Determinants of firms' greenness towards sustainable development: A multi‐country analysis

Abstract A higher greenness of firms is crucial for the mitigation of climate change and other environmental pollution problems. This paper analyses the drivers of a greening of firms from a theoretical and empirical perspective. Three theoretical concepts—the stakeholder theory, the institutional theory and the resource‐based view—contribute to identifying the determinants of firms' greenness. In our empirical analysis based on recent World Bank data, greenness is measured by different environmentally related measures firms adopted over the preceding 3 years, such as more climate‐friendly energy generation, waste minimisation and the improvement of lighting systems. The results of probit and negative binomial regressions show that a high affectedness by environmental regulation triggers firms' greenness. In addition to this ‘forced greenness’, the results demonstrate that innovative firms are more likely to realise environmentally related measures. This finding also holds for firms affected by extreme weather events. A highly competitive environment is negatively connected with greenness. The corporate social responsibility of family‐owned firms seems to be higher than non‐family‐owned firms.