What Drives Sustainable Business Models? A Hierarchy of Pathways for SMEs
This article has been Reviewed by the following groups
Listed in
- Evaluated articles (PREreview)
Abstract
Institutional theory assumes that coercive, normative, and mimetic pressures operate as parallel forces driving organizational isomorphism. This study tests this assumption by exploring the impact of pressures on eco-innovation and environmental performance in manufacturing SMEs. A two-wave, time-lagged survey of 271 manufacturing SMEs in China was analyzed using structural equation modeling (SEM) using IBM SPSS Statistics 27 and AMOS 21.0. The findings demonstrate a significant impact of institutional forces. Specifically, mimetic pressure (competitive pressure) most strongly influences eco-innovation, while normative pressure (stakeholder pressure) most strongly influences environmental performance. Coercive pressure (environmental regulations) is relatively weak. This research advances institutional theory by measuring the mediation magnitudes, revealing that these pressures affect both direct and innovation-mediated pathways. Mimetic pressure is most dependent on eco-innovation for performance (32.5% mediated), while normative pressure mostly uses direct channels (10% mediated). The fsQCA results complement these findings by providing interchangeable pathways to achieve Environmental Performance. By considering all pressures together, this study establishes a hierarchy of influence where competition stimulates eco-innovation, and stakeholders stimulate performance. This study provides evidence that these pressures are not substitutes because they affect different degrees of reliance on eco-innovation. This study shows that, under fragmented enforcement, non-regulatory pressures may be more significant than regulatory ones.
Article activity feed
-
-
This Zenodo record is a permanently preserved version of a PREreview. You can view the complete PREreview at https://prereview.org/reviews/20483590.
This study looks at how three types of institutional pressure, stakeholder demands, environmental regulations, and competitive pressure from rivals, shape eco-innovation and environmental performance in 271 Chinese manufacturing SMEs. The central finding is that these three pressures don't all work the same way. Competitive pressure is the biggest driver of eco-innovation, with about a third of its effect on environmental performance flowing through innovation. Stakeholder pressure, on the other hand, drives environmental performance more directly. Regulatory pressure turns out to be surprisingly weak on both counts, which the authors put down to inconsistent enforcement at the SME level …
This Zenodo record is a permanently preserved version of a PREreview. You can view the complete PREreview at https://prereview.org/reviews/20483590.
This study looks at how three types of institutional pressure, stakeholder demands, environmental regulations, and competitive pressure from rivals, shape eco-innovation and environmental performance in 271 Chinese manufacturing SMEs. The central finding is that these three pressures don't all work the same way. Competitive pressure is the biggest driver of eco-innovation, with about a third of its effect on environmental performance flowing through innovation. Stakeholder pressure, on the other hand, drives environmental performance more directly. Regulatory pressure turns out to be surprisingly weak on both counts, which the authors put down to inconsistent enforcement at the SME level in China. The fsQCA side of the analysis confirms that there are multiple routes to achieving strong environmental performance, and eco-innovation shows up in every one of them.
What genuinely moves the field forward here is the quantification. Previous studies knew mediation was happening but didn't measure how much of each pressure's effect was travelling through eco-innovation versus working directly. This paper does that, and the differences between pressures are striking enough to challenge some long-held assumptions in institutional theory.
Major issues
Environmental performance is measured through self-reported survey responses rather than objective data like verified emissions figures or third-party sustainability audits. This means the study is ultimately measuring what managers believe about their company's environmental performance, not what's actually happening on the ground. That's a limitation worth taking seriously, especially given the paper's ambitious claims.
There's also a noticeable oversight in the author contributions section, which uses placeholder labels like "Author A" and "Author B" instead of actual names. That needs to be corrected before the paper goes anywhere near a journal.
Minor issues
The conceptual model figure doesn't display properly in the version available which makes the structural model harder to follow for readers coming in cold. The discussion of why regulatory pressure is so weak could really be expanded since it's arguably the most surprising and practically significant finding in the whole paper.
Some of the denser paragraphs in the discussion section would benefit from being broken up into shorter, more digestible chunks. A few key terms like "mechanism differentiation" and "dual pathway framework" also appear early without much explanation, which can leave readers slightly lost before the concepts are properly defined later on.
Competing interests
The author declares that they have no competing interests.
Use of Artificial Intelligence (AI)
The author declares that they did not use generative AI to come up with new ideas for their review.
-