Environmental sustainability orientation and financial resources of small manufacturing firms in the Philippines

Abstract

Purpose – This study aims to challenge the conventional view that resources determine the extent of the environmental sustainability orientation (ESO) of small firms in a developing Southeast Asian country context. First, this study attempts to develop a measurement model of ESO of small firms in the manufacturing sector in the Philippines. Second, the study explores the impact of the financial resources on the ESO of firms. Design/methodology/approach – The study uses survey data from 166 small manufacturing firms in three Philippine cities. Multiple regression modelling is used to estimate the relationships between firm resources and ESO. Findings – The results indicate that ESO is a multi-dimensional construct with three facets – i.e. awareness of, actions for, and appreciation of environmental sustainability. The empirical evidence does not support the conventional firm resources-ESO proposition. Research limitations/implications – A proactive ESO is not necessarily beyond the reach of resource-constrained small firms. The generalisability of the findings, however, is limited to small manufacturing firms in The Philippines. Practical implications – This study informs owner-managers of small firms that a proactive ESO does not largely depend on financial resources. Government policies and programs to encourage small firms to become sustainable should focus not just on financial forms of assistance. Originality/value – To date, this is the only Philippines-based study and one of the scarce small firm-focused studies that examine the proposition that small firms are unable to pursue a proactive ESO due to resource constraints