Abstract
This study aims to develop a better understanding of what drives small and medium-sized enterprises (SMEs) to engage in environmental practices in isolated rural areas. Despite a growing literature on environmental behavior in different contexts, the green activities of SMEs in rural areas remains underexposed. This neglect is remarkable, and deserves attention given the serious depopulation problems they have to face, and the economic and social challenges that lie ahead. Using unique data from 141 SMEs in one of the most sparsely populated regions in the European Union, we study the influence of territorial relations on firms' environmental conduct. Our results suggest that different territorial factors have some impact on the adoption of environmental practices. We report evidence indicative of the role of these factors in shaping environmental decisions. Finally, we offer suggestions for future research that could further develop our understanding of environmental management decisions in rural and underpopulated areas.