The concept of Green Banking is a paradigm shift in the business ideology of a bank. Based on the Institutional theory, this study aims to examine the influence of stakeholders’ (top management, customer, competitor and community) pressure on Green Banking Adoption in the Pakistan banking industry. It also examines the moderating effect of “green capability” on the relationship between stakeholders’ pressures and Green Banking Adoption. The moderator was derived from the pollution prevention capability of the Natural Resource–Based View (NRBV) of the Firm.
This study adopted a quantitative methodology in which data was collected through self-administered questionnaires through the survey method. The population of this study was bank branches in Pakistan, and simple random sampling was used to generate the sample. The unit of analysis was the bank branch, and branch managers were the respondents of this study. Data analysis was carried out using SMART PLS. This study conducted a disjoint two-stage analysis for the higher-order dependent variable, i.e. Green Banking. Measurement model analysis was run at both stages to assess the reliability and validity of the constructs and items. Hypotheses testing was done through the structural model analysis using bootstrapping.
The findings of this study showed a positive relationship between Top Management Pressure, Customer Pressure, Competitor Pressure and Green Banking Adoption. Community Pressure did not significantly influence Green Banking Adoption in bank branches. Green Capability positively moderated the relationship between Customer and Competitor Pressure and Green Banking Adoption.
Green Banking has limited academic research, especially in the context of developing countries. This study aims to fill the research gap currently existing in Green Banking through the integration of Institutional Theory and the NRBV of the firm.
