Environmental Responsibility of Micro and Small Enterprises in The Services Sector in Baja California, Mexico, Its Effect on Competitive and Financial Performance

Objective: The study evaluates the impact generated by Corporate Environmental Responsibility (CER) activities on Competitive Performance (CP) and Financial Performance (FP) of Micro and Small Business (MSMEs) in the service sector in Mexicali, Baja California, Mexico. Theoretical Framework: From a sustainability perspective, corporate environmental responsibility and its relationship with various constructs and their interactions such as competitive and financial performance are analyzed. Method: A survey was developed and applied to 57 company managers in the following sectors: private sector medical laboratories, car repair and laundries, differentiated by the management of waste with potential environmental impact and greater demands in compliance with environmental standards. To confirm the hypotheses raised, an exploratory factor analysis and linear regressions of the constructs formed were applied. Results and Discussion: It was found that there is a strong relationship between CER and CP, however, there is no influence of CER on CP. Research implications: Service sector entrepreneurs continue to view RAE activities as expenses and financial burdens, which prevents them from taking RAE as a development strategy. They have not adopted strategies that allow them to benefit from the RAE actions they carry out, and it prevents a better environmental performance of SMEs in the service sector. Originality/Value: By demonstrating that there is no positive effect of RAE on finances, it is evidence of why the service sector continues to lag behind in its environmental performance and commitment, compared to other economic sectors at local and regional level. It also provides evidence in the theoretical discussion of the effect of RAE on the competitive and financial performance of the company.