Institutional force and firm performance: Do employee green involvement and flexibility-oriented culture matter?

Despite the increasing awareness in perceived institutional force, whether and how it affects firm performance has not been confirmed. According to stakeholder theory, this article explores how perceived institutional force influences different types of firm performance via employee green involvement, as well as the moderating role of flexibility-oriented culture. We collect two round data from 317 Chinese manufacturers to examine the hypotheses. The findings manifest that both perceived business and social force promote employee green involvement. Employee green involvement partially mediates the effect of perceived business force on financial performance, while fully mediates the effect of perceived business force on environmental performance. Additionally, employee green involvement partially mediates the effects of perceived social force on financial and environmental performance. Our research also indicates that flexibility-oriented culture positively moderates the impacts of perceived business and social force on employee green involvement. This research enriches the institutional force literature by verifying how and under what conditions it impacts firm performance.