Local Environmental Non-Profit Organizations and the Green Investment Strategies of Family Firms

We add to the debate on the determinants of firms' green investment strategies (GIS) by looking at societal stakeholders and explicitly testing the role of local environmental non-profit organizations (ENPOs) in GIS engagement by family and non-family firms. We argue that ENPOs favor GIS engagement only by family firms, which, due to their resource constraints, risk aversion and local embeddedness, are more sensitive to ENPOs normative pressure. We also suggest that the role of ENPOs is especially important for family firms' GIS in those sectors with less stringent regulations, where ENPOs may act as a substitute for the coercive pressure of regulation, and promote firms' self-regulatory behaviors. We test and find support for our arguments on a sample of about 2000 Italian manufacturing firms over the period 2001–2003. Our results are robust to the control of observable omitted variables, reverse causality and to alternative model specifications.