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Small Business Economics

, Volume 44, Issue 4, pp 759–781 | Cite as

What drives environmental practices of SMEs?

  • Brigitte HoogendoornEmail author
  • Daniela Guerra
  • Peter van der Zwan
Article

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.

Keywords

SME Environmental practice Stakeholder theory Corporate social responsibility Eurobarometer 

JEL Classifications

L26 M13 O31 Q56 

Notes

Acknowledgments

We would like to thank Dr. Luca Barani and Dr. Isabel Grilo of the European Commission for providing and explaining data from the Flash Eurobarometer 342. The views expressed here are those of the authors and should not be attributed to the European Commission. In addition, we would like to express our appreciation to participants of the RENT conference in Vilnius, Lithuania (November, 2013) and the SCALES seminar in Rotterdam, The Netherlands (December, 2013) where earlier version of the paper were presented. The paper was written with financial support from Erasmus School of Economics and the research program SCALES carried out by Panteia/EIM and financed by the Dutch Ministry of Economic Affairs. Authors Hoogendoorn and Van der Zwan were affiliated with Panteia/EIM in Zoetermeer at the time this paper was written.

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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Brigitte Hoogendoorn
    • 1
    Email author
  • Daniela Guerra
    • 2
  • Peter van der Zwan
    • 1
  1. 1.Erasmus School of EconomicsErasmus University RotterdamRotterdamThe Netherlands
  2. 2.Center for Innovation, Technology and Policy ResearchInstituto Superior Técnico, Universidade de LisboaLisbonPortugal

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