Impact of Institutional Pressure on Cleaner Production and Sustainable Firm Performance

Abstract

This study aspires to investigate the influence of institutional pressure (IP) on cleaner production (CLP) practices and sustainable firm performances in the clothing industry of Bangladesh. Moreover, the research work explores the mediating role of cleaner production between institutional pressure and firms’ environmental performance. It also analyzes environmental performance as a mediator between cleaner production and firms’ economic performance. Data were collected from 246 textile and garments manufacturing units and analyzed using structural equation modeling (SEM) with the partial least square (PLS) method. The study findings unveiled a direct and positive relationship between institutional pressure and cleaner production, environmental performance and cleaner production, and firms’ environmental and economic performance. The study’s results also reveals that cleaner production partially mediate the relationship between institutional pressure and environmental performance while environmental performance is also partially mediate between cleaner production and firm’s economic performance. The research outcomes recommend that the clothing manufacturing sector welcome institutional pressures and employ cleaner production practices, leading to sustainable performance. Finally, the study highlights the managerial and theoretical implications.

1. Introduction

Sustainability concern has become prominent in the manufacturing firm’s management agenda. The underlying factors are climate change and the depletion of natural resources that force traditional management practices to be revisited [1]. In addition, the global consequences of COVID-19 have generated unprecedented challenges for business organizations across all sectors and industries, compelling them to perceive and adapt innovatively [2]. The ever-changing market demands invite manufacturing organizations to rethink their current production processes and business strategies [3]. Consequently, managers from manufacturing companies are on the march, seeking an innovative approach to bounce back from the crisis and secure sustainability [4]. Manufacturing firms’ bedrock sustainability principles are green initiatives and cleaner production concepts [5]. With ignorance of sustainability aspects, manufacturing firms may incur financial catastrophe.

Cleaner production (CP) is the vanguard among green approaches subscribing to sustainable production [6], unifying natural resource utilization and production practices. Cleaner production shrinks effluent by 12.56% and carbon dioxide emission cost by 20.98%, which depicts that it propels economic ballooning and curtails environmental impacts [7]. In 2015, the United Nations declared 17 sustainable development goals (SDGs) and 169 targets with the consent of 195 member nations to uplift the living standards of their country’s people by 2030 [8]. A significant relationship exists between SDGs and cleaner production approaches in the clothing industry [9]. Research results found that cleaner production adoption fits SDGs 9, 12, and 15, promoting economic and environmental gains. There are two types of factors that promote CP implementation in firms. The internal is eco-efficiency indices, and the external is institutional pressures.

Institutional pressures (IP)—the key element driving firms to seek technology and developments that reduce their environmental footprint [10]. Over the past few years, institutional theory has drawn more attention in the operations management and supply chain management sectors. The institutional theory was developed on the premise that businesses institutionalize internal processes or systems by imposing either values or limits [11]. These institutional pressures emerge from government regulatory bodies, international client standards, or suppliers. From the institutional theory perspective, institutional pressure can stimulate organizational changes [12], for instance, organizational performance and environmental innovation [13]. Institutional pressures drive organizations to incorporate ecological practices [14], an integral part of cleaner production. Cleaner production expands as a prolific tactic to halt environmental impacts and increase resource efficiency [15]. A strong relationship exists between institutional pressure, cleaner production, and a firm’s sustainability. Hence, exploring and developing a relationship framework among institutional pressures, cleaner production, and sustainable firm performance is necessary.

This study seeks to investigate the impact of institutional pressures on cleaner production practices and sustainable firm performances in the context of one of the most polluting industries: the clothing industry. Globally, the clothing industry is already functioning above the planet’s resource limit [16]. The clothing industry’s pressure on the planet’s resources has increased significantly over time and negatively impacted the environment, society, and economy [17]. Rigorous measures such as effective garment waste reduction, recycling, and disposal management must be taken to confront it [18]. Cleaner production practices can significantly improve the clothing industry’s performance in light of institutional pressures. Until recently, the impact of institutional pressure has been widely studied in developed countries, but there has been little research in the developing world, particularly in the growing Asian countries such as Bangladesh.

Bangladesh has gained recognition as a textile and apparel product sourcing powerhouse among all the international apparel retailers. The nation is the second-largest exporter of textile and clothing goods globally and has a newly rising economy in south Asia. Currently, this sector has taken on the role of the nation’s economic engine, quickly transforming it into an emerging developing country. The value of textile and apparel exports in the 2017–2018 fiscal year was USD 30.61 billion, or 83.49% of Bangladesh’s total export revenue [19]. This industry generates 13% of the GDP and 4.4 million jobs, 82% of which are held by women. Despite rising international concerns about labor conditions and safety, the findings reveal a lack of accountability and transparency in social and environmental governance procedures [20]. Numerous groups and fashion-forward individuals have supported the movement for a suitable environment for tomorrow, but the Bangladeshi garment and textile sectors remain far beyond this consciousness, and it poses a risk of losing the global market [21]. Therefore, a radical change is needed in clothing manufacturing firms to lessen resource use, waste, and emissions.

Most previous studies about institutional pressures centered on the impact of institutional pressure on green supply chain management (GSCM) [22,23] and sustainable supply chain management (SSCM) [24]. The impact of intellectual property on environmental and operational performance has been studied in light of top management’s mediating roles [25]. The authors of [26] investigated the influence of IP (customer and competitive pressure) and environmental pressure on firm performance, with the moderating effect of market uncertainty. The authors of [27] explored IP’s impact on green innovation. The authors of [28] examined the influence of IP on clean technologies and clean business strategies. The authors of [29] analyzed the impact of IP on adopting sustainable technologies with the moderating variable of firms’ production capacity. The authors of [30] examined how IP influences the process of implementing quality management systems. To date, research has not been found that explains the mediating effect of cleaner production between IP and environmental performance or the mediating impact of environmental performance between cleaner production and firm economic performance. The effect of control variables (firm size, firm age, ISO 14001) on environmental and economic performance is yet to be explored. In order to fill up the research gap in the context of the clothing industry of Bangladesh, this study sets forth the following research question:

(1)

What are the effects of coercive, normative, and mimetic pressure on cleaner production in the Bangladeshi textile manufacturing industry?

(2)

What is cleaner production’s mediating role in the relationship between institutional pressures and environmental performance?

(3)

How does environmental performance mediate the relationship between cleaner production and economic performance?

This study makes several important advances in both theory and practice. First, our work uncovers a novel antecedent of cleaner production while illuminating the existing literature on cleaner production. In addition to identifying the intermediary link between institutional pressures and sustainable firm performance, the mediation impact of cleaner production approaches also results in enhanced firm performance.

The article is organized with a literature review in Section 2 and a research framework and hypotheses development in Section 3. The study’s research methodology is covered in Section 4, and the results and findings are covered in Section 5. The discussion and implications are summarized in Section 6, and the conclusions are presented in Section 7.

2. Literature Review

2.1. Institutional Pressure

Organizations have goals, decision-making processes, norms, and values. Managers are influenced by external stakeholders when making decisions [31]. According to institutional theory, internal and external environmental pressure significantly affects organizational goals and decision making [32,33]. This theory suggests that organizations obtain legitimacy through the best practices in their field. This theory compels organizations to undertake innovative systems for transformation. “Institutional pressure (IP)” is described as the impact of the institutional environment, which includes social norms, rules, and culture, on the organizational form, structure, or behavior [34]. The authors of [35] have expanded institutional pressure into three-dimensional isomorphic pressure, namely coercive, mimetic, and normative pressure.

Coercive pressures induced both formal and informal stress from powered organizations, such as government institutes, regulatory standards, and social expectations in which the organization operates [35,36]. Regulations are a significant external influence on firm environmental activities [37]. Hence, managers are stressed by coercive pressure from government regulations to adopt green practices in the organization; otherwise, they may face a threat from the regulator, such as penalties, legal actions, or even dismissal of the business [23,38]. Among institutional pressures, coercive pressures instigate firms on the most significant scale to spend more on environmentally friendly endeavors [39]. Eco-friendly human resource tactics [40], pro-environmental products [41], and environmentally friendly purchasing schemes [42] are the business strategies that contribute to firms’ environmental performance.

Normative pressures result from standardized norms of professional groups, such as formal educational institutions, professional associations, NGOs, suppliers, customers, and the general public [43,44]. In response to social and environmental legitimacy, the firms may abide by the external stakeholder’s guidelines, standards, and norms [34]. Typically, direct or indirect external stakeholders have pressured organizations to adopt environmental practices in their firms [45]. Normative pressures originate from local actors, i.e., the media, industrial consortiums, and educational institutions [31]. These actors set the regulations and standards firms must follow to preserve legitimacy [46]. Along with legitimacy, firms can attain support by clinging tangibly to environmental practices [36]. Firms that fail to satisfy norms and standards defined by normative pressures are quarantined and socially excluded.

Mimetic pressures result when an organization wants to cope with uncertainty by imitating the activities of successful competitors in the same business domain [39,45]. Mimetic pressures induced firms to follow through with leading firms in a particular industry. Companies are inclined to imitate the behavior of other social network members since they are social networks themselves [38]. More specifically, when organization goals are ambiguous, technologies are less understood, or they operate in an uncertain environment, such firms tend to imitate the other firms that they consider reliable or prosperous [47]. The above three types of institutional pressure influence the organization to adopt and implement GSCM practices and establish itself as a legitimate company [43,48].

Environmental commitment and firm resource capability are essential to exploring and garnering knowledge about how institutional pressures influence ecological management practices [49]. A high degree of ecological commitment facilitates firms’ compliance with environmental protection as part of their corporate social responsibilities (CSR) [50]. It motivates firms to nurture a green culture that eases the implementation of environmental management practices, which leads to a decent rating in environmental performance. In other words, a commitment to environmental sustainability strengthens the link between institutional forces and environmental practices. Firms can develop unparalleled caliber and competitiveness and increase business performance using internal resources [44]. Firms with adequate resources display strong willpower and are more likely to respond to institutional pressure because they care about their reputations. To minimize additional expenditures, however, businesses with limited resources are reluctant to implement environmental management procedures [51].

Institutional pressures do not directly impact environmental performance but act profoundly when a mediator (i.e., environmentally friendly business strategy, ecological orientation) comes into play in between. These mediators aid in shrinking the gap between institutional pressures and ecological performance [52] and propel the organization to invest more in mediators, which ultimately lay the foundation for better environmental practices [53].

2.2. Cleaner Production

Cleaner production is one of many environmental practices that solely focus on recycling raw materials and limiting industrial waste production. The United Nations Development Program first introduced the idea of cleaner production, a fundamental tool for protecting the environment [54,55]. While a firm uses raw materials, water, and energy efficiently, productivity targets can only be achieved by practicing cleaner production [56]. According to [57,58], cleaner production is a preemptive effort to lessen the impact of production and product on the environment.

Over the past three decades, cleaner production has significantly expanded in both concept and application. Cleaner production is the ongoing implementation of an incorporated restrictive environmental policy [59]. Cleaner production addressed product development processes throughout the life cycle. The three pillars of sustainability—economic, social, and environmental—should be interwoven into cleaner production. Organizations are prime performers in implementing cleaner production. Cleaner production has limited its scope to the industrial sector only. The objectives of cleaner production activities are highlighted [60]. Minimization of waste, heat, and noise appended to cleaner production scope. Finally, the efficient use of natural resources, producing durable products, recycling, and recovery came under the “cleaner production” umbrella [61].

Cleaner production is a forward-looking tactic to encounter environmental problems before they evolve. Management’s center of attention should be on preventing environmental issues from happening rather than finding corrective action [58]. End-stage solutions and incorporating environmental regulations need to be revised to gain cleaner production. Cleaner production should rise above meeting environmental regulations, as they do not prevent pollution. Cleaner production necessitates the assessment of environmental issues from product design to process design. Firms should embody ecological aspects in their business planning and supply chain management to observe the better outcome of cleaner production [62].

What factors enable cleaner production and give rise to competitive advantage may become the next issue. Systematic reviews of studies undertaken looking at cleaner production found varied drivers. The authors of [63] investigated the role that knowledge management strategy, marketing capability, and entrepreneurial intention have in promoting cleaner production and found that these drivers substantially affect successful cleaner production in enterprises. Top management and the financial availability of organizations are critical factors in setting out cleaner production [64]. The authors of [65] proposed five crucial factors for installing cleaner production practices: material replacement, internal organization, internal recycling, technological update, and product improvement. The authors of [66] cited tools and techniques, research and continuous improvements, leadership and management, and customer relations as the most notable strategic drivers to boost cleaner production results.

Cleaner production is the organization’s inner scheme, which seeks to build a strong relationship with its suppliers to ensure efficient usage of natural resources and cleaner energy [10]. A firm must be led by productive leadership through active communication with backward and forward linkage for cleaner production implementation. It draws essential commitment from suppliers and ample response to frontier firms’ new action that ripples through the entire supply chain [66]. The cleaner production operation team must be cross-functional, multi-level, and matrix-structured, including top management and the organization’s prime department, with sufficient knowledge flow to meet tactical and operational thinking. Consequently, there will be no gaps among team members for changes incurred by the project [67].

The implementation of cleaner production has been examined in various industries and sizes of firms. In order to implement cleaner production methods, the company’s size is critical [68]. However, financial scarcity is a challenge for SMEs [69]. Small firms consider monetary benefits before making any endeavor to meet environmental regulations. Lack of capital, loan insufficiency [70], and expensive clean technologies [71] are the crucial factors that debilitate small firms’ capability to go for cleaner production. Medium-sized businesses are willing to invest in environmental compliance in exchange for a quick return on investment, but they frequently comply with environmental management systems due to market and stakeholder pressure. Large firms stand out among all in the case of practicing cleaner production. It can handle a complex project that requires a massive influx of investment. Another reason is that it has the vision to position itself as an eco-friendly brand both in the marketplace and in consumers’ minds [68].

Cleaner production applications sharpen the production process and develop sustainable products [72]. The authors of [73] analyzed that environmental considerations must be prioritized throughout the product development process and disposal to attain the best outcome from cleaner production. Cleaner production safeguards the environment through process improvement and product development, which ultimately subscribe to environmental sustainability [74,75]. All the variables related to the environment are evaluated by cleaner production concepts throughout the organization, particularly in production. Cleaner production and environmental management systems are interdependent [76]. In their study, [77,78] revealed that cleaner production positively correlates with environmental sustainability. However, [79] pointed out that a firm often needs to utilize the full extent of cleaner production to lessen environmental impacts, thus compromising environmental sustainability.

In the quest for eco-efficiency, cleaner production is a powerful tool. Organizations benefited economically and environmentally from cleaner production [80,81]. In their study, [82] listed less use of raw materials, a lower amount of water usage, a handful of materials discarded as landfills, better occupational health, and nimble integration of environmental laws as economic and ecological outcomes of cleaner production. Competitiveness enhances, and the firm’s performance escalates due to cleaner production [55]. Thus, a firm should stick to a cleaner production plan to ensure continual environmental progress [83], promising benefits, and a suitable sign of change [75].

2.3. Sustainable Firm Performance

Organizations are becoming increasingly vulnerable to crises and difficulties that endanger their survival and sustainability [2]. To tackle these setbacks, the management boards of firms are looking for green solutions. Recent times have witnessed a booming interest in sustainable firm performance. The authors of [78] defined sustainability as meeting the needs of the company’s primary and secondary stakeholders without sacrificing its ability to meet the demands of incoming stakeholders. However, the idea of firm performance is hard to pin down, though it has substantial exposure in the academic world [84]. Firm performance is an unavoidable fact that traces the advancement of the interaction of all the resources and calibers of firms in accomplishing their goal. Firm performance is the effective and efficient usage of resources to achieve a firm’s objectives [78]. The concept of firm performance hinged on creating value through the interplay of resources [84]. Every firm strives to attain better performance. However, firm performance indicators need to be unified [85].

Size and sales (ROA, ROI, profit margins, sales growth, and market share increase.) measure firm performance. Later, employee behavior, product and market leadership, and public responsibility are included in the list [86]. Firms typically utilize traditional financial ratios to gauge their performance, which is not potent for measuring growth and sustainable performance in the long run [87,88], as many have reported these financial ratios as short-term [89,90]. These financial ratios may need to spot the bigger picture.

Researchers often deal with economic, social, and environmental performance coherently, though these firm performance measures vary considerably [91]. Large enterprises started applying an intensified economic aspect of sustainability [92]. Still, firms that consider all three measures coherently will outweigh those that solely focus on financial performance [93,94]. To chase sustainability, ref. [95] suggested that firms develop a well-ordered method to align environmental and social performance with economic performance. Though economic and ecological aspects were the focal point of sustainability performance, social dimensions remained blurred [96]. Social size is a mediator in bridging the gap between economic activities and environmental outcomes [97]. Firms must keep short-term profitability and long-term ecological sustainability in equilibrium under volatile conditions [98]. The authors of [99] offered reverse logistics as a triple bottom line (TBL) contingency for manufacturing firms to pursue sustainable performance.

A series of previous researchers have exerted their efforts in many ways to show how manufacturing organizations can implement sustainability. The authors of [100] highlighted industry 4.0 technologies (IoT, big data analytics, cloud computing, and blockchain.) to adopt sustainability in Indian manufacturing firms. The authors of [101] emphasized green innovation practices as inseparable from securing sustainability in Chinese manufacturing units. The authors of [102] have emphasized the importance of sustainable manufacturing and usage in Japanese companies embracing sustainability. The authors of [102,103] observed a positive association between sustainable supply chain practices, supplier cooperation, and increased firm performance in Western European firms. The authors of [104] examined the effect of ecological sustainability on the dimensions of a firm’s performance in India using the SEM technique, resulting in a remarkable influence. The authors of [105] found a substantial impact of eco-friendly manufacturing techniques and eco-friendly supply chain integration on a firm’s sustainability performance in Ghanaian manufacturing SMEs. The authors of [106] revealed that CSR has a productive tie-in with firm performance. However, CSR does not have any direct connection with firm performance. CSR enhances firm performance through competitive advantage, reputation, and customer satisfaction. The authors of [107] suggested embracing lean practices to escalate firm performance.

Why should firms take the initiative to be sustainable? Many previous scholars have attempted to respond to this question. The authors of [1] listed two reasons: firstly, firms may walk along the sustainability path due to pressure from the exogenous regulatory body to avoid penalties. Secondly, firms see the adoption of sustainability as an opportunity to create a new market for sustainable products and reduce material utilization.

Many manufacturing firms have experienced a massive financial crisis, denying their sustainability [100]. Manufacturing firms in developed countries are well-positioned to achieve sustainability due to infrastructure and technological advantages, whereas firms in developing countries are still in their infancy [100,108]. Manufacturing organizations are salient contributors to the nation’s economy, explicitly in developing countries [109]. To build a stable economy, stakeholders, managers, and top management of manufacturing firms should revisit the existing performance indicators and incorporate economic, environmental, social, operational, and technological aspects to ensure that the firm’s performance is sustainable.

3. Research Framework and Hypothesis Development

3.1. Research Framework

This study asserts that institutional forces might propel the adoption of cleaner production processes at the business levels, which is inspired by current literary works. According to this study, there is a direct link between cleaner production and better environmental and economic performance (Figure 1). Additionally, this study advanced the idea that cleaner production and environmental performance serve as a mediator between institutional pressure and environmental performance as well as between cleaner production and economic performance in turn.

3.2. Hypothesis Development

3.2.1. Coercive Pressure and Cleaner Production

A recent study [110] explored the influence of coercive pressure on cleaner production, and their findings were quite exciting. On the surface, it appears that coercive pressures result in cleaner practices. However, in today’s world, which is characterized by an accessible economic environment, the sharing of knowledge via publicity enabled by the rise of the Internet, and growing recognition of the effects of sustainable development [111]. Often these customers trust that major studios should give it back as much as those who take from the natural setting after witnessing the consequences of a lack of attention to sustainable practices and blind furtherance of financial returns. Manufacturing companies should realize that as they seek to meet their numerous needs, they use limited resources that require cleaner production approaches [112]. For a better understanding, a notion of coercive isomorphism has to be considered. Recently, governments, whether governmental or regional, have begun to enact regulations and laws that play a key role in requiring sustainable development to meet environmental performance requirements. By complying with these requirements, these businesses may profit and prevent unnecessary severe penalties. When a resource-dominant institution, government agencies, and others believe that such practices are incompatible with social and cultural goods, Cleaner Production may be imposed on them [113]. As a result, the stronger firm performance relies on institutions in the environment, and the fewer options a firm has to prevent severe penalties, the greater the coercive pressure, and the more a firm will be motivated to continue using CP. According to institutional theory researchers, coercive pressures such as regulations are essential. As a result, we hypothesize:

H1. 

Coercive pressure is positively related to cleaner production.

3.2.2. Normative Pressure and Cleaner Production

Before applying ideas of cleaner production, it is critical to understand normative pressure. Suppliers, consumers, professional associations, and social entities will typically exert normative pressure in the manufacturing context. They are the most important sources of normative pressures [114]. Normative pressure is critical when it comes to adopting more responsible production practices in the developing world. The authors of [115] took a different approach to normative pressure. According to them, normative pressure is linked to various firms’ compliant actions and behaviors in the clothing manufacturing industry. It leads to cooperative relationships between industry players in the developed world and markets such as Europe, resulting in networks that can withstand external pressures. Normative pressures ensure that users in the external environment, stakeholders, and the leadership of companies operate in a cooperative social environment that encourages compliance [116].

Furthermore, because these stakeholders are more conscious about the environment and thus are highly improbable to be pleased with symbolically having to conform to ecologic standards and norms, firms cannot gain legitimacy solely through celebratory practices. Cleaner production is more popular because it demonstrates a serious commitment to reducing emissions, provides a more positive response to normative pressures, and is easier to gain recognition and support for [117]. Firms will face resistance, isolation, and social protest if they do not comply with these environmental standards and norms, do not capitulate to normative pressures, and refrain from enforce such cleaner production practices. Based on this analysis, the following is predicted.

H2. 

Normative pressure is positively related to cleaner production.

3.2.3. Mimetic Pressure and Cleaner Production

Mimetic pressure is based on the idea that organizations tend to compare themselves with companies within the same environment they deem successful and respectable. The described process is referred to as mimetic isomorphism, and it is similar to institutional isomorphism presented by [118]. There are essential differences between the two kinds of isomorphism. The authors of [119] stated that coercive pressures stem from a desire to compete, and organizations tend to conform to their rivals’ standards to gain a competitive edge.

On the other hand, mimetic pressure comes from organizations operating in an environment that does not necessarily have to be close or competitive [120]. Instead, it could be companies in the same industry, in the same country, or of the same size. The main point is that organizations that exert mimetic pressure are regarded as respectable and successful. Mimetic pressure is extreme when the course of action is unclear, as is typically the case when making decisions regarding clean production [121,122]. When companies are unsure, they mimic the actions of organizations they deem effective and prosperous [123]. Strong mimetic pressures can persuade governments and stakeholders to ensure that companies, such as foreign-owned and subsidiaries of multinational corporations, adopt advanced environmental management and technologies, resulting in greater effectiveness in local organizations. Furthermore, companies that interact with mimetic pressures can gain economic advantages by being more competitive. As a result, while cleaner production is more expensive, it allows companies to adapt to mimetic pressures and can provide a market edge.

H3. 

Mimetic pressure is positively related to cleaner production.

3.2.4. Coercive Pressure and Environmental Performance

Coercive pressure occurs when organizations face institutional pressure from other entities on which they rely to operate in a particular way. The most common or evident way this occurs is when powerful companies force weaker businesses to behave in a particular way or comply with explicit norms to earn respect and authority [124]. Failure to comply in this case may result in legal or financial sanctions, as well as the firm’s operations being halted in some cases. Government coercion is the most powerful in general, but it can come from any other source [125]. The dynamics of power can be formal or informal. Because non-profits rely on stakeholders for funding and operations, and their reputation is important when seeking support, the effects of coercive pressure are more severe on them than on for-profit organizations [13,126]. In general, the government wields the most coercive power in the manufacturing industry. However, some industry institutions have the ability to impose coercion. Coercive pressures compelled the organization to adopt eco-design and green purchasing, which improved environmental performance. Similarly, regulatory pressures were discovered to be likely drivers of green purchasing and investment recovery. Hence, we hypothesize:

H4 

. Coercive pressure is positively related to environmental performance.

3.2.5. Mimetic Pressure and Environmental Performance

Mimetic pressure results in numerous possibilities in terms of environmental performance, and it works at different levels and mediates by various things. A company’s environmental performance is determined by multiple factors that are not always necessarily dependent on the business itself. For example, the organization’s supply chain, the organization’s performance, and the degree of control the organization has over its supply chain affect its environmental performance and ability to influence it by forcing changes in the supply chain [127]. Having identified organizations they deem successful, companies might want to mimic their performance in terms of their environmental focus but essentially be powerless unless the supply chain changes due to institutional or coercive pressures. Furthermore, even though mimetics can impact an organization’s environmental performance, the nature of this influence is mediated by the company’s internal environmental practices [128]. The organizational culture and the processes in place regarding environmental management determine whether the imitation of respectable and successful entities will result in the desired environmental performance [118]. In addition, it highlights the extent of an organization’s environmental impact that can be learned due to environmental disclosure, which in most cases is voluntary. In the modern world, environmental exposure is characterized by not entirely accurate information, and thus, it cannot be considered an accurate representation of the organization’s environmental performance [129,130]. A company with a healthy disclosure culture can accurately measure its environmental performance and the effect of mimetic pressure.

H5. 

Mimetic pressure is positively related to environmental performance.

3.2.6. Cleaner Production and Environmental Performance

Cleaner production and improved environmental performance are thought to be positively correlated. Several critical aspects of this statement merit discussion. To begin, when it comes to the impact of clean production on environmental performance, the size of a company and its effect on organizational culture are critical [21]. Customers’ expectations of small and medium-sized businesses are not as high as those of larger corporations [131]. Many of these businesses believe their actions have little environmental impact because consumers do not carefully consider their behavior and actions and, as a result, do not incorporate cleaner production principles into their operations [132]. Companies may therefore find ways to monitor their production processes and make environmental performance an essential part of their outcomes assessment. CP can help firms reduce production waste, which can improve their environmental performance, which implies that continued successful implementation of CP would have a great effect on the performance of clothing manufacturing firms. Based on the concept, we hypothesize:

H6. 

Cleaner production is positively related to environmental performance

3.2.7. Environmental Performance and Economic Performance

Profitability is the primary goal of any firm, and a combination of various corporate practices influences a company’s economic performance. With increased environmental concerns, business organizations must embrace environmental practices to promote sustainable development [133]. Business activities that generate pollution or produce waste contribute to damage caused to ecosystems and do harm that is irreversible. Companies must increase their production costs to embrace environmental practices, eventually affecting their profitability [134]. It just goes to illustrate how directly their economic success is affected by the adoption of environmental policies.

On the other hand, it has been argued that environmental performance leads to increased savings in terms of costs for companies and, thus, increased sales and improved economic performance. According to [135], there is no definite connection between environmental performance and economic performance. Still, they assert that adherence to environmental practices may cause a slight positive change in a company’s economic performance. The authors of [136] maintain that it is not the environmental performance of a business organization that directly affects its economic outcomes but the attitudes that a company embraces concerning the management of environmental practices. It concluded that environmental performance might lead to better or worse economic performance depending on firms’ measures. There is room for more research on how factors that shape environmental performance may influence the economic outcomes of a company.

H7. 

Economic performance and environmental performance are favorably correlated.

3.2.8. The Role of Cleaner Production in Mediating Institutional Pressures and Environmental Performance

Institutional pressures are considered an influential factor that affects an organization’s environmental performance more constructively [29]. Organizations respond favorably to improve their environmental performance since failing to address these challenges poses a serious danger to their legitimacy. For instance, coercive forces have a significant impact on an organization’s environmental performance by encouraging the development of a waste reduction and recycling system. Likewise, organizations are forced to take environmental performance more seriously due to mimetic pressure.

Mimetic pressures, as defined by [137], encourage firms to enhance their environmental performance as a result of the successful outcomes attained by rival organizations. Companies become more prone to environmental organizations when they minimize their pollution of the air, water, and earth in response to mimetic influences [14]. The greatest driving force for the adoption of a green supply chain is normative pressure. Normative pressures are associated with professionalization, shaping organizational response [31]. Organizations are able to learn about innovations and their corresponding advantages and costs, courtesy of the normative forces that are exhibited through the cross-functional relationship between supplier and customer [4]. A large portion of these pressures are the result of increased professionalization, stemming from concern about education and the professional training organizations receive [138]. Cleaner production is one big ecological step when environmental operation becomes the norm. Organizations would adapt to tremendous normative pressures resulting from constant interaction with other vendors, consumers, and trade entities [139].

Given the limited government subsidies, cleaner production should be driven mainly by the market. Companies react to benefits and incentives such as early compliance with regulations, competitive pressures, enhanced brand image, and payment of the total cost of cleaner production services. Prices for resources such as water and energy, as well as the cost of emitting waste, are still too low in China to provide a big incentive for emission control. Furthermore, consumer preferences for “green” products in the local market are still in their initial phases. Concerns are growing about the organization’s environmental performance [60,131]. The institutional pressure that various stakeholders are exerting is one of the key causes of this worry [34]. In order to deal with this institutional pressure, organizations are producing cleaner production, a crucial organizational resource that also improves the organization’s environmental performance. Therefore, cleaner production serves as a link in the chain connecting institutional pressure and environmental performance. There are two justifications for cleaner production’s mediating function in the interaction between institutional pressures and environmental performance. First, institutional pressure encourages businesses to use cleaner production methods, which is the cornerstone of greater environmental performance [61,62]. The organization is under pressure from institutional factors to manage and drive initiatives that advance and safeguard environmental issues, hence enhancing the organization’s environmental performance [140]. In order to facilitate future moves toward implementing environmental performances in our nation, cleaner production may affect institutional pressures on adoption and intentions to understand. This would encourage the ongoing use of green supply chain infrastructure and support. Based on these arguments, the hypothesis formulated is as follows:

H8a. 

The relationship between coercive pressure and environmental performance is positively mediated by cleaner production.

H8b. 

The relationship between normative pressure and environmental performance is positively mediated by cleaner production.

H8c. 

The relationship between mimetic pressure and environmental performance is positively mediated by cleaner production.

3.2.9. The Mediation Effect of Environmental Performance between Cleaner Productions and Economic Performances

Through the ongoing execution of the new and green preventive environmental strategy to operations, products, and services to increase overall efficiency and decrease risks to humans and nature, this study postulates an indirect impact of green practices such as cleaner production alignment on environmental performance. We suggest that manufacturing and marketing coordination mediates the impact of green initiatives, such as cleaner production, on environmental performance. We anticipate that businesses with access to and control over cleaner production will develop green practice-related skills, collaborate with other departments more effectively, and enhance their environmental performance. Economic performance is influenced by environmental performance, which results in lower prices for energy and material purchases, waste treatment and disposal fees, and penalties for environmental mishaps. Hence, we hypothesize:

H9. 

Environmental performance positively mediates the relationship between cleaner production and economic performance.

3.2.10. Control Variable

To emphasize the solidity of the study, we introduced three control variables: firm age, size, and industry type. The intricate and long value chain of the Clothing industry constitutes a diverse set of stakeholders ranging from spinning to the RMG industry. So, they were reacting differently to the similar institutional pressure imposed. The literature review shows that the size of firms also played a critical role in accommodating institutional pressure and cleaner production practices. Large firms positively related to institutional pressure and sustainable firm performances. Similarly, mature firms are more likely to adopt cleaner production practices possessing vast resources and capabilities.

4. Research Methodology and Data Analysis

4.1. Questionnaire Design and Variable Measurement

In three phases, the questionnaire is designed. Firstly, a broad literature review picked out the variables’ items. Secondly, items are examined by a team of industry and academic experts knowledgeable about institutional pressure and cleaner production. Finally, a pilot study is introduced, incorporating 15 participants who have an in-depth idea of cleaner production and its involvement with the firm’s economic performance. Feedback received from the respondents was considered for further improvement of the survey instruments. The Cronbach alpha value of all the first-order constructs is more than the threshold value of 0.7, which testify the reliability of the questions [141]. There were two sections to the survey instrument. The participants’ demographic data were collected in the first section, and the variables’ items were covered in the second. The items were scored on a five-point Likert scale, ranging from 1—“strongly disagree” to 5—“strongly agree.” The dimensions for institutional pressure were measured from [42]. Cleaner production dimensions were adopted from [40]. Moreover, the dimensions for sustainable firm performance were measured from [41].

4.2. Sample and Data Collection

Textile firms are the primary source of ecological damage as they send out harmful waste to the environment. Here, cleaner production can significantly affect the firms’ environmental and economic performance [42]. This research takes into the textile firms of Bangladesh as of its population. According to [20], in Bangladesh, there are 4560 readymade garments manufacturing firms currently operating, and Bangladesh has secured the 2nd most prominent apparel exporter position in the world market. In addition, there are 425 spinning mills, 796 weaving factories, and 240 dyeing industries. Most of these firms are concentrated in Savar, Gazipur, and Narayanganj areas near Dhaka. In this study, for surveying, we randomly selected 500 textile firms. The manager of the manufacturing sites received the printed questionnaire together with a cover letter outlining the objectives of the study. Respondents are from diverse departments, from production to marketing. Relatively every participant is well educated, belongs to the middle to top management, and is quite conscious about the questions. The period of data gathering in 2019 was from January to March. Participants were randomly called and sent follow-up emails following the initial three weeks. There were 266 answers altogether. However, 20 responses were excluded due to incomplete and missing answers. Finally, a total of 246 responses were selected for further assessment. From

Table 1. Demographic profile of the sample.

Category	Frequency (N)	Percentage (%)
Sex
Male	220	89.4
Female	26	10.6
Education
Undergraduate	33	13.4
Graduate	145	58.9
Postgraduate	66	26.8
Doctorate	2	0.8
Work experience
Less than five years	31	12.6
5–10 years	48	19.5
11–15 years	137	55.7
16–20 years	28	11.4
More than 20 years	2	0.8
Position
Executive officer	80	32.5
Senior executive officer	27	11
Assistant manager	93	37.8
Senior manager/Manager	26	10.6
General manager/DGM	12	4.9
Managing director/Director/CEO	8	3.3
Company type
Yarn manufacturing	10	4.1
Fabric manufacturing	29	11.8
Garments manufacturing	102	41.5
Dyeing industry	73	29.7
Printing industry	7	2.8
Washing industry	7	2.8
Home textiles	2	0.8
Sweater manufacturing	6	2.4
Accessories industry	6	2.4
Textile chemical industry	4	1.6
Working department
Production	91	37.0
Supply chain	91	37.0
Operations	30	12.2
Marketing	26	10.6
Research and development	8	3.3
Age of company
Less than 5 years	28	11.4
6 to 10 years	39	15.9
11 to 15 years	56	22.8
16 to 20 years	36	14.6
More than 20 years	87	35.4
Employee
Under 200 employees	49	19.9
Over 200 to 500 employees	27	11.0
Over 500 to 1000 employees	29	11.8
Over 1000 to 2000 employees	33	13.4
Over 2000 employees	108	43.9
Is your company ISO 9000 certified?
Yes	178	72.4
No	68	27.6
Is your company ISO 14001 certified?
Yes	140	53.9
No	106	43.1
Total	246	100

, it is visible that the respondents belong to diverse working areas, including operation, production, and supply chain management. Participants are primarily male graduates with impressive work experience; most respondents serve as assistant managers in the industry. Leading firms are 20-plus years old with more than 2000 employees. A total of 72.4% of firms are ISO 9000 certified, and 53.9% are ISO 14001 certified.

4.3. Data Analysis Procedure

As (PLS-SEM) software works well for exploratory research, we used it in our study. Additionally, the PLS-SEM is a tried-and-true technique for using empirical data to support the theory [141]. Two steps of the assessment were completed. In the first stage, we evaluated the measurement model, and in the second, we examined the structural model. PLS has been regarded as an effective technique in the study of cleaner manufacturing since it increases the interaction between theory and empirical data’s degree of flexibility [142]. The SEM approach can assess the link between each latent variable’s manifest variables and their associations with each latent variable [143]. Manifest variables are measured variables that work as indicators for the unmeasured variables, the latent variables. In our study, the latent variables are coercive, normative, mimetic pressure, cleaner production, environmental performance, and economic performance. Additionally, there are 15 manifest variables.

4.4. Measurement Model

By examining the construct reliability, convergent validity, and discriminant validity, the measurement model was assessed [141]. In order to test the reliability of the construct, we first evaluated its composite reliability and used Cronbach’s alpha to do so. We found that the first-order construct’s combined reliability ranges from 0.848 to 0.894, and the Cronbach alpha value falls between 0.775 and 0.851 (see

Table 2. Test of reliability.

	Cronbach’s Alpha	Composite Reliability	Average Variance Extracted (AVE)
CLP	0.810	0.875	0.638
CP	0.851	0.894	0.628
CoP	0.796	0.881	0.711
ENP	0.775	0.848	0.529
MP	0.785	0.875	0.700
NP	0.792	0.878	0.706

). Both values are greater than the cutoff point of 0.7, indicating that the measurement model build is valid and appropriate for the model [143]. Secondly, in order to assess convergent validity, the average variance extracted (AVE) was taken into account [144]. All of the AVE values from the measurement model fell between 0.529 and 0.711. These numbers are greater than the cutoff point of 0.5, which validates the convergent validity of our model [142]. Then, to evaluate discriminant validity, the cross-loading matrix and Fornell–Larcker were employed. The square root of each construct’s AVE, which should be bigger than its highest correlation with any other construct, is ultimately used to grade the Fornell–Larcker criterion. According to our model, the Fornell–Larcker criterion is satisfied since the square root of AVE, which serves as the diagonal elements, is bigger than the off-diagonal correlation in the rows and columns (see

Table 3. Latent variable descriptive, correlations, and discriminant validity.

	Mean	SD	CLP	CP	CoP	ENP	MP	NP
CLP	3.644	1.07	0.799
CP	3.739	1.082	0.736	0.792
CoP	3.769	0.986	0.577	0.519	0.843
ENP	3.856	1.009	0.676	0.746	0.489	0.727
MP	3.818	0.952	0.495	0.431	0.567	0.49	0.837
NP	3.981	0.868	0.545	0.472	0.561	0.508	0.658	0.84

). The Heterotrait-monotrait ratio (HTMT) of correlations was lower than 0.9, indicating the satisfactory HTMT (see

Table 4. Heterotrait-monotrait ratio (HTMT).

	CLP	CP	CoP	ENP	MP	NP
CLP
CP	0.884
CoP	0.717	0.632
ENP	0.85	0.891	0.621
MP	0.615	0.527	0.709	0.624
NP	0.676	0.576	0.706	0.645	0.825

). The outer loading of the measurement items on the related construct should be bigger than all of its loadings on other constructs in order to pass the cross-loading test. The cross-loading matrix results in our model showed that all measurement items have higher loading on their intended construct (see

Table 5. Item cross-loading matrix of the constructs.

	CLP	CP	CoP	ENP	MP	NP
CLP1	0.737	0.553	0.379	0.506	0.359	0.425
CLP2	0.829	0.639	0.458	0.597	0.415	0.475
CLP3	0.81	0.588	0.496	0.524	0.355	0.389
CLP4	0.816	0.567	0.504	0.53	0.447	0.45
CP1	0.547	0.815	0.397	0.636	0.268	0.384
CP2	0.533	0.829	0.359	0.575	0.307	0.344
CP3	0.614	0.826	0.434	0.601	0.381	0.367
CP4	0.542	0.776	0.45	0.527	0.389	0.39
CP5	0.671	0.71	0.418	0.603	0.37	0.383
CoP1	0.468	0.44	0.85	0.406	0.441	0.381
CoP2	0.51	0.437	0.885	0.399	0.483	0.443
CoP3	0.479	0.434	0.792	0.43	0.507	0.591
ENP1	0.533	0.584	0.351	0.656	0.353	0.365
ENP2	0.472	0.513	0.394	0.722	0.33	0.397
ENP3	0.454	0.577	0.388	0.806	0.401	0.415
ENP4	0.445	0.453	0.286	0.662	0.306	0.255
ENP5	0.54	0.565	0.349	0.777	0.379	0.396
MP1	0.473	0.394	0.551	0.43	0.852	0.574
MP2	0.394	0.362	0.482	0.415	0.876	0.591
MP3	0.367	0.32	0.374	0.38	0.778	0.481
NP1	0.403	0.398	0.484	0.436	0.458	0.809
NP2	0.5	0.413	0.515	0.43	0.61	0.878
Np3	0.463	0.38	0.416	0.417	0.576	0.832

). As a result, the cross-loading, Fornell–Larcker criteria, and HTMT results show that the data’s discriminant validity is satisfied.

5. Results and Findings

5.1. Structural Model and Hypothesis Testing

The structural model was created to examine the relationships between various constructs in the hypothetical model’s route (Figure 2). In two steps, the hypotheses are tested. In order to determine the relevance of the path coefficient, we first investigated the direct path analysis of the latent variables using bootstrapping with 5000 subsamples. The mediation effects of CLP between CoP and ENP, NP and ENP, and MP and ENP, as well as the mediation effects of ENP between CLP and EP, were also examined. The explanatory power of the structural model is measured by the R2 value for the dependent variable. The predictive validity of the structural model was confirmed by the fact that it explained 41.1% of the variance in cleaner output, 49.2% of the variance in environmental performance, and 55.72% of the variance in economic performance [23]. The link between the dependent and independent variables is investigated in this study using the path coefficient (β) and t-statistics.

Table 6. Bootstrapping results for structural model evaluation.

Hypothesis	Path	Path Coefficient	T-Statistics	p Values	Decision
H1	CoP -> CLP	0.362	5.534	0 **	Supported
H2	NP -> CLP	0.267	3.99	0 **	Supported
H3	MP -> CLP	0.114	1.504	0.133	Not Supported
H4	CoP -> ENP	0.073	1.127	0.26	Not Supported
H5	MP -> ENP	0.178	2.91	0.004 *	Supported
H6	CLP -> ENP	0.546	10.197	0 **	Supported
H7	ENP -> EP	0.746	26.465	0 **	Supported

** significant at $p<0.01$, * significant at $p<0.05$.

shows that CoP and NP have progressively a direct and statistically significant positive connection with CLP (t = 5.534, β = 0.362, p < 0.001) and CLP (t = 3.99, β = 0.267, p < 0.001). H1 and H2 are therefore supported. The same is true for the relationships between MP and ENP (t = 2.91, β = 0.178, p < 0.001), CLP and ENP (t = 10.19, β = 0.546, p < 0.001), and ENP and EP (t = 26.46, β = 0.746, p < 0.001). Hence, H5, H6, and H7 are accepted. However, the relationship between MP on CLP (t = 1.54, β = 0.114, p = 0.133) and CoP on ENP (t = 1.127, β = 0.073, p = 0.26) is not significant. Thus, hypotheses H3 and H4 are not supported.

5.2. Test for Mediation Effect

We examined the mediating role of cleaner manufacturing and environmental performance, according to [144]. The independent and mediating variables (iv-mv) and the mediating and dependent variables (m-dv) direct paths are measured to establish the path coefficient, which indicates the mediation effect (i.e., mv-dv). According to the results of the bootstrapping, there may be a considerable mediating influence [140]. In order to determine the magnitude of the mediating effects, the variance accounted for (VAF) has also been quantified.

Table 7. Summary of mediation results.

Indirect Path
Hypothesis	Path	B	Path	B	Mediation Effect B	t-Values	Total Effect	VAF	Decision
H8a	CoP-CLP	0.717	CLP-ENP	0.836	0.599	5.338 *	0.836	0.717	Partial
H8b	NP-CLP	0.677	CLP-ENP	0.766	0.519	5.967 *	0.766	0.677	Partial
H8c	MP-CLP	0.617	CLP-ENP	0.755	0.466	6.060 *	0.755	0.617	Partial
H9	CLP-ENP	0.852	ENP-EP	0.587	0.500	3.379 *	0.890	0.562	Partial

Notes: bootstrapping (n = 5000), * significant at $p<0.001$.

. highlighted the outcomes of the mediating effects. The results indicate that the mediation of CLP, CoP, NP, and MP has a substantial indirect effect on ENP (β = 0.599, p < 0.001), (β = 0.519, p < 0.001), and (β = 0.466, p < 0.001). Similar to ENP, CLP significantly influences EP indirectly through ENP (β = 0.500, p < 0.001). The results supported the H8a, H8b, H8c, and H9 hypotheses. This finding shows that the link between CoP, NP, MP, and ENP is partially mediated by CLP. On the other side, ENP also partially mediates the relationship between CLP and EP.

6. Discussion and Implications

6.1. Discussion

This study lays out a conceptual model, evaluates the relationship between institutional pressure and cleaner production practices, and assesses them regarding environmental and economic performance. The findings demonstrate a significant association between institutional pressures and the adoption of cleaner production. In the previous research on cleaner production practices, much attention has been directed to the different levels of orientation (green entrepreneurial orientation, market orientation, and knowledge management), which left a research gap in identifying antecedents of cleaner production at the firm level. This research work filled that research gap. According to the findings, institutional pressures led to cleaner production techniques in the textile sector. The study validates that textile and clothing industries with dynamic capabilities in functioning with sustainability and cleaner production can adapt to institutional pressures exerted by consumers and competitors by incorporating environmental and economic strategies.

The study’s outcome reveals a significant relationship between institutional pressures and cleaner production adoption, except for mimetic pressure. Institutional pressure has a strong positive impact on encouraging circular economy capabilities in businesses, while coercive, mimetic, and normative pressure exerts varying degrees of moderating effects [145]. Stakeholder pressure and green innovation are mediated by corporate environmental ethics [146]. Evidence from the previous study supports our hypothesis by demonstrating that institutional pressures have a strong and substantial link with cleaner production [147]. The results aligned with [148] findings, which ensure that institutional pressures urge firms to implement cleaner production practices and pursue sustainable performance. The study’s results support the relationship between mimetic pressure and environmental performance but do not support the association between coercive pressure and environmental performance. The textile industry in Bangladesh raised its environmental awareness due to mimetic pressure, while the sector failed to garner attention by imposing coercive pressures.

Previous studies suggest that cleaner production techniques are adversely correlated with financial success but positively correlated with the process and environmental outcomes [63]. A complicated interplay between economic and social performance and cleaner manufacturing is also present [98]. In addition, [149] has shown a positive association between eco-innovation, cleaner production, and firm’s performance. Our study supports the link between environmental performance and economic performance at the company level. With cleaner production practices implemented, the industry welcomes more environmentally friendly design, technology, process, and innovation. Significant ecological awareness in the production stages results in fewer wastes and sludge in the environment, ultimately adding to the firm’s economic performance.

This research shows a positive mediation effect of cleaner production between coercive pressure, normative pressure, mimetic pressure, and the environmental performance of the firms. Even though there is no direct link between mimetic pressure and cleaner production, cleaner production mediates an indirect association between mimetic pressure and environmental performance in the clothing industry of Bangladesh. However, our research emphasizes the importance of expanding CP applications beyond the key sustainability focus areas to new services such as sustainable supply chain development. Buyers can take advantage of this balanced framework development to inform suppliers further down the supply chain about the long-term economic advantages of using a cleaner manufacturing process. Many small-scale distributors who source indistinct parts in mass may need more financial resources to integrate the ideal manufacturing operations.

These findings contribute to the following. Initially, the study creates a framework for exploring sustainability from various perspectives. The research highlighted motivation factors for incorporating sustainability strategies, which is essential for enhancing sustainable firm performance. Finally, it examined the discrepancy in sustainable firm performance related to firm size and age. Those certain developments, combined with cleaner production, will assist firms in environmental improvement, effectively meeting the UN Sustainable Development Goals. Together, the findings make a significant theoretical and practical contribution to research throughout this emerging development.

6.2. Theoretical Implications

This study advanced the literature on institutional pressures and cleaner production practices in multiple ways. It guides the researchers to explore institutional pressure and cleaner production practices in greater detail from theoretical and practical perspectives. Firstly, three institutional pressures (coercive, normative, and mimetic) act differently to aid firms in pursuing cleaner production adoption and implementation. Secondly, this study contributes to the literature on cleaner production by identifying the firm’s predecessors in cleaner production practices. In the previous study, researchers were more attentive to entrepreneurial management orientation, knowledge management orientation, and market orientation and their direct associations with cleaner production and sustainable firm performances. Thirdly, from the review of the previous research work, it was evident that institutional pressure alone cannot initiate environmental performance in the industry. When cleaner production came in to mediate, the missing link between institutional pressure and environmental performance was established. The study’s results extend the literature by locating the mediation role of cleaner production between institutional pressure and environmental performance. Finally, this study adds to the literature by highlighting the mediation function of environmental performance between cleaner production and economic performance.

6.3. Managerial Implications

The study helps the managerial body of the clothing industry in a versatile way. Firstly, the research results helped the practitioners perceive the benefits of implementing institutional pressure and how these drive sustainable firm performance. Secondly, firms’ business extension and value addition depend on cleaner production practices. These certainly help reflect consumers’ willingness to buy green products, and the large segment of customers’ frequent purchases will substantially boost the firm’s economy. Thirdly, the study’s outcome enlightens the textile industry’s management about cleaner production process strategies. Practitioners in the industry learn about the requirements for cleaner production practices, such as what changes must be made to the firm’s structure, processes, and product design. Finally, the study’s findings may help the clothing industry in developing countries (such as Sri Lanka, Bangladesh, and India) reduce environmental impact and promote cleaner production practices. The findings can further be extended to other manufacturing sectors (e.g., leather, plastics, and chemicals.)

6.4. Limitations and Future Research Directions

This study has a few limitations that should be addressed in order to open up future research opportunities. Our research is based on information gathered from Bangladeshi organizations. As a result, we are restricted in our ability to generalize our findings broadly. As a result, the current study should be expanded to include data from developed and emerging nations and assess the research results from Bangladeshi organizations. Hence, the given context prevents the generalization of the study’s findings. Researchers in the future may incorporate versatile manufacturing units from other countries, for instance, Pakistan, India, and Sri Lanka. Secondly, the study seeks responses from single informants only, while including other stakeholders inside and outside the manufacturing unit may tweak the research findings and implications. This study analyzed the direct and indirect effects. A new mediator between cleaner production and environmental performance and environmental and economic performance may be considered by the researcher in the future, which might be an outstanding research focus.

We recommend including additional variables, such as trust, conflict resolution, and commitment, to strengthen our model. The results could have been different if we had used more CP, NP, and MP measures. Despite the limitations of this study, it provides interesting insights for scholars who want to investigate the role of institutional pressures and top management in CP implementation. Moreover, the institutional pressure, seller feedback, and eventual connectivity structure are specific to the clothing industry. Future studies can assess the significance of findings in various industries (e.g., fast-moving consumer goods, information technology) as well as regions around the world (e.g., frontier markets), in addition to an endeavor to generalize the results through the use of a quantitative survey.

7. Conclusions

The study reveals how institutional influences affect the adoption of cleaner production techniques in the textile sector, and it then advances the firm’s sustainable performances both from economic and environmental perspectives. The study’s findings contribute to the effect of institutional pressure on cleaner production, the impact of cleaner production on environmental performance, and the influence of environmental performance on economic performance. Cleaner production practices are the best way to diminish the adverse effects on the environment. Therefore, research topics relevant to institutional pressure and cleaner production are gaining much attention from the academic world. The study observed a positive direct relation between institutional pressure and cleaner production, and in addition, there found a positive direct connection between cleaner production and environmental performance.

Moreover, the findings suggest a positive relationship between environmental and economic performance. The study contributed to institutional pressure and cleaner production literature, and it guided the academics to advance the theory and helped the practitioners to build up eco-friendly manufacturing organizations. The research work helps the management in strategic decision making in adopting cleaner production practices. The study set up the base for the practitioners, academics, and managerial body to substantiate the importance of institutional pressure and cleaner production practices in the firms to uplift the sustainable performance index.