Modelling the Impact of Environmental Factors on the Performance of Construction Companies through the Lens of Institutional Pressures

Abstract

While investigating how environmental factors affect the performance of construction enterprises has remained a topical issue in the literature, many concerns about these factors, particularly in developing nations, are still unresolved. This study empirically examines specific environmental drivers affecting construction firms' performance and establishes the role of institutional pressures on construction firms' performance outcomes. Primary data were gathered from a sample of 197 respondents working in Syria's construction industry and were analysed using partial least squares structural equation modelling (PLS-SEM). When considering the impact of some environmental factors (economic environment, human capital, leadership, communication culture, socio-cultural environment, and political environment) on construction firm performance, the findings revealed that institutional pressures (coercive, mimetic, and normative) play a mediating role. However, the mediating influence of institutional pressures on the technological environment and performance of construction firms was not significant, thus indicating the need for more research. The findings of this study make a substantial addition to the current discussion about the most important environmental factors impacting construction firm performance. This study adds to the current debate about the causes of poor performance in construction firms by assisting managers in recognising the impact of the mentioned factors above on a firm's performance.