Institutional Pressures and Green Practices in Small Agricultural Businesses in Mexico: The Mediating Effect of Farmers’ Environmental Concern

Abstract

Based on institutional theory, this study develops the understanding of how the institutional environment influences the propensity to adopt green practices. Taking into consideration the limitations of institutional theory, this research explores the mediating role of farmers’ environmental concern in the relationship between institutional pressures and green practices. Environmental concern is a factor that can explain why businesses are heterogeneous in their green practices and stances even though they are embedded in the same institutional environment. Data obtained from 130 small businesses in the agricultural sector in Oaxaca, Mexico, reveal that institutional pressures influence green practices directly. The results also reveal that farmers’ environmental concern partially mediates the relationship between these variables. This study tests the applicability of the theoretical framework of the institutional theory in this context and contributes to this theory by considering the role of the farmer. Specifically, it addresses environmental concern as a means through which businesses respond to institutional pressures, and how farmers implement green practices as a means for legitimacy. Environmental concern motivates environmental behavior in search of environmental conservation, but farmers mainly implement green practices to survive in the market in response to institutional pressures.