Ecopreneurship
Ecopreneurship research emerged more than two decades ago at the intersection of studies on entrepreneurship and environmental policies (Blue
1990; Bennett
1991; Anderson
1998). As a study area, it is still emerging and fragmented (Santini
2017; Dudun et al.
2019), which can be explained by the tremendous variety of disciplines from which it developed, such as political economics, political geography, sociology, business ethics, urban studies, environmental policy studies, and tourism research (Antolin-Lopez et al.
2014; Galkina and Hultman
2016). Ecopreneurship is often seen as a sub-stream of sustainable entrepreneurship (Schaltegger
2002; Dean and McMullen
2007; Parrish
2010) and relates to venturing activity that includes environmental awareness (Gibbs
2009). Similarly, Schaper (
2002) identifies ecopreneurship as a separate type of venturing activity associated with environmentally responsible business practices and values. Thompson et al. (
2011: p. 222) stipulate that “it investigates how environmentally relevant institutions influence entrepreneurial action by examining how individuals recognize, exploit, and create economic growth while simultaneously creating environmental benefits.” Isaak (
1998: p. 88) defines ecopreneurs as “social activists, who aspire to restructure the corporate culture and social relations of their business sector though proactive, ecologically oriented business strategies.”
1 Overall, ecopreneurship has two, often conflicting, aims: to gain economic profit from an identified opportunity and to achieve positive environmental externality (Volery
2002; Libecap
2009; Kirkwood and Walton
2010a; Pacheco et al.
2010).
In their search for differences from traditional entrepreneurship and drivers of green venturing, scholars offered several typologies of ecopreneurs (Linnanen
2002; Walley and Taylor
2002). The most renown of them is the one suggested by Isaak (
2002), who distinguishes between green and green-green ventures. The former relates to conventional enterprises that employ environmental business practices after their establishment, for example, due to changes in market demands, consumer preferences, or industry regulations, and which did not have ecological values in their initial business idea. The latter type describes new ventures that from their inception have environmental values and goals throughout their entire business concept; often, the founders of these firms are ardent environmentalists and their green values are projected onto their creations. With a similar logic, Pastakia (
1998) derives two types of ecopreneurs. Thus, commercial ecopreneurs have profit maximization as their primary goal, while social ecopreneurs are driven by a desire to offer environmentally friendly products and transform industries, so that they adopt more environmentally sustainable models. Overall, the logic behind this categorization points to the importance of a strong ethical and normative component that is the essence of ecopreneurship. Therefore, ecoprenuers’ special attitudes and traits such as green values, environmental ethics, and passion towards sustainability have been recognized as their discrete characteristic (Renfors
2020; Kirkwood and Walton
2014). These particular qualities turn the discussion to the topic of environmental commitment.
Environmental commitment
Many researchers have made an effort to examine the aggregate of environmental concerns, experiences, green values, awareness about ecological problems, and feeling of obligations to resolve them. For example, Kuckertz and Wagner (
2010) call it
sustainability orientation and argue that it determines what ecopreneurs will perceive as market imperfection and what opportunities they will detect; hence, they show that a sustainable orientation positively affects entrepreneurial intention. Other scholars like Schick et al. (
2002) suggest a similar term
ecological orientation to describe this high level of environmental consciousness and show that it influences every aspect behind the establishment of eco-dedicated firms. Moreover, this orientation can be so strong that it remains the integral part of business, even though entrepreneurs know it may impose additional costs and limit entrepreneurial growth. Antolin-Lopez et al. (
2014) conclude that
environmental orientation is a prior driver and antecedent of green ventures and that it explains the tension between working towards economic and environmental goals, which constitutes the core dilemma for ecopreneurs.
Finding explanations for the distinctive traits of ecopreneurs, Keogh and Polonsky (
1998) build on studies about organizational commitment. Assuming that organizations can be committed to various moral philosophies, they offer the concept of
environmental commitment, which relates to a rational or emotional attachment to the environment and a sense of obligation to consider the best interests of the environment when conducting business. Environmental commitment may arise internally, from the personal aspirations of the founders and strategic managerial considerations but also externally as a result of regulatory and market pressures. The authors indicate that this commitment can have four dimensions. Hence, depending on the combinations and intensity of environmental commitment, an entrepreneurial orientation to start a green business and behave in a way that supports a sustainable environment will be different (p. 43):
1
Affective commitment relates to “deep personal desires, efforts, underlying beliefs, emotional attachments, and identification with the importance of the natural environment to society and business.” Ecopreneurs driven by this internal commitment tend to develop all and any environmental opportunities and spend as much energy as possible achieving their environmental goals;
2
Continuance commitment is based on “desires, efforts, and beliefs predicated almost exclusively on the economic and social costs associated with disregarding the environment.” Ecopreneurs with this type of environmental commitment express it by establishing an organizational policy for the environment that guides opportunity identification. The dominant motivation behind this environmental commitment is external stakeholder pressure and “need” to be green.
3
Normative commitment relates to “desires, efforts, and beliefs limited to a sense of obligation – doing only what one is obliged to do for the environment.” Ecopreneurs possessing this commitment define opportunities based on satisfying the obligation of “debt.” Their “greenness” is defined by the mandatory eco regulations and industry standards that they have to follow. Their businesses qualify as green but the motive to start them can be primarily profit. Therefore, additional “green” opportunities that may result in additional costs to their existing normative agenda may be overlooked or treated as not financially worthwhile.
Emphasizing the difference between these types of environmental commitment, Nair and Ndubisi (
2015: p. 167) argue that “managers with affective environmental commitment will stay the cause because they want to, those with continuance environmental commitment because they need to, and those with normative environmental commitment because they ought to.” In addition, the strength and nature of the environmental commitment of individual managers may depend on very personal characteristics like their religious beliefs (Cui et al.
2015; Abdelzaher and Abdelzaher
2015) or value systems (Stead and Stead
2000).
According to Nair and Ndubisi (
2015) and Jansson et al. (
2015), having environmentally committed managers has an influence on the environmental orientation of an entire firm, resulting in pro-environmental strategies, green leadership, and green innovations. Interestingly, continuance and normative types influence an organization’s environmental practices more than affective types (Nair and Menon
2008). The environmental practices, in turn, lead to increased performance because they help to increase revenues or reduce costs through, for example, better access to certain markets, using pollution control technology and paying less charges, decreasing the cost of materials and energy, etc. (Ambec and Lanoie
2008).
Having a strong environmental performance as well as ecological strategies affects a firm’s relationships with various partners (Stead and Stead
2000). Such firms are likely to have more trustworthy relationships with other stakeholders (firms, government, local communities, etc.) and reduce risks associated with these relations (Ambec and Lanoie
2008). Furthermore, they often have a strong environmental reputation, are more attractive to investors (Hussainey and Salama
2010), and are perceived as more reliable partners in strategic alliances (Norheim-Hansen
2015). Altogether, network relationships are crucial for ecopreneurial SMEs because they serve as knowledge pools for their eco innovations (van Kleef and Roome
2007) and help to overcome barriers and liabilities associated with their size and greenness (Lewis et al.
2015). Overall, environmental commitments and reputation are recognized as an essential characteristic of ecopreneurial firms; however, little is known about how they influence their expansion to foreign markets. In the next section, this article will discuss existing research on ecopreneurial internationalization.
Ecopreneurial internationalization
Ecopreneurship studies still need more insights into how green ventures can grow successfully without diminishing their eco philosophy and reducing their environmental commitments (Holt
2012; Kearins and Collins
2012; Antolin-Lopez et al.
2014). This compromise becomes even more challenging in the context of international expansion, which can be complicated by differences in environmental regulations, the incompatibilities of eco standards, and discrepancies in what is regarded as ecological and environmentally friendly. Thus, together with conventional barriers, such as the liabilities of newness and smallness, a lack of resources and knowledge about foreign markets, the internationalization of SME ecopreneurial firms can be highly problematic due to their self-imposed standards. However, current research lacks an understanding of the link between the greening of businesses and their internationalization (Chiarvesio et al.
2014), though this theme is gaining more research attention.
For example, the study by Martín-Tapia et al. (
2010) shows that proactive environmental strategies positively affect the export intensity of SMEs. However, this effect decreases with the size of firms; the smaller the firms, the smaller the effect. In micro-firms, environmental strategies are less likely to influence their internationalization than they would in medium-size companies. Loane et al. (
2015) provide a typology of the growth trajectories of ecopreneurial firms and show the intensity of their internationalization starting from purely domestic firms to born globals and born-again globals. A more recent study by Zolfaghari and Rialp (
2016) looks at the internationalization of SMEs in the Spanish renewable energy industry. Due to a high sensitivity to policy and industry-related trends, they emphasize the external institutional and regulatory factors influencing this process and do not consider the specific characteristics of entrepreneurs. In their later study, they look closer to the individual characteristics of international ecopreneurs (Zolfaghari et al.,
2019); they show that not only knowledge about the industry and foreign markets, formal and informal ties, education, and international experience but also inner values and affective desire to make the world a better place influence internationalization of their businesses. In this regard, the study by Kirkwood and Walton (
2010b) is important because it demonstrates how the green values of ecopreneurs influence their international engagement in supply chain management; for instance, they can be in favor of manufacturing locally despite high costs and also have more local sales due to the high environmental costs of exporting. Hence, ecopreneurs have specific approaches to networking and selecting partners. Next section will discuss the existing research on this topic.
International partner selection and the network approach in IE
The network approach is one of the most developed foundations of IE (Jones et al.
2011; Peiris et al.
2012; Gray and Farminer
2014). Blankenburg Holm (
1995) argue that while the traditional view on internationalization mainly focuses on entry mode selection and entry decision-making, from the network perspective, firms select entry nodes or the “establishment points in a foreign market network” that connect expanding firms with customers and suppliers (Jansson and Sandberg
2008: p. 67). Therefore, a firm’s resources are more a matter of inter-firm interactions than intra-firm characteristics (Hadley and Wilson
2003). From the network view, business expansion abroad is seen as a process that is influenced by all managerial levels and involves numerous actors from both inside and outside a firm network; therefore, expansion abroad is a cumulative, interactive, and unpredictable process of the constant reconsideration of actions and adaptation among network actors under ever-changing conditions. Holm et al. (
1996) emphasize two main features of the network perspective on business exchange relations. First, they cannot be deterministic because they can be developed and sustained only when both parties are interested. Second, the informal component is a significant feature of business relations. Hence, network development is a complex, uncertain, and time-consuming process of multilateral interaction (Axelsson and Johanson
1992; Johanson and Vahlne
2003).
The increasing importance of network relationships during internationalization can be demonstrated by the major changes in one of the most influential theoretical foundations of international business—the Uppsala internationalization process model (Johanson and Vahlne
1977). While the original model shows that companies tend to internationalize gradually, starting with countries of close psychic proximity and then progressing towards more distant markets, the revisited Uppsala model replaces the concepts of psychic distance and the liability of foreignness with network position and the liability of outsidership (Johanson and Vahlne
2009). Hence, the barriers to internationalization are no longer associated with country borders but relate to insider or outsider positions within foreign business networks.
The networking process primarily occurs at the inter-personal level and involves emotional components and feelings of dislike, sympathy, attractiveness, and/or trust. Therefore, personal traits of entrepreneurs are important in networking and partner selection. Often, they add a non-rational and non-goal-driven decision-making to the internationalization of SMEs (Ellis
2000; Ellis and Pecotich
2001; Meyer and Skak
2002; Galkina and Chetty
2015).
Networking during internationalization implies an iterative process of international partner selection. However, research on networks in IE and research on international partner selection have remained somewhat isolated from each other. Perhaps, this separation has happened because the topic of partner selection was initially studied in the broader context of large and established enterprises. It has also been studied in the context of international joint ventures (Glaister and Buckley
1997), franchising (Wang and Altinay
2008; Doherty
2009), and, more generally, in international strategic alliances (Li and Ferreira
2008). Notably, many of these studies are based on the earlier work by Geringer (
1991), who argues that decisions on international partner selection are based on two groups of criteria. First,
task-related criteria referring to the operational skills and resources needed to achieve the goals of partnership; they can include human resources, financial resources, patents, access to marketing channels, physical premises, knowledge of local markets and local culture. Second,
partner-related criteria refer to the past history of the relationships between firms, trust between top management teams, reputation, a partner’s corporate and national culture, the ethical aspects of a partner’s business, etc.
For instance, the study by Al-Khalifa and Peterson (
1999) demonstrates that task-related criteria are important in decisions to engage in a joint venture, while partner-related criteria dominate in decisions on the implementation of the joint venture. Significantly, partner-related criteria like corporate history and the personal characteristics of CEOs have been ranked higher in their importance. Dong and Glaister (
2006) examine international strategic alliances from the perspective of Chinese firms; they find that task-related selection criteria are specific to an alliance and are strongly determined by the strategic motives for their formation. The partner-related selection criteria are more general in nature; thus, they are less influenced by strategic motives. A later study by Islam et al. (
2011) adds the variable of the size of a firm to Geringer’s criteria. They show that when choosing partners for international joint ventures, large and medium enterprises place a greater emphasis on task-related criteria, while small firms find partner-related criteria are more important. They also find that firms with little international experience will value partner-related criteria more, while firms with extensive international experience will focus on task-related criteria. Besides the abovementioned research, Geringer’s criteria have been used by many other studies on international partnering by firms of various age and size (Glaister and Buckley
1997; Tatoglu and Glaister
2000; Varis et al.
2005) and are also relevant for this article.