Institutional pressure and pollution control: Small and medium-sized enterprises

Abstract

PurposeSmall and medium-sized enterprises (SMEs) are critical to China's sustainable development. This study aims to empirically investigate the influence of government and customer pressures on the purchasing decisions of pollution control equipment among Chinese SMEs.Design/methodology/approachWe first conduct an exploratory case study involving four Chinese SMEs to identify the key attributes of pollution control equipment and the decision-making processes within SMEs regarding equipment procurement. We then design a discrete choice experiment based on the insights gained from these case studies. Data are collected from 313 Chinese SMEs and analysed using a random parameter logit model.FindingsThe results indicate that government pressure positively motivates SMEs to purchase pollution control equipment, whereas customer pressure exerts a negative effect. Government and customer pressures enhance the positive impact of the equipment's gaseous waste purification capability on SMEs' purchasing decisions. However, they do not influence the effect of sewage purification capability on such decisions.Originality/valueThe findings enhance understanding of the role of institutional pressure in the green transformation of Chinese SMEs. Additionally, the results provide valuable insights into the equipment capabilities that Chinese SMEs prioritise when purchasing pollution control equipment under the influence of institutional pressure