Influence of Institutional Factors and the Mediating Effect of Environmental Attitude on Adoption of Environmental Accounting Practices

Abstract

The purpose of this study is to examine the interplay between institutional pressure (coercive pressure, normative pressure and mimetic pressure) and environmental attitude in explaining adoption of Environmental Accounting Practices (EAP). Grounded on institutional theory and theory of planned behaviour (TPB), the study also tested mediation effect of environmental attitude on the relationship. Using quantitative approach, Partial Least Square Structural Equation Modeling (PLS – SEM) was employed to analyse responses from 146 manufacturing firms in Tanzania, and found that: mimetic pressure positively and significantly influences the adoption of EAP, while coercive and normative pressure do not significantly influence the adoption of EAP. Interestingly, environmental attitude fully mediates the influence of coercive pressure and partially mediates the influence of mimetic pressure on the adoption of EAP. However, no mediation effect exists between normative pressure and the adoption of EAP. The study contributes to the body of literature on the role played by environmental attitude in mediating the link between institutional forces and adoption of EAP. Furthermore, the study recommends that, in order for firms to adopt EAP, managers` environmental attitude should be prioritized so as to improve the effect of institutional forces on adoption of EAP.

Keywords: Institutional theory, environmental attitude, Environmental Accounting