Being green and export intensity of SMEs: The moderating influence of perceived uncertainty

E CO L O G I CA L E CO N O MI CS 68 ( 20 0 8 ) 5 6–6 7

a v a i l a b l e a t w w w. s c i e n c e d i r e c t . c o m

w w w. e l s e v i e r. c o m / l o c a t e / e c o l e c o n

ANALYSIS

Being green and export intensity of SMEs: The moderating influence of perceived uncertainty☆ Inmaculada Martin-Tapia⁎, Juan Alberto Aragon-Correa 1 , Maria Eugenia Senise-Barrio 2 University of Granada, School of Economics and Business, Department of Management, Campus de Cartuja, s.n., E-18071 Granada, Spain

AR TIC LE I N FO

ABS TR ACT

Article history:

Although the literature has already begun to look at the relationship between pursuing an

Received 4 November 2006

environmental strategy and undertaking export activities, studies so far have focused on large

Received in revised form

multinationals rather than on small- and medium-sized enterprises (SMEs). Yet SMEs account for

30 October 2007

around half of the GDP in both the US and the EU, and are responsible worldwide for 60% of carbon

Accepted 28 January 2008

emissions. Moreover, the literature until now has paid very little attention to the influence that

Available online 17 March 2008

uncertainty has on the relationship between international trade and environmental strategies. The authors tackle this relationship here. Using direct interviews with the CEOs of 145 export

Keywords:

firms operating in Spain's food industry, the results show that a proactive environmental strategy

Natural environment

is positively related to a company's export performance. In addition, the authors also find that

Proactive environmental strategies

general uncertainty imposes a moderating effect on the relationship between proactive

Uncertainty

environmental strategies and export intensity for SMEs. The final results suggest some

Small firms

appealing differences in the role of perceived uncertainty for SMEs and large firms. © 2008 Elsevier B.V. All rights reserved.

1.

Introduction

The value of exports around the world grew from $40bn in 1945 to more than $4500bn in 1993, reaching $9100bn in 2004 (World Bank, 2006). This growth in world trade has also been accompanied by an increasing awareness of environmental problems related to business activity. In this context, the relationship between companies' environmental strategies and internationalisation is receiving increased attention, but this relationship has been received with some contention in business literature (Christmann and Taylor, 2001). While some argue that globalisa-

☆

We would like to thank all those managers of our sample who contributed their time and ideas to this study. This research has partially funded by the Fundación BBVA, Research Group SEJ014 and Project SEJ2007-67833 (European Commission). ⁎ Corresponding author. Tel.: +34 958 24 0937; fax: +34 958 24 6222. E-mail addresses: [email protected] (I. Martin-Tapia), [email protected] (J.A. Aragon-Correa), [email protected] (M.E. Senise-Barrio). 1 Tel.: +34 958 24 3705; fax: +34 958 24 6222. 2 Tel.: +34 958 24 3708; fax: +34 958 24 6222.

tion offers incentives for careless behaviour in the environmental arena (King and Lenox, 2000), others propose that increased environmental effort can offer a competitive advantage (Porter and Van der Linde, 1995a,b). Empirical evidence has primarily come from samples of multinationals and found some advantages for those multinationals developing proactive environmental strategies (PES)3 (e.g. Christmann and Taylor, 2001; Nehrt, 1998; Rugman and Verbeke, 1998), but small and medium firms have been almost absent from these studies. While it is true that increasing globalisation has led to the rise of multinational corporations, small- and medium-sized enterprises (SMEs4) have also played a very relevant role in this process. Export is the main international form used by

3 Proactive environmental strategy (PES) is normally delimited as the voluntary environmental practices that the company follows and that goes beyond environmental laws in order to reduce or minimize environmental impacts (Aragón-Correa, 1998; Sharma and Vredenburg, 1998; Buysse and Verbeke, 2003). 4 For the purposes of this study, we consider SMEs to be those firms employing fewer than 250 employees (EU, 2003).

0921-8009/$ – see front matter © 2008 Elsevier B.V. All rights reserved. doi:10.1016/j.ecolecon.2008.01.032

EC O LO G I CA L E C O N O M I CS 6 8 ( 2 00 8 ) 5 6–6 7

firms and almost the only one used by SMEs (Leonidou and Katsikeas, 1996), SMEs account for around half of the GDP in both the US and the EU (Karmel and Byron, 2002), and finally SMEs are responsible for 70% of the pollution (Smith and Kemp, 1998; Hillary, 2000) and 60% of the carbon emissions from world industry (Marshall, 1998). Hence, the relationship between export and environmental proactivity in SMEs could benefit from more attention by researchers. Additionally, from a theoretical point of view, it is important to understand that SMEs are not a smaller replica of large firms. They differ fundamentally from large firms in many ways, and these differences could drive the international performance of SMEs in unique ways (Lu and Beamish, 2001; Piercy, Kaleka and Katsikeas, 1998). Size offers large firms the potential to leverage their market power, economies of scale, broad product lines, better access to financial markets, and better legal support or advice in using their environmental progress to obtain international advantages. On the other hand, SMEs' managers need to analyse whether the extra effort and provision of resources demanded by environmental proactivity are balanced by the generation of capabilities with potential to be useful in the international arena, or if those efforts are limiting their potential to invest resources in international expansion. The distinctions between large and small firms could make their pursuit of competitive advantage differ. In other words, while the intensive use or availability of resources by large firms may be enough to obtain the positive effects of environmental proactivity due to, for instance, multiple opportunities to reinforce a responsible image in their international marketing, the advantages for SMEs result from a more complex system of relationships: SMEs have to determine if the generation of capabilities through environmental proactivity balances the required resources (in a context of scarce resources) in order to achieve a greater export intensity. Therefore, three reasons suggest the importance of wondering whether SMEs can gain competitive advantage by ‘being green’: the socio-economic importance of the topic and the debate on how the relationship works, the absence of previous analysis, and the theoretical logic of separately analysing SMEs and larger firms. From a theoretical point of view, our paper builds on the relevance of organizational capabilities even if they are peculiar to certain types of firms (SMEs for our analysis). Our theoretical logic states that lack of resources is not a definitive obstacle for SMEs' pursuit of PES–as assumed so far by previous studies–and our paper draws on a resource-based view (Barney, 1991) to offer theoretical arguments on how capabilities linked to PES may be particularly useful for SMEs in order to improve international performance. We also pay special attention to the potential influence of the general business environment on the analysed relationship. The absence of references to business environmental variables has been one of the most strongly criticised aspects in the literature about resource- and capabilities-based view (Barney, 2001; Priem and Butler, 2001a,b). In accordance with contingent approaches (Lawrence and Lorsch, 1967), we think that the specific analysis of the general or business environment makes it possible to give the resource-based view a certain contingent approach (Brush and Artz, 1999; Aragón-Correa and Sharma, 2003). Therefore, our paper complements the resourcebased view, clearing the validity of this view for SMEs and showing the significance of a contingent focus.

57

Our results will point out the importance of paying special attention to the influences of perceived uncertainty in order to understand the relationships between export intensity and PES. We will thus try to show how PES may positively influence the export intensity of SMEs, as well as how the general business environment assumes a moderating role in the analysed relationship. This work contributes to the literature in three ways. First, our analysis makes it easier to understand the attractiveness of proactive environmental management practices for firms with an international orientation. Second, it reinforces the resourcebased view, showing the potency of developments based on environmental strategies, but also adding a contingent point of view to this approach. Third, it elucidates the influence of the general business environment on the analysed relationship, suggesting that perceived uncertainty may exercise a different influence on SMEs than it does on large ones. After this introduction we review the literature using the resource-based view to analyse a firm's environmental approaches and establish our hypotheses. The final sections explain our methodology, present the results obtained, and include discussions highlighting the main implications of our study. Our analysis uses data from personal interviews with managers from a sample of 145 exporting firms that operate within the food sector in Spain.

2. Theoretical background: A resource-based view of corporate environmental strategies and the influence of firm size In light of the differences among the various corporate stances toward the natural environment (Hart, 1995; Winn and Angell, 2000; Buysse and Verbeke, 2003), firms' environmental strategies are placed along a continuum ranging from merely aiming to meet legal requirements, to full environmental proactivity. Firms which follow a PES voluntarily try to avoid environmental impacts by dealing with their sources, and they are accepted as the most advanced environmental strategies for firms (AragónCorrea, 1998; Sharma and Vredenburg, 1998; Buysse and Verbeke, 2003). We adopt Sharma and Vredenburg's (1998) delimitation of PES as systematic patterns of voluntary practices that go beyond regulatory requirements by dealing with waste reduction and pollution prevention at the source. Several authors (e.g. Hart, 1995) have identified PES as a firm capability because it is an organisational ability to be able to coordinate heterogeneous resources in order to reduce environmental impacts, simultaneously maintaining or increasing firm competitiveness. The resource-based view states that internal resources or capabilities can generate competitive advantages when those resources or capabilities are rare, valuable, difficult to imitate, and difficult to replace (Barney, 1991). Hart (1995) used the resource-based view to identify the internal resources that contribute to the development of PES in the firm, and the potential influence of these approaches on the development of new capabilities that favour an improvement in the organisation's financial performance. The relationship between a greater respect toward the natural environment and financial performance has been the object of intensive study. Most works have demonstrated that

58

E CO L O G I CA L E CO N O MI CS 68 ( 20 0 8 ) 5 6–6 7

PES make it possible to generate valuable organisational capabilities that lead to improved financial performance (e.g. Russo and Fouts, 1997; Judge and Douglas, 1998; Sharma and Vredenburg, 1998; Christmann, 2000; Gupta and Goldar, 2005). Regarding the influence of size on the generation of PES, previous works have used large firms as samples, showing that the largest companies are the ones implementing PES (e.g. Aragón-Correa, 1998; Russo and Fouts, 1997; Sharma, 2000). Scholars have argued that the generation of PES requires accumulation of, and interaction among, resources such as physical assets, technologies, and people (Shrivastava, 1995; Russo and Fouts, 1997; Ramus and Steger, 2000; Sharma, 2000; Machuca et al., 2004). For this reason and because of the results from samples of large firms, the literature has suggested that SMEs' fewer resources might prevent them from making environmental advances (Greening and Gray, 1994; Russo and Fouts, 1997; Sharma and Vredenburg, 1998). There has been, however, a lack of research on SMEs' environmental strategies. Some studies on SMEs have highlighted their poor environmental commitment, describing them as usually only interested in complying with regulations (Rutherfoord et al., 2000; Schaper, 2002). In particular, it has been argued that SMEs have more difficulties following a proactive environmental attitude (Bianchi and Noci, 1998; McKeiver and Gadenne, 2005) and see environmental issues as a threat instead of as an opportunity (Sharma and Vredenburg, 1998). Along this line, it has been assumed that SMEs are not environmentally proactive because they have neither the financial resources nor the knowledge to invest in or contract an external consultant (Hillary 2000), or they merely consider legislation to be a warning (Hutchinson and Chaston 1994; Hillary 1995; Petts et al., 1999; Gerstenfeld and Roberts 2000). On the other hand, some authors have described cases of SMEs around the world successfully implementing PES (Bianchi and Noci, 1998; Carlson-Skalak, 2000; Hillary, 2000). Analysing these cases, we find some SMEs exhibiting features that match the most advanced practices of large firms, implementing programmes to reduce the environmental impact of activities or processes that simultaneously cut costs. Hence, SMEs may indeed also develop varying levels of environmental proactivity. The next section of our paper discusses how specific capabilities emerging from PES may help the international performance of SMEs. We also propose that these opportunities are moderated by the general business environment.

3. Hypotheses: The relationship between PES and the export intensity of SMEs The export process has specific antecedents and components that deserve an individualised analysis (Salomon and Shaver, 2005). We will focus on analysing the influence of PES on the export intensity–the value of exports as a proportion of total sales–of SMEs. Despite the growing importance of SMEs in internationalisation as well as environmental degradation, the existing literature on the progress of internationalisation resulting from the application of PES has paid little attention to the specific characteristics of SMEs. As discussed before, literature about international and environmental issues has almost exclusively used multinationals, focusing on aspects such as the appropriate level of exigency in environmental regu-

lation (e.g. Dobilas and Macpherson, 1997; Graham and Woods, 2006), the influence exerted on environmental strategy by different types of environmental legislation (e.g. Rugman and Verbeke, 1998), or by market demand (e.g. Christmann, 2004). In general terms, the business literature has shown a positive relationship between PES and the internationalisation of large firms, explaining that environmentally proactive firms acquire a broad knowledge base about different regulations and approaches upon which they can develop their own strategies for a variety of requirements (Bansal and Roth, 2000; Bansal, 2005). In addition, achieving an internationally acknowledged environmental certification, such as the ISO 14001, can positively impact the purchasing decisions of importing firms (Bellesi et al., 2005) and affect the organisation's abilities to do business internationally (Raines, 2002), increasing the firm's competitiveness (Galdeano-Gomez and Cespedes-Lorente, 2004; Galdeano-Gomez et al., 2006).

3.1.

Logic for a positive relationship

Although the existing literature is mostly related to large firms, in our opinion PES also generate a set of capabilities that facilitate the export processes for small firms. Because SMEs are usually less resource intensive, they have to use more intangible assets to compete with large firms in global markets. There are several intangible assets which may be generated through environmental proactivity (Sharma and Vredenburg, 1998) that are especially powerful in helping the exporting processes of SMEs: the capacity to innovate, the capacity to understand different stakeholders' interests, knowledge intensity, flexibility, and reputation. First, PES favour the capacity to innovate and assume risks (Hart, 1995; Sharma and Vredenburg, 1998). These factors are essential conditions to compete successfully in international markets, as opposed to the safer option of operating exclusively in the local market (Beise and Rennings, 2005). An innovative approach is particularly useful for SMEs in order to compete in international markets with firms more intensive in resources (Ibeh, 2003; Yang et al., 2004). Second, PES help management to better understand the interests of stakeholders (Gregory and Wellman, 2001; Céspedes-Lorente et al., 2003), which is particularly useful for SMEs when the stakeholders (and their interests) in the domestic market may be different than those in the international market. SMEs can thus avoid problems related to lower levels of resources and break into foreign markets with relative ease when involved in socio-economic linkages (Gumede, 2004). Third, PES can made SMEs more flexible. According to some research (e.g. Burpitt and Rondinelli, 1998; Kuivalainen etal., 2004; Haahti et al., 2005), knowledge and learning play an important role in export performance for SMEs. The implementation of PES requires and develops flexibility in the firm (Noori and Chen, 2003). The adoption of a proactive attitude toward the natural environment made the firm aware of environmental laws, and then anticipate them (King and Lenox, 2000). An environmentally proactive firm has to attend to the demand of its consumers and be able to incorporate the changes into its operations, providing more flexibility (Gupta, 1995). In the same way, a firm adopting PES need to establish fluent communication with others outside the firm (Kitazawa and Sarkis, 2000) and among the members of

EC O LO G I CA L E C O N O M I CS 6 8 ( 2 00 8 ) 5 6–6 7

the organization (Ramus and Steger, 2000). This is especially relevant in the case of SMEs, because flexibility has been recognized as a distinctive competence leading to a competitive advantage for SMEs (Gupta and Cawthon, 1996; Dapverport and Bibby, 1999; Narula, 2004). Empirically, Aragón-Correa et al. (2008) have recently demonstrated that SMEs' potential to adopt proactive environmental practices is associated with the specific organizational capabilities of shared vision, stakeholder management, and strategic proactivity. The adoption of a PES can activate and exploit SMEs' unique strategic characteristics of shorter lines of communication and closer interaction, the presence of a founder's vision, flexibility in managing external relationships, and an entrepreneurial orientation. For all the above reasons, PES can make SMEs more flexible. Finally, attaining a good reputation is important for SMEs trying to access international markets. Gaining access to developed countries is often difficult for SMEs because these markets are particularly attractive for large multinationals and domestic firms. However, a behaviour pattern and image that displays respect for the environment can facilitate such access (Christmann and Taylor, 2001). If SMEs have a green reputation amongst their suppliers and consumers, it becomes easier for them to boost their international operations (Fujita, 1995; Witkowski and Thibodeau, 1999.) In light of the above, we establish the following hypothesis: Hypothesis 1. The proactive environmental strategies of small firms are positively related to their export intensity.

3.2.

Logic for a contingent relationship

The effects of uncertainty on investment decisions have long been discussed in business literature (Campa, 1994). Miller (1993) proposed that the analysis of perceived uncertainty is the most appropriate way to integrate multiple risk variables relevant for international business. The perceived uncertainty of the general environment is often defined in the literature as the perceived risk of the firm (Carrillo and Gaimon, 2004; Agle et al., 2006), which can be explained as the extent to which managers perceive dynamism (variability of elements and difficulty in being predicted), complexity (heterogeneity and diversity of the elements present in the general environment), and hostility (lack of availability of resources in the general environment) (Miller and Friesen, 1983; Tan and Litschert, 1994). Different works have shown the direct influence of perceived uncertainty on decisions related to international expansion (Luo, 2004; Akhter and Robles, 2006). However, our interest here is not to study the influence of perceived uncertainty on the exports, but the indirect influence of perceived uncertainty in deploying the process of transforming organisational capabilities in pursuing internationalisation. Specifically, we want to analyse the potential influence of perceived uncertainty as a moderator of the relationship between the PES and higher export intensity. Studies of exogenous influences on the competitive value of capabilities have already suggested that the effectiveness of capabilities varies with market dynamism (Eisenhardt and Martin, 2000), uncertainty and risk in a business environment (Miller and Shamsie, 1999), changed regulatory environments (Maijoor and Van Witteloostuijn, 1996), and the managerially perceived uncertainty, complexity and hostility in a general

59

business environment (Russo and Fouts, 1997; Aragón-Correa and Sharma, 2003). General literature has shown that firms facing unpredictability anticipate and respond to external pressures, rather than reacting to them, by adopting a more proactive approach (Paine and Anderson, 1977; Dess and Beard, 1984; Milliken, 1987). Specifically, they speed up their search for new products and processes that will help them cope with unanticipated futures (Buchko, 1994; Özsomer et al., 1997), tend to diversify their processes, products, and markets to reduce risk (Milliken, 1987), and selectively decentralise or adopt organic structures to facilitate the search for innovative ways to manage unanticipated futures (Russo and Fouts, 1997; Majumdar and Marcus, 2001) and technologies (Shrivastava, 1995). The implications of perceived uncertainty on PES' effects on organizational performance have been partially analysed. Aragón-Correa and Sharma (2003) proposed that perceived uncertainty positively influences the deployment of organisational capabilities connected to PES in order to improve organisational performance. They proposed that, in an uncertain business environment, managers are more motivated to develop and deploy their existing capabilities for generating PES. Using a sample of firms from many different industries, Russo and Fouts (1997) showed that the firms that improved their environmental performance during a two-year period also significantly improved their business performance. This relationship was stronger in sectors that grew faster. Finally, Majumdar and Marcus (2001) showed that laws regarding the natural environment made firms adopt more innovative environmental strategies when these laws presented unpredictable and flexible scenarios. In the international arena, the potential influence of the general business environment on the relationship between PES and internationalisation has received even less attention. Christmann and Taylor (2001: 452) suggested “that globalisation increases institutional and customer pressures on firms to surpass local requirements, even when they may be tempted by lax regulations and enforcement in countries offering themselves as pollution havens,” showing that firms' international linkages contribute to environmental self-regulation. However, as far as we know, no literature has analysed whether the positive relationship between PES and international success is influenced by perceived uncertainty. We propose that those advantages generated by natural environmental proactivity, such as a better reputation, innovation, or the ability to establish relationships with stakeholders, are particularly useful in the export process when uncertainty increases. Therefore, while in stable business environments, previous experience or price may be the main variables determining a favourable evolution of exporting, other more dynamic considerations may play a primary role in uncertain environments. Therefore, in an uncertain environment, environmentally proactive firms may be better able to anticipate diverse problems, and may have a better chance of responding effectively to issues that would have been less relevant in a stable business environment. When the uncertainty is higher, at least four characteristics of PES may be particularly useful in furthering the process of internationalisation: a) The previous development of greater investments in technologies establishes a privileged situation when facing innovations and changes overseas (Shrivastava, 1995).

60

E CO L O G I CA L E CO N O MI CS 68 ( 20 0 8 ) 5 6–6 7

b) The greater experience of cooperating with external stakeholders offers recognition, legitimacy, and the means of collaborating with qualified agents who have direct influence on the unclear evolution of the environment (Harrison and St John, 1996; Goll and Rasheed, 2002). c) The anticipation of future legislation is useful in avoiding unexpected disadvantages of regulatory change across different markets (Aragón-Correa, 1998; Dowell et al., 2000). d) PES generate organisational learning capabilities (Sharma and Vredenburg, 1998) that are useful to the internationalisation processes (Delios and Henisz, 2003), particularly when it is demanded by the uncertainty in the environment. In summary, the literature has mainly shown that uncertainty increases proactive reactions for the analysed samples, made up mostly of large firms and multinationals. Although the literature has not studied the possible moderating role exerted by the business environment on the relationship between PES and export performance, previous evidence suggests that the interactive effect of the general environment on that relationship possibly exists. We therefore propose the following hypothesis: Hypothesis 2. Perceived uncertainty in the general business environment moderates the relationship between PES and the export intensity of SMEs, increasing the likelihood of a firm deploying its PES to obtain higher export intensity.

4.

Methodology

4.1.

Sample

We selected the food industry for our analysis because of its important contribution to GDP all over the world: it is the largest manufacturing sector in both the EU and the US, accounting for 13.6% and 12.6% respectively of total EU-15 and US manufacturing.5 Moreover, it can have a strong impact on the natural environment. For instance, the factory processes in the food industry generate significant environmental impacts such as noise, smell, high levels of water and energy consumption, and dangerous effluents. Transport is also intensive, with the use of fuels for trucks, delivery vans, and customers' cars. Finally, disposal after consumption generates a wide and growing amount of waste and contaminants such as plastics, papers, aluminium, and organics (see GerbensLeenes et al., 2003; Sánchez-Chóliz et al., in press). To meet the objectives of this study, we chose a single geographically delineated productive sector. By focusing on food firms operating in Spain, we remove the possible disturbing influence exerted by specific peculiarities of different sectors or the biases that various regulations or national aid and subsidy policies could introduce. Our sample is thus formed of export firms located in Spain and belonging to the food sector, drawn from the Dun and Bradstreet (D&B) database at the end of 2004. This database yielded 1556 export firms, mostly SMEs, and our sample of 145 organisations (9.3% of the target population) was obtained using the random sampling method. We consider a firm to be smalland medium-sized when its number of employees is 250 or

5

See Bureau of Economic Analysis (2005) and Partos (2005).

fewer. Two firms were removed from the original sample because they were outside the SME limits and then substituted by other SMEs. The sampled firms had an average size of 54.66 employees. The sampled firms mostly export to the EU (68.56%), but also to Latin America (11.66%), the US and Canada (6.92%), Eastern Europe (4.32%), Africa (4.55%), and Asia, Australia and New Zealand (3.98%). We did not find significant differences between the descriptive characteristics of the firms finally included in the study (e.g. location, activities and size) and the original population.

4.2.

Questionnaire

Multiple instruments were used to obtain the data for our research. First, we obtained objective data regarding firm size and export intensity through the D&B database. Second, because data on SMEs' environmental strategies or environmental performance are not available from published sources, we used a questionnaire to evaluate the PES. We also measured perceived uncertainty through a questionnaire. Finally, we included questions about size and export intensity in the questionnaire to check the consistency of the answers with external information. The CEO of each of the 145 firms responded to the questionnaire during a personal interview carried out by the survey company TNS in December 2004 and January 2005. As is usual in strategic and environmental research (Christmann 2000; Cordano and Frieze 2000; Flannery and May 2000; Sharma 2000), data were collected from the general managers or CEOs because they are the people most knowledgeable about their organisations. Additionally, in the case of small organisations, the views of the general manager may better capture a firm's approach than the views of several respondents (Chandler and Hanks 1993; Lyon et al., 2000). The high and significant6 correlation (.709) between external information from the D&B database and the self-evaluation suggests confidence and accuracy for the whole questionnaire.

4.3.

Variable measurement

The questionnaire was constructed using already validated scales obtained from a review of the literature, adapting them slightly to the geographical context used, and to the activity of the sector.

4.3.1.

Proactive environmental strategy

We adopted the items used by Aragón-Correa (1998) to measure PES. We complemented this scale by adding more items related to the manufacturers' ecological processes. Such items include energy power savings, prevention systems for environmental calamities, the ecological measure of products based on their use of ecological ingredients, the ease of returning and recycling bottles and containers, and eco-design, which fuses three interconnected strategies to gain an environmental competitive advantage: product stewardship, sustainable development, and pollution prevention (Hart, 1995). Items that reflect these dimensions are good indicators of the firm's degree of environmental proactivity (Buysse and Verbeke, 2003). We eventually constructed an 18-item scale to evaluate firm environmental proactivity (see Appendix). Using a seven-point Likert scale, interviewees were asked to assess their firm's degree of 6

Significant at 0.999 level.

61

EC O LO G I CA L E C O N O M I CS 6 8 ( 2 00 8 ) 5 6–6 7

Table 1 – Means, standard deviations and pearson coefficients

1. 2. 3. 4. 5.

Age (Ln)Size Perceived uncertainty Environmental proactivity Environmental proactivity x perceived uncertainty 6. Export intensity

N

Mean

S.D.

1

2

3

145 143 125 145 144

35.75 3.20 3.59 3.89 35.29

27.51 1.24 1.34 1.28 29.85

.267⁎⁎⁎ −.060 −.085 .035

−.001 .258⁎⁎ .004

.089 .039

125

.15

1.76

−.065

−.018

.176⁎

4

5

−.083 .204⁎⁎

−.149†

†p b .10; ⁎p b .05; ⁎⁎p b .01; ⁎⁎⁎p b .001.

development in relation to the environmental activities mentioned, as well as to compare their activities with those of their competitors. The final value of the PES of a firm was calculated using the mean of these 18 items (Cronbach's alpha=.915). A confirmatory analysis using LISREL 8.50 showed a single factor model fitting the data well (χ2 = 164.74, df = 131, p = .024; RMSEA =.044, NNFI =.98, CFI =.99). Consequently, these items were treated as indicators of the degree of PES developed by the firm.

4.3.2.

Export intensity

Katsikeas et al. (2000) reviewed the literature dedicated to the different ways of measuring export performance, and found that the most commonly used ways refer to an export sales ratio. We chose this ratio because we were interested in checking the real importance of export activity to the firm, rather than the managers' satisfaction with the exports. Specifically, we used export intensity, defined as the value of exports as a proportion of total sales of the firm (Verwaal and Donkers, 2002). Information for this ratio was drawn from the D&B database.

4.3.3.

Perceived uncertainty

Our questionnaire asked executives to offer their perception of the uncertainty in the firm's general environment (Miller and Lee, 2001; Tan and Tan, 2005). It included four items (Cronbach's alpha = .76) adapted from the scale used by Tan and Litschert (1994) in which the interviewee was asked to express his or her degree of agreement or disagreement with respect to the different statements proposed, using a sevenpoint Likert scale (see Appendix). A confirmatory analysis (LISREL 8.50) showed one single latent uncertainty construct (χ2 = .85, df = 1, p N .36; RMSEA = .00, NNFI = 1.00, CFI = 1.00).

4.3.4.

Control variables

The literature has widely discussed the potential influence of a firm's size on its export intensity.7 Other studies have also considered size as a control variable in research of export performance, even in an SME framework (e.g. Holzmuller and Kasper, 1991; Katsikeas, Deng, and Wortzel, 1997; Javalgi, White and Lee, 2000). We decided to use the number of fulltime employees as a proxy variable for firm size because it better represents the proportion of the firm's direct activity rather than intermediation activity. This data was drawn from the latest version of the D&B database and transformed

7

See Verwaal and Donkers (2002) for detailed discussion.

through the calculation of its natural logarithm in order to fulfil the condition of normality. Other works have also suggested that the firm's age could affect the export process (e.g. Javalgi et al., 2000). To measure the age of a firm, we counted the number of years since its founding.

5.

Results

For our study, we used a moderated hierarchical regression analysis (Cohen and Cohen, 1984), introducing the moderating effects in a multiplicative way. Before creating the multiplicative terms, we centered both the independent variables and the moderating ones, thus avoiding the multicolinearity problem (Venkatraman, 1989). This aspect was corroborated through the calculation of the tolerance indices and variance inflation factors for each regression model that reached acceptable values. Table 1 shows the means, standard deviations, and correlation between the variables analysed. Table 2 offers the results of the regression analysis. Model 1 shows how the regression analysis for export intensity was carried out by introducing the control variables. In Model 2, we added the direct effects of the external environment. In Model 3, we introduced PES as an independent variable, whereas the moderating effect of the perceived complexity appeared in Model 4. The difference between the R2 of Models 4 and 3 is statistically significant (ΔR2) and reflects the strength of the moderating effect. The PES show significant positive effect on export intensity. This result supports Hypothesis 1. The direct influence of perceived uncertainty was also significant for the sampled firms, but the analysis of this relationship was beyond the scope of our paper. The moderating effect, is significant on the relationship between PES and export intensity. Seeing the nature and the strength of perceived uncertainty's moderating effect, we decided to evaluate the effects of the PES on export intensity for low, medium and high levels of perceived uncertainty, defining low values as those with a standard deviation below the average, and high values as those with a standard deviation above the average (Jaccard et al., 1990). We then calculated the coefficients that measure the impact of the PES on the export intensity for the different levels of environmental complexity perceived (Jaccard et al., 1990). Table 3 shows these results. As can be seen in Table 3, the influence of the PES is much greater for low and medium levels of perceived uncertainty than for high levels of perceived uncertainty; moreover, in the latter case, the effect is not significant. We predicted this

62

E CO L O G I CA L E CO N O MI CS 68 ( 20 0 8 ) 5 6–6 7

Table 2 – Regression analysis Model 1 Intercept Age (Ln)Size Perceived uncertainty Environmental proactivity Environmental proactivity x perceived uncertainty Model R2 ΔR2 Model F

40.102⁎⁎⁎ − .130 − .002

Model 2

(5.427) (− 1.375) (− .026)

26.047⁎⁎ −.127 −.006 .164†

.017 .015 1.045

(2.452) (− 1.353) (− .060) (1.825)

.044 .027† 1.821

Model 3 15.049 −.092 −.074 .144† .213⁎⁎

(1.308) (−.980) (−.768) (1.625) (2.278)

.084 .040⁎⁎ 2.712⁎

Model 4 15.671 − .089 − .071 .149† .200⁎⁎ − .148†

(1.372) (− .961) (− .736) (1.693) (2.151) (− 1.691) .104 .022† 2.776⁎⁎

Export intensity is the dependent variable. Values are standardised regression coefficients (except the intercept which appears as non-standardised) with t-values in parentheses. †p b .10; ⁎p b .05; ⁎⁎p b .01; ⁎⁎⁎p b .001.

moderation in Hypothesis 2, but the sign was the opposite of the prediction. The regression slopes are positive for lower uncertainty values (low and medium levels). This moderating effect can be illustrated in Fig. 1.

6.

Discussion

Our results show a significant and positive relationship between the PES and export intensity supporting our Hypothesis 1. This finding complements previous literature that supports a positive relationship between environmental progress and international trade for larger firms (e.g. Christmann and Taylor, 2001; Bellesi et al., 2005), showing that SMEs' limitations of resources is not an obstacle in attaining co-joint progress in the environmental and international arena. Our results regarding the positive association between PES and export intensity are also coherent with those frequently discussed in the literature on large firms referring to the positive association of environmental proactivity and financial performance (e.g. Russo and Fouts, 1997; Klassen and Whybark, 1999; Dowell et al., 2000). Our findings offer the rationale for reconsidering existing assumptions in the literature that claimed that SMEs cannot obtain relevant advantages from PES. We argue that PES can drive SMEs to absorb and develop intangible assets, such as reputation, learning, knowledge, and stakeholder integration, although more research should be undertaken to understand the full range of reasons explaining this positive relationship. Stakeholders integration is particularly relevant, given the increased consciousness of the public about natural environment and global warming (Schreurs, 2002; Dryzek

Table 3 – Effects of environmental proactivity on the export intensity under different levels of perceived uncertainty Variable

Environmental proactivity

Perceived uncertainty level High

Medium

Low

−3.40 (−.149)

5.35⁎ (2.048)

5.66⁎ (2.436)

Export intensity is the dependent variable. Values are standardised regression coefficients with t-values in parentheses. †p b .10; ⁎p b .05; ⁎⁎p b .01; ⁎⁎⁎p b .001.

et al., 2003). An increased public environmental consciousness now exists in most of the developed countries,8 creating rich internationalisation opportunities for small firms. Customers in importing countries that have a growing ecological mentality may show preference for companies that look after the natural environment. This is in tune with McKeiver and Gadenne (2005), whose results point out that consumers' concerns are associated with some level of implementation of environmental systems in SMEs. Also, following PES may help avoid problems with unfamiliar regulations in the importing country and especially with possible future changes. Flexibility and PES have been found to have a strong relationship (e.g. Gupta, 1995; Kitazawa and Sarkis, 2000; Noori and Chen, 2003); indeed there is evidence that tacit knowledge and learning can be critical to developing environmental management (Boiral, 2006). Finally, acquiring a good corporate reputation facilitates the firm's entry into new markets and helps to circumvent conflicts with local stakeholders. Each of these positive effects can be driven by the unique characteristics of SMEs, which include communication and closer interaction, the presence of a founder's vision, flexibility in managing external relationships, and an entrepreneurial orientation, as Aragón-Correa et al. (2008) point out. The control variables (firm size and age) do not show any significant influence on the export intensity for the sampled firms. This result coincides with previous works showing that a large firm's size is only relevant in offering more opportunities to start an export process (Wakelin, 1998). On the other hand, a firm's age may not be relevant when compared with a minimum degree of experience in the export process (Reid, 1981). Regarding the moderation effects, our results confirm the existence of a moderating effect of perceived uncertainty on the relationship between PES and export intensity. This moderating effect was proposed by our Hypothesis 2 and suggested by previous works on the link between PES and financial performance (Aragón-Correa and Sharma, 2003), while other works have demonstrated this link for specific sectors (e.g. Russo and Fouts, 1997; Marcus and Geffen, 1998). Nevertheless, our results are

8

The majority of the countries to which our sample (and also our target population) firms export are developed countries (76.6% of the total sales abroad are to developed countries).

EC O LO G I CA L E C O N O M I CS 6 8 ( 2 00 8 ) 5 6–6 7

63

Fig. 1 – The moderating role of the perceived uncertainty.

especially relevant because, as far as we know, there is no specific evidence to date of a potential influence on export intensity. In addition, our results support previous studies that emphasize the importance of the general business environment and, particularly, the importance of perceived uncertainty (Tan and Litschert, 1994; Dickson and Weaver, 1997). Even when it was not our aim to study a direct relationship between uncertainty and exports, our results point out that uncertainty's influence on the export intensity of SMEs is positive. This is in line with studies that have found uncertainty as one of the variables explaining export behaviour in SMEs (e.g. Karagozoglu and Lindell, 1998; Préfontaine and Bourgault, 2002). They contrast, however, with other findings that did not observe any relationship between the level of uncertainty and export performance in SMEs (e.g. Westhead, Wright and Ucbasaran, 2004). This relationship, in the context of SMEs, therefore needs additional study. The analysis of the nature and strength of the uncertainty moderation effect shows us that when the perceived uncertainty level is low or medium there is a positive relationship between PES and export intensity, but this relationship is not significant when the level is high. One possible explanation for this result is that SMEs may react to higher levels of uncertainty in a more conservative way than large firms. This argument is one of the principal bases of the “threat-rigidity theory” (Staw et al., 1981; Ocasio, 1995), which suggests that when managers perceive higher levels of uncertainty or risk, they think they have little control over the situation and it is therefore likely to have a negative outcome. In order to overcome the negative situation, managers thus tend to increase the internal control of the organisation to lower the level of risk or uncertainty. Complementary explanations may be related, with the possibility that different variables are more relevant to the export intensity than PES when the perceived uncertainty is high. Hence, in a context of high uncertainty, some of these variables might be biasing the export intensity of small firms,

balancing the potential positive effect of environmental capabilities. According to the resource-based view, under a turbulent general environment or a higher level of uncertainty, the most effective capabilities are those simple routines that keep managers focused on broadly important issues (Eisenhardt and Martin, 2000). Multiple variables have been suggested that influence export performance of firms. We suggest that those more related to physical spaces and resources, such as foreign market adaptation (Dow, 2006), distributor relationships (Zhang et al., 2003), or the existence of physical, experiential and financial resources in the firm (Piercy et al., 1998) may affect export performance with the potential of tempering the positive influence of capabilities emerging from PES. Our results have relevant implications for practitioners and governments. From a managerial viewpoint, this research demonstrates the importance of PES on a company's export development. Appropriate guidance, training, and support might be necessary to effectively use PES in the export processes of small firms. From a government perspective, the results imply that government assistance to SMEs should reduce the level of perceived uncertainty in order to ensure that PES is more useful to the exporting process. Different programmes may reduce the perceived uncertainty, but we would like to mention here training programmes for managers. These programmes may aid in the understanding of technological change and provide a clearer view of potential evolution. In any case, we caution against generalising our results, given the business and geographical limits of our sample. We must also highlight that our cross-sectional analysis cannot guarantee a specific direction of causality for the analysed relationship between PES and export intensity; future longitudinal analyses should empirically reinforce the theoretical logic of our hypotheses. For this same reason, there is the possibility of reversed causal relationships between the studied variables, although Hitchens et al. (2005) found that SMEs with average economic

64

E CO L O G I CA L E CO N O MI CS 68 ( 20 0 8 ) 5 6–6 7

Appendix Questionnaire

performance were just as likely to adopt environmental initiatives as their high-performing competitors. More research attention should be paid to the environmental approaches of SMEs. Future work confirming that SMEs are in fact at a resource disadvantage but not at a capability disadvantage when it comes to environmental advances would imply important consequences for policymakers and practitioners.

Acknowledgement We would like to thank all those managers of our sample who contributed their time and ideas to this study. This research has partially funded by the Fundación BBVA, Research Group SEJ014 and Project SEJ2007-67833 (European Commission).

EC O LO G I CA L E C O N O M I CS 6 8 ( 2 00 8 ) 5 6–6 7

REFERENCES Agle, B.R., Nagarajan, N.J., Sonnenfeld, J.A., Srinivasan, D., 2006. Does CEO charisma matter? An empirical analysis of the relationships among organizational performance,environmental uncertainty, and top management team perceptions of CEO charisma. Academy of Management Journal 49, 161–174. Akhter, S.H., Robles, F., 2006. Leveraging internal competency and managing environmental uncertainty–propensity to collaborate in international markets. International Marketing Review 23, 98–115. Aragón-Correa, J.A., 1998. Strategic proactivity and firm approach to the natural environment. Academy of Management Journal 4, 556–567. Aragón-Correa, J.A., Sharma, S., 2003. A contingent resource-based view of proactive corporate environmental strategy. Academy of Management Review 2, 71–88. Aragón-Correa, J.A., Hurtado-Torres, N., Sharma, S., García-Morales, V.J., 2008. Environmental strategy and performance in small firms: a resource-based perspective. Journal of Environmental Management 86, 88–103. Bansal, P., 2005. Evolving sustainably: a longitudinal study of corporate sustainable development. Strategic Management Journal 2, 197–218. Bansal, P., Roth, K., 2000. Why companies go green: a model of ecological responsiveness. Academy of Management Journal 4, 717–736. Barney, J.B., 1991. Firm resources and sustained competitive advantage. Journal of Management 1, 99–120. Barney, J.B., 2001. Resource-based theories of competitive advantage: a ten-year retrospective on the resource-based view. Journal of Management 27, 643–650. Beise, M., Rennings, K., 2005. Lead markets and regulation: a framework for analyzing the international diffusion of environmental innovations. Ecological Economics 52, 5–17. Bellesi, F., Lehrer, D., Tal, A., 2005. Comparative advantage: the impact of ISO 14001 environmental certification on exports. Environmental Science & Technology 3, 1943–1953. Bianchi, R., Noci, G., 1998. “Greening” SMEs' competitiveness. Small Business Economics 11, 269–281. Boiral, O., 2006. Global warming: should companies adopt a proactive strategy? Long Range Planning 39, 315–330. Brush, T.H., Artz, K.W., 1999. Toward a contingent resource based theory: the impact of information asymmetry on the value of capabilities in veterinary medicine. Strategic Management Journal 2, 223–250. Buchko, A.A., 1994. Conceptualization and measurement of environmental uncertainty: an assessment of the miles and snow perceived environmental uncertainty scale. Academy of Management Journal 3, 410–425. Bureau of Economic Analysis, 2005. U.S. International Services: Cross-Border Trade 1986–2005, and Sales Through Affiliates, 1986–2004. U.S. Department of Commerce, Washington, DC. Burpitt, W.J., Rondinelli, D.A., 1998. Export decision-making in small firms: the role of organizational learning. Journal of World Business 33, 51–69. Buysse, K., Verbeke, A., 2003. Proactive environmental strategies: a stakeholder management perspective. Strategic Management Journal 2, 453–470. Campa, J.M., 1994. Multinational investment under uncertainty in the chemical-processing industries. Journal of International Business Studies 2, 557–578. Carlson-Skalak, S., 2000. E Medias global zero: design for environment in a small firm. Interfaces 3, 66–83. Carrillo, J.E., Gaimon, C., 2004. Managing knowledge-based resource capabilities under uncertainty. Management Science 50, 1504–1518. Céspedes-Lorente, J., Burgos-Jiménez, J., Álvarez-Gil, M.J., 2003. Stakeholders' environmental influence: an empirical analysis

65

in the Spanish hotel industry. Scandinavian Journal of Management 19, 333–358. Chandler, G.N., Hanks, S.H., 1993. Measuring the performance of emerging businesses — a validation-study. Journal of Business Venturing 8, 391–408. Christmann, P., 2000. Effects of “best practices” of environmental management on cost advantage: the role of complementary assets. Academy of Management Journal 4, 663–680. Christmann, P., 2004. Multinational companies and the natural environment: determinants of global environmental policy standardization. Academy of Management Journal 4, 747–760. Christmann, P., Taylor, G., 2001. Globalization and the environment: determinants of firm self-regulation. Journal of International Business Studies 3, 439–458. Cohen, J., Cohen, P., 1984. Applied Multiple Regression: Correlation Analysis for the Behavioral Sciences, 2nd ed. Lawrence Erlbaum Associates, Hillsdale, NJ. 728 pp. Cordano, M., Frieze, I.H., 2000. Pollution reduction preferences of us environmental managers: applying Ajzens theory of planned behavior. Academy of Management Journal 4, 627–643. Dapverport, S., Bibby, B., 1999. Rethinking a national innovation system: the small country as ‘SME’. Technology Analysis & Strategic Management 11, 431–462. Delios, A., Henisz, W.J., 2003. Political hazards, experience, and sequential entry strategies: the international expansion of Japanese firms, 1980–1998. Strategic Management Journal 2, 1153–1164. Dess, G., Beard, D., 1984. Dimensions of organizational task environments. Administrative Science Quarterly 2, 52–73. Dickson, P.H., Weaver, K.M., 1997. Environmental determinants and individual-level moderators of alliance use. Academy of Management Journal 4, 404–425. Dobilas, G., Macpherson, A., 1997. Environmental regulation and international sourcing policies of multinational firms. Growth and Change 28 (1), 7–23. Dow, D., 2006. Adaptation and performance in foreign markets: evidence of systematic under-adaptation. Journal of International Business Studies 3, 212–226. Dowell, G., Hart, S., Yeung, B., 2000. Do corporate global environmental standards create or destroy market value? Management Science 4, 1059–1074. Dryzek, J., Downes, D., Hunold, C., Schlosberg, D., Hernes, H.K., 2003. Green States and Social Movements: Environmentalism in the United States, United Kingdom, Germany and Norway. Oxford University Press, Oxford. 240 pp. Eisenhardt, K.M., Martin, J.A., 2000. Dynamic capabilities: what are they? Strategic Management Journal 2, 1105–1121. EU, Commission of the European Communities, 2003. Commission Recommendation of 06/05/2003 concerning the definition of micro, small and medium-sized enterprises. Brussels. 06/05/ 2003 C 1422 final. 12pp. Flannery, B.L., May, D.R., 2000. Environmental ethical decision making in the US metal-finishing industry. Academy of Management Journal 4, 642–662. Fujita, M., 1995. Small and medium-sized transnational corporations — salient features. Small Business Economics 7 (4), 251–271. Galdeano-Gomez, E., Cespedes-Lorente, J., 2004. The effect of quality-environmental investment on horticultural firms' competitiveness. Canadian Journal of Agricultural Economics 52, 371–386. Galdeano-Gomez, E., Cespedes-Lorente, J., Rodriguez-Rodriguez, M., 2006. Productivity and environmental performance in marketing cooperatives: an analysis of the Spanish horticultural sector. Journal of Agricultural Economics 57, 479–500. Gerbens-Leenes, P.W., Moll, H.C., Schoot Uiterkamp, A.J.M., 2003. Design and development of a measuring method for environmental sustainability in food production systems. Ecological Economics 46, 231–248.

66

E CO L O G I CA L E CO N O MI CS 68 ( 20 0 8 ) 5 6–6 7

Gerstenfeld, A., Roberts, H., 2000. Size matters: barriers and prospects for environmental management in small and medium sized enterprises. In: Hillary, R. (Ed.), Small and Medium Sized Enterprises and the Environment: Business Imperatives. Greenleaf Publishing, Sheffield. 416 pp. Goll, I., Rasheed, A.A., 2002. The effect of environment on the relationship between social responsibility and performance. Academy of Management Proceedings. Graham, D., Woods, N., 2006. Making corporate self-regulation effective in developing countries. World Development 34 (5), 868–883. Greening, D.W., Gray, B., 1994. Testing a model of organizational response to social and political issues. Academy of Management Journal 3, 467–498. Gregory, R., Wellman, K., 2001. Bringing stakeholder values into environmental policy choices: a community-based estuary case study. Ecological Economics 39, 37–52. Gumede, V., 2004. Export propensities and intensities of small and medium manufacturing enterprises in South Africa. Small Business Economics 2, 379–389. Gupta, M.C., 1995. Environmental management and its impact on the operations function. International Journal of Operations & Production Management 15 (8), 34–51. Gupta, M., Cawthon, G., 1996. Managerial implications of flexible manufacturing for small/medium-sized enterprises Technovation 16 (2), 77–83. Gupta, S., Goldar, B., 2005. Do stock markets penalize environment-unfriendly behaviour? Evidence from India. Ecological Economics 52, 81–95. Haahti, A., Madupu, V., Yavas, U., Babakus, E., 2005. Cooperative strategy, knowledge intensity and export performance of small and medium sized enterprises. Journal of World Business 40 (2), 124–138. Harrison, J., St John, C., 1996. Managing and partnering with external stakeholders. Academy of Management Executive 1, 46–60. Hart, S.L., 1995. A natural-resource-based view of the firm. Academy of Management Review 2, 986–1014. Hillary, R., 1995. Small firms and the environment: a groundwork status report. Groundwork, Birmingham. 78 pp. Hillary, R., 2000. Small and Medium-Sized Enterprises and the Environment. Greenleaf, Sheffield. 240 pp. Hitchens, D., Thankappan, S., Trainor, M., Clausen, J., De Marchi, B., 2005. Environmental performance, competitiveness and management of small businesses in Europe. Tijdschrift voor Economische en Sociale Geografie 96 (5), 541–557. Holzmuller, H., Kasper, H., 1991. On a theory of export performance: personal and organizational determinants of export trade activities observed in small and medium-sized firms Management International Review 31, 45–70 (special issue 2). Hutchinson, A., Chaston, I., 1994. Environmental management in Devon and Cornwall's small and medium sized enterprise sector. Business Strategy and the Environment 2, 19–24. Ibeh, K.I., 2003. Toward a contingency framework of export entrepreneurship: conceptualisations and empirical evidence. Small Business Economics 2, 49–68. Jaccard, J., Turrisi, R., Wan, C.K., 1990. Interaction Effects in Multiple Regression. Sage, Newbury Park, CA. Javalgi, R.G., White, D.S., Lee, O., 2000. Firm characteristics influencing export propensity: an empirical investigation by industry type. Journal of Business Research 4, 217–228. Judge Jr., W.Q., Douglas, T.J., 1998. Performance implications of incorporating natural environmental issues into the strategic planning process: an empirical assessment. Journal of Management Studies 3, 241–262. Karagozoglu, N., Lindell, M., 1998. Internationalization of small and medium-sized technology-based firms: an exploratory study. Journal of Small Business Management 36, 44–59. Karmel, S.M., Byron, J., 2002. A Comparison of Small and Medium Sized Enterprises in Europe and in the USA. London, Routledge.

Katsikeas, C.S., Deng, S.L., Wortzel, L.H., 1997. Perceived export success factors of small and medium-sized Canadian firms. Journal of International Marketing 5 (4), 53–72. Katsikeas, C.S., Leo nidou, L.C., Morgan, N.A., 2000. Firm-level export performance assessment: review, evaluation, and development. Journal of the Academy of Marketing Science 2, 493–511. King, A.A., Lenox, M.J., 2000. Industry self-regulation without sanctions: the chemical industry's Responsible Care Program. Academy of Management Journal 43, 698–716. Kitazawa, S., Sarkis, J., 2000. The relationship between ISO 14001 and continuous source reduction programs. International Journal of Operations and Production Management 20, 225–248. Klassen, R.D., Whybark, D.C., 1999. The impact of environmental technologies on manufacturing performance. Academy of Management Journal 4, 599–615. Kuivalainen, O., Sundqvist, S., Puumalainen, K., Cadogan, J.W., 2004. The effect of environmental turbulence and leader characteristics on international performance: are knowledge-based firms different? Canadian Journal of Administrative Sciences 21, 35–50. Lawrence, P.R., Lorsch, J., 1967. Organization and Environment. Harvard Business School Press, Boston, MA. 296 pp. Leo nidou, L.C., Katsikeas, C.S., 1996. The export development process: an integrative review of empirical models. Journal of International Business Studies 2, 517–551. Lu, J.W., Beamish, P.W., 2001. The internationalization and performance of SMEs. Strategic Management Journal 22 (6/7), 565–586. Luo, Y.D., 2004. Building a strong foothold in an emerging market: a link between resource commitment and environment conditions. Journal of Management Studies 4, 748–773. Lyon, D.W., Lumpkin, G.T., Dess, G.D., 2000. Enhancing entrepreneurial orientation research: operationalizing and measuring a key strategic decision making process. Journal of Management 2, 1055–1085. Machuca, J.A.D., Diaz, M.S., Gil, M.J.A., 2004. Adopting and implementing advanced manufacturing technology: new data on key factors from the aeronautical industry. International Journal of Production Research 42, 3183–3202. Maijoor, S., Van Witteloostuijn, A., 1996. An empirical test of the resource-based theory: strategic regulation in the Dutch audit industry. Strategic Management Journal 1, 549–569. Majumdar, S.K., Marcus, A.A., 2001. Rules versus discretion: the productivity consequences of flexible regulation. Academy o Management Journal 4, 170–179. Marcus, A., Geffen, D., 1998. The dialectics of competency acquisition: pollution prevention in electric generation. Strategic Management Journal 1, 1145–1168. Marshall, L., 1998. Economic Instruments and the Business Use of Energy. HM Treasury, London. McKeiver, C., Gadenne, D., 2005. Environmental management systems in small and medium businesses. International Small Business Journal 23, 513–537. Miller, K.D., 1993. Industry and country effects on managers perceptions of environmental uncertainties. Journal of International Business Studies 2, 693–714. Miller, D., Friesen, P.H., 1983. Strategy-making and environment: the third link. Strategic Management Journal 4, 221–225. Miller, D., Shamsie, J., 1999. Strategic responses to three kinds of uncertainty: product line simplicity at the Hollywood film studios. Journal of Management 2, 97–116. Miller, D., Lee, J., 2001. The people make the process: commitment to employees, decision making, and performance. Journal of Management 2, 163–189. Milliken, F.J., 1987. Three types of perceived uncertainty about the environment: state, effect, and response uncertainty. Academy of Management Review 1, 133–143.

EC O LO G I CA L E C O N O M I CS 6 8 ( 2 00 8 ) 5 6–6 7

Narula, R., 2004. R&D collaboration by SMEs: new opportunities and limitations in the face of globalisation. Technovattion 24 (2), 153–161. Nehrt, C., 1998. Maintainability of first mover advantages when environmental regulations differ between countries. Academy of Management Review 2, 77–97. Noori, H., Chen, C.L., 2003. Applying scenario-driven strategy to integrate environmental management and product design. Production and Operations Management 12, 353–368. Ocasio, W., 1995. The enactment of economic diversity: a reconciliation of theories of failure-induced change and threat-rigidity. In: Cummings, L.L., Staw, B.M. (Eds.), Research in organizational behavior. JAI Press, Greenwich, CT, pp. 287–331. Özsomer, A., Calantone, R.J., Di Benedetto, A., 1997. What makes firms more innovative? A look at organizational and environmental factors. Journal of Business & Industrial Marketing 1, 400–416. Paine, F.T., Anderson, C.R., 1977. Contingencies affecting strategy formulation and effectiveness: an empirical study. Journal of Management Studies 1, 147–158. Partos, L., 2005. European food industry 2002: The facts and figures. Product & Supplier News 15/04/2005. Petts, J., Herd, A., Gerrard, S., Horne, C., 1999. The climate and culture of environmental compliance within SMEs. Business Strategy and the Environment 8, 14–30. Piercy, N.F., Kaleka, A., Katsikeas, C.S., 1998. Sources of competitive advantage in high performing exporting companies. Journal of World Business 33, 378–393. Porter, M.E., Van der Linde, C., 1995a. Toward a new conception of the environment–competitiveness relationship. Journal of Economic Perspectives 9, 97–118. Porter, M.E., Van der Linde, C., 1995b. Green and competitive: ending the stalemate. Harvard Business Review 7 (4), 120–134. Préfontaine, L., Bourgault, M., 2002. Strategic analysis and export behavious of SMEs. International Small Business Journal 20, 123–138. Priem, R.L., Butler, J.E., 2001a. Is the resource-based view a useful perspective for strategic management research? Academy of Management Review 2, 22–40. Priem, R.L., Butler, J.E., 2001b. Tautology in the resource-based view and the implications of externally determined resource value: further comments. Academy of Management Review 2, 57–66. Raines, S.S., 2002. Implementing ISO-14001 — an international survey assessing the benefits of the certification. Corporate Environmental Strategy 9, 418–426. Ramus, C.A., Steger, U., 2000. The roles of supervisory support behaviors and environmental policy in employee ecoinitiatives at leading-edge European companies. Academy of Management Journal 4, 605–626. Reid, S., 1981. The decision-maker and export entry and expansion. Journal of International Business Studies 1, 101–112. Rugman, A.M., Verbeke, A., 1998. Corporate strategies and environmental regulations: an organizing framework. Strategic Management Journal 1, 363–375. Russo, M.V., Fouts, P.A., 1997. A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal 4, 534–559. Rutherfoord, R., Blackburn, R.A., Spence, L.J., 2000. Environmental management and the small firm: an international comparison.

67

International Journal of Entrepreneurial Behaviour & Research 6, 310–325. Salomon, R., Shaver, M., 2005. Export and domestic sales: their interrelationship and determinants. Strategic Management Journal 26, 855–871. Sánchez-Chóliz, J., Duarte, R., Mainar, A., In Press. Environmental impact of household activity in Spain. Ecological Economics. Schaper, M., 2002. Small firms and environmental management: predictors of green purchasing in Western Australian pharmacies. International Small Business Journal 2, 235–251. Schreurs, M., 2002. Environmental Politics in Japan, Germany and the United States. Cambridge University Press, Cambridge. 306 pp. Sharma, S., 2000. Managerial interpretations and organizational context as predictors of corporate choice of environmental strategy. Academy of Management Journal 4, 681–697. Sharma, S., Vredenburg, H., 1998. Proactive corporate environmental strategy and the development of competitively valuable organizational capabilities. Strategic Management Journal 1, 729–753. Shrivastava, P., 1995. Environmental technologies and competitive advantage. Strategic Management Journal 16, 183–200. Smith, M.A., Kemp, R., 1998. Small Firms and the Environment 1998: A Grounded Report. Groundwork, Birmingham. 83 pp. Staw, B., Sandelands, L., Dutton, J., 1981. Threat rigidity effects in organizational behavior: a multilevel analysis. Administrative Science Quarterly 2, 501–524. Tan, J.J., Litschert, R.J., 1994. Environment–strategy relationship and its performance implications: an empirical study of the Chinese electronics industry. Strategic Management Journal 1, 1–20. Tan, J., Tan, D., 2005. Environment–strategy co-evolution and co-alignment: a staged model of Chinese SOEs under transition. Strategic Management Journal 2, 141–157. Venkatraman, N., 1989. The concept of fit in strategy research: toward verbal and statistical correspondence. Academy of Management Review 1, 423–444. Verwaal, E., Donkers, B., 2002. Firm size and export intensity: solving an empirical puzzle. Journal of International Business Studies 3, 603–613. Wakelin, K., 1998. Innovation and export behaviour at the firm level. Research Policy 2, 829–841. Westhead, P., Wright, M., Ucbasaran, D., 2004. Internationalization of private firms: environmental turbulence and organizational strategies and resources. Entreperneurship & Regional Development 16, 501–522. Winn, M.I., Angell, L.C., 2000. Towards a process model of corporate greening. Organization Studies 2, 1119–1147. Witkowski, T.H., Thibodeau, E.J., 1999. Personal bonding processes in international marketing relationships. Journal of Business Research 46, 315–325. World Bank, 2006. World Development Indicators. World Bank Publications, Washington, DC. Yang, C.H., Chen, J.R., Chuang, W.B., 2004. Technology and export decision. Small Business Economics 2, 349–364. Zhang, C., Cavusgil, S.T., Roath, A.S., 2003. Manufacturer governance of foreign distributor relationships: do relational norms enhance competitiveness in the export market? Journal of International Business Studies 3, 550–566.