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What drives environmental practices of SMEs?

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  • Brigitte Hoogendoorn
  • Peter van der Zwan
  • Daniela Guerra

Abstract

The objective of this paper is to develop a better understanding of how and why small and medium-sized enterprises (SMEs) engage in environmental 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 of SMEs is not justified because of the substantial impact of SMEs on the economy and the natural environment. By using unique data for almost 9,000 SMEs across 12 sectors in 38 countries, we study the influences of firm, sector and country 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 and the stringency of environmental legislation at the country level. Moreover, the dominant idea that small firms are reluctant to invest in environmental practices is clearly more nuanced: size indeed matters however only when greening processes are concerned.

Suggested Citation

  • Brigitte Hoogendoorn & Peter van der Zwan & Daniela Guerra, 2014. "What drives environmental practices of SMEs?," Scales Research Reports H201405, EIM Business and Policy Research.
    • Handle: RePEc:eim:papers:h201405
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    File URL: http://www.entrepreneurship-sme.eu/pdf-ez/H201405.pdf
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    Cited by:

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    3. Claudia Ghisetti & Susanna Mancinelli & Massimiliano Mazzanti & Mariangela Zoli, 2017. "Financial barriers and environmental innovations: evidence from EU manufacturing firms," Climate Policy, Taylor & Francis Journals, vol. 17(0), pages 131-147, June.
    4. Dakshina G. De Silva & Timothy P. Hubbard & Robert P. McComb & Anita R. Schiller, 2017. "Entry, growth and survival in the green industry," Regional Studies, Taylor & Francis Journals, vol. 51(12), pages 1774-1785, December.
    5. Francesco Testa & Natalia Marzia Gusmerottia & Filippo Corsini & Emilio Passetti & Fabio Iraldo, 2016. "Factors Affecting Environmental Management by Small and Micro Firms: The Importance of Entrepreneurs’ Attitudes and Environmental Investment," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(6), pages 373-385, November.

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