending environmental management beyond the firm boundaries: An empirical study of Dutch food and beverage firms," International Journal of Production Economics, Elsevier, vol. 152(C), pages 174-187.
    18. Zhang, Hongjuan & Young, Michael N. & Tan, Justin & Sun, Weizheng, 2018. "How Chinese companies deal with a legitimacy imbalance when acquiring firms from developed economies," Journal of World Business, Elsevier, vol. 53(5), pages 752-767.
    19. Arindam Mondal & Somnath Lahiri & Sougata Ray, 2021. "Strategic Response to Inward Foreign Direct Investment: A Study of Indian Family Firms," Management International Review, Springer, vol. 61(2), pages 207-233, April.
    20. Liu, Yulong & Yu, Yang, 2018. "Institutions, firm resources and the foreign establishment mode choices of Chinese firms: The moderating role of home regional institutional development," Journal of Business Research, Elsevier, vol. 93(C), pages 111-121.

    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:eee:worbus:v:56:y:2021:i:6:s1090951621000584. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/description#description .

    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.