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Environmental Protection in Environmentally Reactive Firms: Lessons from Corporate Argentina

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Abstract

We propose a model of planned corporate environmental behaviour that emphasises the values and attitudes of managers towards the environment, environmental intentions and the context in which these intentions are formed and translated into actual performance. In particular, we focus on the extent to which environmentally reactive (as oppose to pro-active) managers influence the environmental performance of their firms. We identify the factors that mitigate or accentuate the effects of environmental “reactivism”—i.e. a mind-set shared by those who assign to the state the responsibility of protecting the environment. We generate a series of hypotheses and use structural equation modelling to test them in the context of a unique dataset of Argentinean firms. Our system’s approach to corporate environmental behaviour explains approximatively 70 % of the variation in reported environmental performance across firms while highlighting elements of the model that may potentially be influenced by policy. Amongst other things, our empirical results suggest that stakeholder pressures can be an effective tool in the development of pro-environmental attitudes (and environmental intentions in the case of small firms) and in so doing offset some of the negative effects of environmental reactivism on environmental performance. Our paper highlights a number of other important implications for the design and implementation of environmental policies that account for human managerial determinants of corporate behaviour and social factors.

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Notes

  1. Note that previous research has identified both external and internal barriers (e.g. Post and Altman 1994) although empirical studies suggest the latter are more powerful (Ruiz-Tagle 2006). We empirically tested the relevance of external barriers in our model but found they were not statistically significant. They were removed from the final version on grounds of parsimony.

  2. All firms were first stratified under the SIC Revision 3 classification and subsequently by plant size as measured by number of employees. Within these strata, firms were ranked by their level of environmental impact as measured by the NCA or ‘Level of Environmental Complexity’ which ranges between 20 and 80. This index is computed by a formula that uses a number of environmental impact parameters such as volume of effluents, concentration of polluting substances, type of environmental impact as well as features of the area surrounding the plant. The Environmental Agency uses NCA to classify firms according to whether they are Type I (low impact), Type II (medium impact), Type III (high impact), or no impact in accordance with Law 11.459. See Vazquez Brust (2007) for details of the sampling method.

  3. For each construct, the three items with the highest factor loadings are used to anchor three parcels. The three items with the next highest item-to-construct loadings were added to the anchors in an inverted order. The highest loaded item from the anchor items are then matched with the lowest loaded item from the second selection…so on and so forth (see Little et al (2002), p. 166 for more details).

  4. Multicollinearity was also assessed by calculating the squared multiple correlations between each variable and all the rest with values greater than 0.90 being of concern (Kline 1998). This value was not reached by any of the retained items. We also assessed collinearity by computing the tolerance and variance inflationary factor (VIF) for each of the variables. If a set of explanatory variables is uncorrelated, then its VIF will be equal or close to 1. In common practice, a tolerance of less than 0.20 and/or a VIF of 5 and above indicates a multicollinearity problem. With VIF values ranging from 1.138 to 1.640, multicollinearity was not felt to be an issue. Issues related to kurtosis and skewness of the sample data were not felt to be problematic with values ranging from 0.005 to 1.149 for the former and 0.046 to 0.718 for the latter.

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Authors and Affiliations

  1. Graduate School of Public and International Affairs, Faculty of Social Sciences, University of Ottawa, 120 University Drive, Ottawa, ON, K1N 6N5, Canada

    Catherine Liston-Heyes

  2. School of Management, Royal Holloway College, University of London, Egham, Surrey, TW20 OEX, UK

    Diego Alfonso Vazquez Brust

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  1. Catherine Liston-Heyes
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  2. Diego Alfonso Vazquez Brust
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Correspondence to Catherine Liston-Heyes.

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C. Liston-Heyes and D. A. Vazquez Brust: The co-authors are listed in alphabetical order—both have contributed equally to this article.

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Liston-Heyes, C., Vazquez Brust, D.A. Environmental Protection in Environmentally Reactive Firms: Lessons from Corporate Argentina. J Bus Ethics 135, 361–379 (2016). https://doi.org/10.1007/s10551-014-2473-4

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