Why Do SMEs Go Green? An Analysis of Wine Firms in South Africa

Studies on why small and medium enterprises (SMEs) engage in pro-environmental behavior suggest that managers' environmental responsibility plays a relatively greater role than competitiveness and legitimacy-seeking. These categories of drivers are mostly considered independent of each other. Using survey data and comparative case studies of wine firms in South Africa, this study finds that managers' environmental responsibility is indeed the key driver in a context where state regulation hardly plays any role in regulating dispersed, rural firms. However, especially proactive firms are also characterized by expectations of competitiveness gains. The authors thus emphasize the role of institutional context and potential interaction effects between these drivers in explaining the reasons why SMEs engage in pro-environmental behavior in developing countries.