When in Rome, do as the Romans do: the effect of characteristics of capitalism on environmental performance
International Journal of Productivity and Performance Management
ISSN: 1741-0401
Article publication date: 12 December 2023
Abstract
Purpose
The purpose of this research is to investigate the effect of characteristics of capitalism on environmental performance.
Design/methodology/approach
The authors analyzed a sample of 6,257 companies, based in 55 countries and 8 typologies of capitalism. The independent variables are the characteristics of capitalism, measured through five indicators: cooperation between employees and employers, index of economic freedom, local competition between industries, human development index (HDI) and quality of the governance environment. To measure environmental performance, the authors created an index composed of 20 indicators. Data were analyzed using panel data regression and dynamic panel of the generalized method of moments.
Findings
The results indicate that the characteristics of capitalism can shape the environmental behavior of companies. The authors find that in countries with better cooperation between employees and employers, more economic freedom, and competition between firms, in addition to better HDI and national governance, companies have higher environmental performance. When they are in more developed countries, companies have a greater environmental performance.
Practical implications
Managers must consider the country's characteristics of capitalism when making their environmental decisions and strategies. The findings invite governments to incorporate into their regulations mechanisms to protect other interest groups, not just shareholders.
Originality/value
Few studies have examined environmental performance, which is less susceptible to greenwashing. The metric for environmental performance measures the company's concrete effort in relation to environmental issues and not just the disclosure of information. Additionally, the authors examine characteristics of capitalism supported by Varieties of Capitalism, an approach still little explored in the environmental management.
Keywords
Acknowledgements
The research leading to these results has received financial support from the Spanish Ministry of Science and Innovation under the Grant Agreement PID2020-113498RA-C22 (IRENE), from the Junta de Castilla y León and the European Regional Development Fund under Grant Agreement CLU-2019-03 (Economic Management for Sustainability Unit of Excellence), from the Spanish Ministry of Science and Innovation under the Grant Agreement PID 2020-114797GB-I00 (SODEFGOC) and from the Multidisciplinary Institute of Enterprise (IME) of the University of Salamanca. The authors are also grateful for the financial support provided by CAPES (Coordenação de Aperfeiçoamento de Pessoal de Nível Superior - Brasil).
Citation
Pinheiro, A.B., Oliveira, M.C. and Lozano, M.B. (2023), "When in Rome, do as the Romans do: the effect of characteristics of capitalism on environmental performance", International Journal of Productivity and Performance Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJPPM-04-2023-0193
Publisher
:Emerald Publishing Limited
Copyright © 2023, Emerald Publishing Limited