Is There a Missing Link? Exploring the Effects of Institutional Pressures on Environmental Performance in the Chinese Construction Industry

Although institutional pressures have huge strategic implications for organizational activities, this certainly does not mean that organizations under institutional pressures can improve environmental performance automatically. Institutional pressures are critical but not sufficient to affect environmental performance directly. Therefore, additional research is needed to explore the missing link between institutional pressures and environmental performance. Based on the “pressure-response-performance” framework, this study integrates perspectives of institutional theory and organizational learning to argue the mediating role of organizational learning in the relationship between institutional pressures and environmental performance. Data were collected via 268 valid questionnaires from construction firms located in Shanxi Province in central China. Hypotheses in the conceptual model were tested with structural equation modeling. Empirical results reveal that both coercive and mimetic pressures have significantly positive effects on organizational learning, whereas normative pressures have a non-significant effect on organizational learning. Besides that, organizational learning has a significantly positive effect on environmental performance. In addition, organizational learning partially mediates the relationship between coercive pressures and environmental performance and completely mediates the relationship between mimetic pressures and environmental performance. By exploring the mediating role of organizational learning, the article uncovers the missing link in the relationship between institutional pressures and environmental performance.