Knowledge resources as a mediator of the relationship between recycling pressures and environmental performance

Pressures to recycle are an increasingly prevalent influence on firms. Understanding of factors however that will lead firms to both: a. successfully capture or reuse their waste, and b. benefit from the practice, is still in a nascent form. Whether regulatory instruments such as recycling laws or increased disposal costs influence firms’ environmental performance is an area of active debate. Firm’s internal capabilities in particular, such as their experience and expertise, may limit the performance outcomes of such pressure. In this study, the impact of recycling pressures on firms’ environmental performance was assessed relative to their use of knowledge resources. Using a sample of U.S.-based manufacturers, knowledge resources were identified as a significant mediator of the influence of regulations, industry practices and disposal costs on firms’ environmental performance. Firm size, industry and ISO14001 certification were used as control variables. These findings have policy implications as well as contribute to understanding of the impact of increased institutional and economic pressures on firms to recycle their waste.