The interaction effects of institutional constraints on managerial intentions and sustainable performance

This study examines the interaction effects between institutional constraints and managerial intentions on firms’ sustainable performance. It focuses on two distinct dimensions of managerial intentions: proactive versus protective. Using survey data from 145 manufacturing firms in the Pearl River Delta region of Guangdong Province in China, responses were collected from senior executives of each firm. The results find broad support for the proposed hypotheses and the interactional framework. Proactive orientation alone, and in conjunction with low and moderate levels of perceived institutional constraints are all positively related to performance. In contrast, protective orientation alone is negatively related to performance. Also, the interaction effect of perceived institutional constraints on protective orientation was not significant. To conclude, proactive intention tends to have a stronger positive effect on sustainable performance, in particularly under less institutional constraints. Such a positive effect remains significant at low and moderate levels of institutional constraints. On the contrary, protective firms tend to relate negatively to sustainable performance at all levels of the perceived institutional constraints. The results provide important political and managerial implications on sustainable consumption and production in emerging markets.