The role of corporate environmental ethics in shaping environmental management accounting adoption under the institutional theory
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DOIhttp://dx.doi.org/10.21511/ee.15(1).2024.03
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Article InfoVolume 15 2024, Issue #1, pp. 32-45
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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).
- Keywords
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JEL Classification (Paper profile tab)L51, M41, M14, L00
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References45
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Tables9
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Figures2
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- Figure 1. Research framework
- Figure 2. Structural model of PLS-SEM
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- 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
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