The role of corporate environmental ethics in shaping environmental management accounting adoption under the institutional theory

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This study aims to investigate the complex association between institutional pressure, adoption of environmental management accounting (EMA), and financial performance, with corporate environmental ethics as a moderating component. It explains why and how firms adopt EMA in response to institutional demand to factor environmental factors into their strategic decision-making processes. Quantitative information is gathered using a structured questionnaire from 256 manufacturing companies’ environmental managers and executives who monitor environmental practices and policies and decision-makers who shape business environmental ethics and strategy in the Indian state of Karnataka. Data are analyzed using SmartPLS 4, and PLS-SEM tests the hypotheses. The results show that coercive pressure (β = 0.244, p = 0.000), mimetic pressure (β = 0.221, p = 0.000), and normative pressure (β = 0.209, p = 0.000) have a major role in determining the rate of EMA adoption. It is further identified that EMA adoption (β = 0.217, p = 0.000) positively influences the organization's financial performance. Furthermore, EMA adoption mediates the relationship between coercive pressure (β = 0.053, p = 0.000), normative pressure (β = 0.045, p = 0.000), mimetic pressure (β = 0.048, p = 0.000), and firm’s financial performance. Coercive pressure is associated with higher EMA adoption, although the impact of this link is moderated by corporate environmental ethics (β = 0.069, p = 0.000).

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    • Figure 1. Research framework
    • Figure 2. Structural model of PLS-SEM
    • Table 1. Demographics of respondents
    • Table 2. Reliability and validity
    • Table 3. Discriminant validity
    • Table 4. R-Square results
    • Table 5. f-square statistics
    • Table 6. Direct effects
    • Table 7. Indirect effects
    • Table 8. Moderating effects
    • Table A1. Questionnaire: Items for survey scale
    • Conceptualization
      Chetanraj D. B., J. P. Senthil Kumar, Velaga Sri Sai, Ramegowda K. V.
    • Data curation
      Chetanraj D. B., J. P. Senthil Kumar
    • Formal Analysis
      Chetanraj D. B., J. P. Senthil Kumar, Velaga Sri Sai, Ramegowda K. V.
    • Investigation
      Chetanraj D. B., J. P. Senthil Kumar, Velaga Sri Sai, Ramegowda K. V.
    • Methodology
      Chetanraj D. B., J. P. Senthil Kumar, Velaga Sri Sai, Ramegowda K. V.
    • Software
      Chetanraj D. B., J. P. Senthil Kumar
    • Supervision
      Chetanraj D. B., J. P. Senthil Kumar, Velaga Sri Sai, Ramegowda K. V.
    • Validation
      Chetanraj D. B., J. P. Senthil Kumar
    • Visualization
      Chetanraj D. B., J. P. Senthil Kumar
    • Writing – original draft
      Chetanraj D. B., J. P. Senthil Kumar, Velaga Sri Sai, Ramegowda K. V.
    • Writing – review & editing
      Chetanraj D. B., J. P. Senthil Kumar, Velaga Sri Sai, Ramegowda K. V.
    • Project administration
      J. P. Senthil Kumar