The impact of country of origin and operation on sustainability practices and performance

This study aims to explore and test two hypotheses on the effects of country of origin and operation on the relationships between 1) stakeholder pressures and the adoption of internal and external sustainability practices, and 2) sustainability practices and environmental as well as social dimensions of sustainability performance. These hypotheses are tested through the Hierarchical Linear Model (HLM) using data from the 6th International Manufacturing Strategy Survey (IMSS-VI) conducted in manufacturing assembly plants in 22 countries around the globe. The results show that country of origin and operation do not moderate the relationship between stakeholder pressures and the adoption of sustainability practices, while they have a moderating effect on the relationship between sustainability practices and performance. Studies that investigate the associations between stakeholder pressures, the adoption of sustainability practices and performance are relatively scarce and not quite conclusive. Several scholars have called for studies on the role of contextual variables. The country context in which a firm is embedded is important for understanding firms’ behavior, yet very often neglected. This paper aims to reduce this void. This research also provides managerial insight into the effects of sustainability practices on sustainability performance.