This study aims to challenge the conventional view that resources determine the extent of the environmental sustainability orientation (ESO) of small firms in a developing Southeast Asian country context. First, this study attempts to develop a measurement model of ESO of small firms in the manufacturing sector in the Philippines. Second, the study explores the impact of the financial resources on the ESO of firms.
The study uses survey data from 166 small manufacturing firms in three Philippine cities. Multiple regression modelling is used to estimate the relationships between firm resources and ESO.
The results indicate that ESO is a multi‐dimensional construct with three facets – i.e. awareness of, actions for, and appreciation of environmental sustainability. The empirical evidence does not support the conventional firm resources‐ESO proposition.
A proactive ESO is not necessarily beyond the reach of resource‐constrained small firms. The generalisability of the findings, however, is limited to small manufacturing firms in The Philippines.
This study informs owner‐managers of small firms that a proactive ESO does not largely depend on financial resources. Government policies and programs to encourage small firms to become sustainable should focus not just on financial forms of assistance.
To date, this is the only Philippines‐based study and one of the scarce small firm‐focused studies that examine the proposition that small firms are unable to pursue a proactive ESO due to resource constraints.
