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Does firm size matter? Evidence on the impact of the green innovation strategy on corporate financial performance in the automotive sector
Abstract
In the past few years, there has been increasing awareness regarding the significance of the Green Innovation Strategy (GIS) in the academic and practical fields. Hence, it becomes important to determine the correlation between the GIS and the Corporate Financial Performance (CFP). This study attempted to determine the dynamic correlation between the GIS and the CFP, with regards to the firm size. For this purpose, this study has collected data for 163 international automotive firms, from the CSRHub database, for the period ranging between 2011 and 2017. Furthermore, we also used the dynamic panel data system, i.e., the Generalised Method of Moment (GMM) method, for estimating this relationship. The empirical results indicated that the GIS positively affected the CFP. Interestingly, we also uncovered that the firm size moderated the negative correlation between the GIS and the CFP. The small-sized firms showed higher green innovation investments return than the larger-sized firms, which indicated that these smaller firms were more prone to seek variation and visibility, for accessing better resources. Furthermore, due to the extensive scrutiny of the stakeholders, these small firms could generate higher profits. The implications for managers and the theories in this regard are then discussed.
... In addition, a profitable company is often better equipped to uphold its social obligations by actively supporting community development, ensuring the welfare of its workers, monitoring product safety and quality, etc. (Wang, 2021). Additionally, strong corporate governance and internal control mechanisms are often present in conjunction with outstanding performance by the company (Lin et al., 2019). A practical corporate governance framework promotes effective decision-making, transparency and compliance, efficient risk management, and protection against corruption (Baraibar-Diez and Odriozola, 2019). ...
... This suggests that having strong corporate performance might help companies get better ESG ratings. However, some research has found that corporate performance may have adverse effects on ESG evaluation (Huang, 2021;Lin et al., 2019). According to Huang's (2021) research, companies score better in ESG evaluations when their financial performance is subpar. ...
... According to Huang's (2021) research, companies score better in ESG evaluations when their financial performance is subpar. When companies experience financial difficulties, they may place more emphasis on social responsibility and environmental concerns to make up for their poor financial performance (Lin et al., 2019). Additionally, several studies note that industry traits and geographical variations may have an effect on how corporate performance affects ESG ratings. ...
... To date, there have been many studies that deliberate the benefits and costs of innovation and imitation, as discussed earlier, and many on the causes and consequences of green R&D (De Marchi, 2012;Jaffe et al., 2002;K. H. Lee & Min, 2015;Lin et al., 2019;Noailly & Ryfisch, 2015) as well. In this regard, this article makes the very first effort that connects these studies by studying the contingent influence of independent green R&D. ...
... For instance, K. H. Lee and Min (2015) use a sample of Japanese manufacturing firms during the period 2001-2010 and examined the impact of green R&D investment; they found a negative relationship between green R&D and carbon emissions yet a positive relationship between green R&D and financial performance. Lin et al. (2019) collect data on international automotive firms and argue that small-sized firms show higher green innovation investment and therefore generate higher profits than large-sized firms. Fan et al. (2019) suggest that stricter environment regulations in China lead to a greater probability of green efforts and a sharp decline in firms' profits, capital, and labour. ...
... Employees Following Cieślik and Michałek (2018) and Lin et al. (2019), we also consider a firm's employment size -the total number of full-time, permanent workers -as an important variable that explains R&D activities and productivity. In addition, following Fleisher et al. (2011), employees' education attainment should importantly affect a firm's productivity as well. ...
This article empirically studies the influence of firms' independent research and development on productivity. It considers two R&D behaviours of firms: independent innovation and dependent imitation. We acquire data from 28 post-communist economies between 2017 and 2019, and innovatively create indices to evaluate how likely firms were to independently perform green R&D that enhance their environmental friendliness. We also estimate firms' productivity with a semiparametric method. Overall, independent green R&D does not significantly affect productivity. However, further analysis that considers the firms' globalisation statuses reveals interesting and robust findings. Among firms that are actively involved in the global market, a higher R&D independence does not promote productivity. Firms producing only domestically, however, expect a positive influence of R&D independence on their productivity. This finding remains robust under alternative analyses regarding general R&D. Other factors such as labour input, relationships with the government, and informal market competition also significantly affect productivity.
... Prior research has shown that mid-and small-size companies are more flexible and adventurous than large-size companies under idiosyncratic risk, and are more willing to pursue high-risk, high-reward activities . Lin et al. (2019) find that small-size companies are more inclined to seek and access resources for green innovation because the return on green innovation investments for small-size companies is significantly higher than for larger-size companies. Therefore, non-state-owned and small-size companies may be more flexible to deal with climate risk and have a more proactive operating strategy, which decreases the negative impact of climate risk on Frontiers in Energy Research frontiersin.org ...
... Some empirical findings have shown that the efficiency of smallsize companies is higher than that of large-size companies (Lin et al., 2019). To control the impact of the company size, this research uses the natural logarithm of the company's total assets at the end of each year as a control variable. ...
... This may be because large-size companies have to consider more aspects of responsibility such as shareholder responsibility and employ more robust operating strategies than those of small-size companies. This result is consistent with Lin et al. (2019), who find that small-size companies which are more maneuverable and variated are more inclined to pursue green innovation than large-size companies. ...
Chinese heavy-polluting companies have been facing enormous challenges in responding to climate risk and energy transformation. This paper uses panel regression model and investigates the impact of climate risk on corporate green innovation in Chinese heavy-polluting listed companies from 2011 to 2020. The empirical results show that climate risk adversely affects green innovation in heavy-polluting companies, and this effect persists throughout a series of robustness and endogeneity tests. Climate risk may affect corporate green innovation through decreasing R&D investment, lowing resource allocation efficiency and increasing company risk. Climate risk has a greater negative impact on mid-western, state-owned and large-size heavy-polluting companies, but can be mitigated by the development of green finance, digital finance and marketization. These findings may help heavy-polluting companies fully utilize existing resources, policies, and channels for green innovation and mitigate climate risks.
... As these challenges have become more evident and pressing, manufacturing firms have started to integrate sustainability into their core businesses strategies (Ghassim and Bogers, 2019). Moreover, stricter regulations of negative environmental and social externalities from the industry, combined with growing consumer awareness and environmentalism are changing how business is conducted across industries (Lin et al., 2019). Firms increasingly acknowledge that to remain competitive, environmental and social considerations need to be integrated into their core business strategies (Leal-Rodríguez et al., 2018). ...
... By adopting both inside-out (resource-based theory) and outside-in (stakeholder theory) perspectives (Kolk and Pinkse, 2007), the present study contributes to the ongoing scholarly discussion of how competitiveness is created from sustainability (Hermundsdottir and Aspelund, 2021). Finally, it poses the question of whether managers' perceived success for the adoption of sustainability strategies matches up to the actual long-term financial performance of the firm, addressing the common methods bias problem in previous studies (Lin et al., 2019;Wijethilake et al., 2018). ...
... Sustainability innovations is defined in this study as innovations that "improve sustainability performance, where such performance includes ecological, economic, and social criteria" (Boons et al., 2013, p. 2). Thus, sustainability innovations can provide solutions to the conflict between environmental and social degradation and economic development (Lin et al., 2019). ...
... Furthermore, green innovation was found to have a strong connection with green management performance as a significant component of green performance (Xue et al., 2019). Results of recent studies revealed that thorough adopting a green approach could boost resource savings, end up creating extra sustainable methods, provide a competitive advantage, and generate more profit for firm growth (Asadi et al., 2020;Chouaibi et al., 2022;Farza et al., 2021;Lin et al., 2019). This study is focused primarily on the impact of green product innovation on environmental performance and financial performance in the context of manufacturing firms in Vietnam. ...
... Many studies had concluded that green innovation improved enterprise financial performance, but others found no effect or the opposite (Xie et al., 2019; Duque-Grisales et al., 2020; Singh et al., 2020aSingh et al., , 2020bZhang & Ma, 2021). Contrastingly, the majority of studies provided empirical evidence that innovation strategy had a substantial positive impact on organizational advancement and corporate value because it was critical for businesses to encourage business productivity and expand value for the firm and its customers or create a competitive advantage (Lin et al., 2019;Thatrak, 2021;Weng et al., 2015). Additionally, various empirical studies investigating the link between green innovation and environmental performance have been undertaken. ...
... Consequently, the article's conclusions are novel and distinct from those of earlier empirical investigations, particularly those in the context of manufacturing firms in Vietnam. The findings of the study support the notion that green innovation will boost production efficiency, increase a company's competitive edge and value, and have a favorable impact on its financial performance (Asadi et al., 2020;Lin et al., 2019;Porter & Van Der Linde, 1995;Tang et al., 2017). As a result, when businesses embrace green innovation, they will strengthen their brands, increase customer and partner trust in environmentally friendly products or processes, and stimulate consumption. ...
In today’s world, businesses and organizations should behave appropriately for the environment in order to make a contribution to welfare benefits while also gaining business opportunities and economic development. Green practice’s adoption could assist businesses to start saving mineral wealth, and power, avoid environmental damage and even result in the long development of businesses. This study examined the correlation between external environmental factors and green product innovation, as well as the impact of green product innovation on the environmental and financial performance of 400 manufacturing SMEs in Vietnam's primary industrial units. Customer pressure, government pressure, government support, and market changes all had a beneficial effect on green product innovation, according to the findings. Furthermore, this study found a strong positive relationship between green product innovation and environmental and financial performance. Based on the research findings of this research, SME administrators can effectively adapt their business strategies to attain greater financial results and a comparative position in the market while utilizing green initiatives to grow their businesses and preserve the natural environment in a sustainable manner.
... The classic economic literature suggests that radical innovations are a powerful mechanism to challenge the status quo in industries and markets, level up the ground between large and small firms, and have a dramatic impact on competition and the general survival of the firm (Schumpeter, 1934). The sustainability literature broadens this perspective and conceptualizes EI not as a dichotomy (incremental vs. radical) but rather as a spectrum (Aragón-Correa et al., 2008;Hart, 1995), distinguishing between various types of EI based on the novelty of environmental solutions and their degree of impact on society (Lin et al., 2019). ...
... On the eco-efficiency level, organizations focus on increasing the efficiency of production, thus creating more goods and services while decreasing their environmental impact per unit of production as a result of using fewer raw materials and energy. On this level, the aim is to make the existing production systems less destructive through primarily incremental environmental solutions that reduce the firm's costs of managing end-of-pipe mechanisms, increase productivity and efficiency parameters, and parallelly decrease the firm's environmental impact (Lin et al., 2019). While eco-efficient eco-innovations can bring significant positive environmental impact, particularly when implemented on a large scale, it is important to recognize that their impact is limited by a number of factors. ...
... They also face the issue of double externality, when firms struggle to appropriate the value they provide to society due to involuntary knowledge spillovers and consideration of the Environment as a public good (Gonzalez, 2004;Rennings, 2000). Due to the severity of environmental challenges, the prevailing consensus among scientists and political elites is that end-of-pipe and eco-efficiency solutions are not enough, and our society needs to rethink the current ways of production, delivery, and consumption of products and services completely (Lin et al., 2019;Steffen et al., 2018). As a result, organizations face the double challenge of introducing EIs and ensuring their high degrees of novelty and positive environmental impact. ...
The most pressing environmental challenges of our society require radical solutions that would redesign the ways we produce, deliver, and consume goods and services. However, little is known about what actually drives the development of radical eco-innovations. This paper explores the concept of Open Eco-innovation (OEI), an innovation model that leverages external knowledge, resources, and partnerships to enhance internal eco-innovation. Based on the sample of 2 934 Spanish firms from a mixed variety of industries, we demonstrate that an open innovation approach is crucial when firms pursue eco-innovations, particularly when aiming for more radical solutions. Unlike other studies, we show that this importance varies depending on the forms of opening (cooperation vs. sourcing external knowledge), the choice of knowledge partners, and the intended level of eco-innovation radicalness. This paper addresses a gap in understanding the selection of appropriate forms of knowledge sourcing and the choice of knowledge partners for each level of eco-innovation radicalness. Our results also point to a potential mismatch between the importance of open innovation to develop impactful and innovative environmental solutions and a small percentage of organizations adopting this innovation approach.
... This study selects control variables from the micro-enterprise, meso industry, and macro-national levels, drawing on the relevant literature on economic policy uncertainty. At the micro-firm level, the control variables include the following: (1) firm size: firms with substantial assets usually have sufficient capital and social resources for green innovation projects [22]; (2) gearing ratio (lev): firms with higher financial leverage usually exhibit excellent environmental performance [65]; (3) operating income growth rate (growth): firms with better operating income growth prospects typically demonstrate superior environmental performance [66]; (4) equity concentration (top5): higher firm equity concentration is more likely to weaken firms' innovation capabilities [67]; (5) return on assets (Roa): firms with more substantial return on assets are more likely to engage in green innovation activities; (6) board size (Board): a higher proportion of board members helps cultivate CSR [68]; (7) fixed asset investment completion (fixed): the cost of machinery and equipment purchased by firms can usually be deducted from the sales of final products, which can increase the incentives for firms to purchase green equipment [69]; (8) corporate cash flow (Cash): corporate cash flow supports firms' green innovation activities [70]. The industry-level control variable is local government industrial support (gov): with sufficient local government support, firms can obtain more resources for technological innovation [71]. ...
... This study selects control variables from the micro-enterprise, meso industry, and macro-national levels, drawing on the relevant literature on economic policy uncertainty. At the micro-firm level, the control variables include the following: (1) firm size: firms with substantial assets usually have sufficient capital and social resources for green innovation projects [22]; (2) gearing ratio (lev): firms with higher financial leverage usually exhibit excellent environmental performance [65]; ...
Frequent shifts in economic policies not only inject uncertainty into the economic landscape but also pose significant challenges to corporate endeavors in green technological innovation. Drawing on a dataset of Chinese A-share listed companies spanning 2008 to 2020, this research delves into the repercussions of economic policy uncertainty on the green technological pursuits of manufacturing firms and elucidates the underlying dynamics at play. The empirical evidence underscores a marked reluctance among companies to champion green technological innovation in the face of economic policy ambiguity, a stance that holds water even after rigorous robustness checks. Delving into the mechanisms, the study pinpoints heightened financial constraints and a diminishing risk appetite within the managerial ranks as pivotal deterrents steering firms away from green innovation projects amidst such uncertainty. Intriguingly, the adverse interplay between economic policy uncertainty and green innovation is especially accentuated in firms marked by tenuous government–business affiliations, pronounced monopolistic inclinations, lax intellectual property safeguards, minimal pollution footprints, and a skewed labor-to-capital composition. This investigation augments the scholarly discourse on the nexus between economic policy volatility and corporate green innovation, shedding light on strategic imperatives for emerging economies as they chart out future environmental blueprints and cultivate a conducive milieu for green innovation.
... Woon Leong Lin in 2019 also pointed at inconsistent and unclear outcomes of the previous study with respect to relationship between CSR and corporate financial performance (CFP). CSR as a concept still lacks the boundaries, conceptual determinants and expectations of CSR-CFP relationship [17]. ...
... Earnings per share (EPS) is a commonly used measure of the financial performance and profitability of the firm on absolute terms [20]. It has been used to measure financial performance in many previous studies [16][17][18][19][20]. It is defined as the net profit after tax and preference share dividend divided by the number of common outstanding shares. ...
The sceptical attitude towards linking corporate social responsibility (CSR) and corporate financial performance (CFP) forms the basis of this study. The available literature concentrates only on the positive side of CSR activities and benefits derived from them. The Companies Act, 2013, has made it mandatory for Indian companies of a certain turnover and profit to use 2% of their profits from the past three years on CSR activities. Given this background, this study examines the impact of CSR on the financial performance of the business itself. The economic legitimacy of CSR is also probed, that is, does CSR have a positive economic impact? For this examination, the Pearson Fixed effects panel regression analysis was performed on Nifty 50 companies during the period 2010–2018. Data regarding financial performance variables was obtained from Prowess IQ database. The CSR data was collected from the companies’ annual reports and content analysis was done using NVIVO software. The results of the study provide insights into the corporate response to the mandatory requirement of CSR activities and their impact on the company’s financial performance. The results of the study conclude that there is no significant influence of CSR on the financial performance of Indian companies.
... However, if enterprises lack pressure from interest stakeholders such as the government, they will make the strategic decision to forgo green inputs to reduce short-term pressure as well as to save resources needed for current competition [29]. Second, on the premise of the strategic significance of corporate green innovation by default, the focus is on corporate performance [30,31], corporate value [32], and the impact on socioeconomic development [33] arising from corporate green innovation strategies. ...
... Few scholars have studied green innovation strategies from the perspective of strategy implementation process. Second, current research on the effects of implementing green innovation strategies has focused on indirect effects such as corporate financial performance [30,31,36], market performance [37], and social performance [38]. This ignores the direct purpose of enterprises' implementation of green innovation strategies. ...
Innovation is the engine of economic growth, and green innovation can make this growth sustainable. In the context of tightening resource and environmental constraints and the strategic process of innovation-driven growth, green innovation strategy has become the core element and effective driving force for manufacturing enterprises to achieve green transformation and gain sustainable competitive advantage. Firstly, this paper constructs a research framework of “corporate green innovation strategy (CGIS)—green organization identity (GOI)—employees’ green innovation behavior (EGIB)—corporate green innovation performance (CGIP)” based on the natural resource-based view. Second, this paper investigates the impact of CGIS on EGIB and the chain mediating role of GOI and EGIB in this process. The study shows that GIS has a significant positive impact on CGIP. GOI mediates between CGIS and CGIP. EGIB mediates between CGIS and CGIP. GOI and EGIB have a chain mediating role between CGIS and CGIP. This paper analyzes the process mechanism of CGIS on CGIP and provides an intentional reference for manufacturing companies to implement green innovation strategy and improve green innovation performance.
... Meanwhile, Chen et al. (2019) theoretically analyze environmental R&D in a two-echelon supply chain model and conclude that improvement in a firm's performance is mainly determined by its own investment efficiency and technological spillover. Lin et al. (2019) argue that smaller firms engage in more innovation investment and thus generate higher profits. Putri and Soewarno (2020) conclude that Indonesian manufacturers have successfully improved their returns on assets through green innovation investments, whereas Fan et al. (2019) conclude that stricter environmental regulations in China have encouraged environmental efforts but also caused a sharp decline in firms' profits, capital, and labor input. ...
... Following Lin et al. (2019), we consider a firm's employees -the total number of full-time, permanent workers -as an important variable that explains productivity. In addition, following Moretti (2004) and Fleisher et al. (2011), employees' education attainment strongly affects productivity as well. ...
This paper empirically investigates the economic effects of environmental activities. To be specific, it investigates the interactive influence of firms' environmental management and environmental innovation on their productivity. We consider both internal and external environmental management practices of global firms observed from 41 countries between 2017 and 2019. We also consider both inputs and outputs of firms' innovation activities that aim to reduce environmental impacts. Multiple indices are constructed to comprehensively evaluate firms' environmental activities, and productivity is estimated with a semi-parametric method. We find that environmental management and environmental innovation are directly correlated to each other and both substantially promote productivity; however, they tend to substitute each other's positive effects on productivity. Other variables such as globalization, government, labor inputs, and informal competition strongly affect firm productivity too.
... Seen from this standpoint, clean energy innovation is a radical innovation that stems from the ecological modernization approach [54]. Indeed, one of the fundamental tenets of this approach is that technological innovation in clean energy helps improve both corporate environmental performance and financial performance [55]. Wedari et al. [19] recently reviewed the current state of research on the relationship between environment-related innovation, on the one hand, and environmental and economic performance on the other. ...
... Likewise, our results indicate that innovation based on clean and renewable energy technologies, when driven by government environmental policies aimed at reducing corporate value chain emissions (Scope 3 CO 2 e), represents an effective mechanism to help these companies achieve the objective of net zero emissions and increase the profitability of their businesses, since value chain emissions (Scope 3 CO 2 e) represent most of a company's total carbon footprint [90]. According to ecological modernization theory (EMT), this result is consistent with an "eco-innovation" strategy [51,55]. ...
This paper sought to analyze the moderating effect of clean energy innovation on the relationship between corporate carbon footprint and corporate profits in fossil fuel intensive industrial sectors in which it is “hard to abate” CO2e emissions. We used a longitudinal design consisting of a panel study with a structural equation modeling (SEM) method, based on partial least squares. For the analysis of longitudinal moderation, this paper employed a Bayesian multiple-indicator latent growth curve model (B-LGC model). A global sample was used, consisting of 7827 firm-year observations between 2015 and 2021 for 167 international firms. The results showed that the corporate carbon footprint had a very significant impact on corporate profits and that innovations in clean energy—measured as renewable energy consumption—positively moderate the relationship between Scope 3 value chain greenhouse gas emissions (according to the Greenhouse Gas (GHG) Protocol) and the gross profit margin obtained. In addition to the academic contributions made by the moderating effect of clean energy innovation, these findings imply that a more detailed understanding of total value chain emissions (Scope 3 CO2e) among executives and managers at high CO2e-emitting companies offers an effective mechanism for obtaining higher profits and creating competitive advantages, while at the same time achieving a net zero emissions strategy. More importantly, public policymakers will be able to use these results to revise CO2e-related policies, paying closer attention to the Scope 3 CO2e emissions produced by these companies to design regulatory and control mechanisms that stimulate clean energy innovation.
... In this sense, clean energy innovation is a radical innovation that stems from the ecological modernization approach (Ding et al., 2019). Indeed, a fundamental tenet of this approach is that clean energy technological innovation helps improve the corporate environmental performance as well as its financial performance (Lin et al., 2019). Wedari et al. (2023) recently reviewed the current state of research on the relationship between environmental-related innovation, environmental and economic performance. ...
... Likewise, our results indicate that innovation based on clean and on renewable energy technologies, when driven by government environmental policies aimed at reducing emissions from the corporate value chain (Scope 3 CO₂e), represents an effective mechanism for these companies to achieve the objectives of net zero emissions and increasing the profitability of the business, since the emissions of the value chain (Scope 3 CO₂e) represent most of companies' total carbon footprint (Downie & Stubbs, 2012). In this regard, based on the ecological modernization theory (EMT), this result is consistent with an "eco-innovation" strategy (Jänicke, 2008;Lin et al., 2019). This paper makes three main contributions to the literature on business and environmental sustainability. ...
The purpose of this research was to analyze the moderating effect of clean energy innovation on the relationship between corporate carbon footprint and corporate profits in those industrial sectors associated with high demand for fossil fuels in which it is "hard to abate" CO₂e emissions. It used a longitudinal research design, in particular a panel study under a structural equation modeling (SEM) approach, based on partial least squares. For the longitudinal moderation analysis, this research employed the Bayesian method by defining a multiple-indicator latent growth curve model (B-LGC model). A global sample was used consisting of 7,827 firm-year observations between 2015 and 2021 corresponding to 167 international firms. The results revealed a very significant impact of the corporate carbon footprint on corporate profits. Likewise, the results showed that innovations in clean energy, when measured as the consumption of renewable energy, positively moderates the relationship between the greenhouse gas emissions from the value chain associated with Scope 3 of the Greenhouse Gas (GHG) Protocol, and the gross profit margin obtained. Besides the academic contribution represented by the moderating effect of clean energy innovation, these findings imply that a more detailed understanding of the emissions of the entire value chain (Scope 3 CO₂e) by executives and managers of high emitting CO₂e companies represents an effective mechanism to obtain higher profits, create competitive advantages and, at the same time, achieve a net zero emissions strategy. More importantly, public policy makers will be able to use these results to revise CO₂e-related policies paying more attention to the Scope 3 CO₂e emissions produced by these companies, to formulate regulatory and control mechanisms that stimulate clean energy innovation.
... The green dynamic capability has developed into a potent weapon against the debilitating effects of sustainability challenges such as climate change, environmental pollution, and the rapid depletion of natural resources in the global economy (Lin et al. 2021;Latif et al. 2020). Sustainability concerns such as climate change, environmental pollution, and the rapid depletion of natural resources can be substantially mitigated through the application of effective and appropriate green dynamic capabilities (Lin et al. 2019). ...
... When it comes to driving innovative and radical organizations, green innovation is crucial. This is because green firms mitigate the adverse effects of pollution and climate change and benefit society through their green goods, processes, and business strategies (Lin et al. 2019). Green production methods, green resource conservation, and renewable green goods are all ways in which green innovation in companies helps to lessen its adverse effects on the environment. ...
Green dynamic capability is acquiring significant traction among academics, practitioners, and policymakers; however, its relationship to green innovation, climate change, and sustainable development remains unclear. This study aims to identify green innovation within the context of developing nations to cover this void. Utilizing dynamic capability and stakeholder theory, this research illuminated the significance of green dynamic capability for sustainable development. Using a two-wave research methodology, the sample for this study was comprised of organizations from the Pakistani public sector. This investigation compiled data from 342 top and middle-level employees from the ministry of climate change, the ministry of agriculture, and the capital development authority (CDA). Using SEM SMART-PLS-path modeling to test hypotheses and investigate the model’s causal links. Green innovation mediates the positive relationship between green dynamic capabilities and sustainable development, as indicated by the findings. However, neither green dynamic capabilities nor the relationship between green innovation and sustainable development is moderated by climate change. The findings of the study suggest strategies for government organizations to use green innovation in environmental literature. In addition, organizations will collaborate to develop strategies to combat climate change.
... Furthermore, [63] and [1] discovered that green innovation has a high-quality influence on financial performance. In the meantime, [33] and [46] stated that the implementation of green innovation methods impacts competitiveness, corporate profits, and firm viability. From the explanation above, the third hypothesis to be tested is as follows: H3: Green innovation has a positive impact on financial performance ...
... This means that financial performance will increase which is supported by an increase in green innovation within the firm. The results of this study are in line with [33], [63], [1], [46], [59], and [64] which state that the implementation of a green innovation strategy affects competitiveness, firm profits, and firm viability. [64] said for firms that are highly committed to reaching sustainable aggressive benefits in modern-day dynamic surroundings, implementing green innovations can lead to the ability of green to outperform competitors, especially in terms of financial performance. ...
The purpose of this study is to investigate the effect of the publication of carbon emissions, COVID-19, and green innovation on financial overall performance and their impact on firm value. The population utilized here are Indonesian companies registered at the Indonesia Stock Exchange from 2015 to 2021 acquired from forty-eight organizations as a sample using purposive sampling. Path analysis is used as the analysis method. This study found that the publication of carbon emissions had no enormous impact on financial performance, while COVID-19 had a full-size negative impact on financial overall performance and green innovation had a substantial-higher-quality impact on financial performance. Meanwhile, COVID-19 has an extensive negative impact on firm value, financial performance has a substantial effect on firm value, and disclosure of carbon emissions and green innovation has no massive effect on firm value. Similarly, financial performance cannot seriously mediate the effect of carbon emission disclosure on firm value. However, financial performance was capable of noticeably mediating the bad effect of COVID-19 on firm value and the big high effect of green innovation on firm value.
... Using a quantitative model, (Kushwaha et al, 2016) found that green marketing strategy positively affects green supply chain management and subsequently financial performance. (Lin et al, 2019), found that green innovation strategy positively affected corporate financial performance. Furthermore, Green reverse logistics, which are central to green supply chain management, are also utilized by automotive OEMs such as Toyota, Honda, Ford, etc. in an effective manner of waste management. ...
... However, the extent to which different green innovation initiatives may affect these business advantages depends on key mediating factors or variables. (Lin et al, 2019) found, as stated earlier, that corporate financial performance was enhanced by green innovation strategy. Furthermore, they found that firm size was a moderating factor in the correlation between the two factors. ...
In recent years, increasing social, stakeholder, and regulatory pressures have pushed automotive firms to invest in green innovation in an attempt to lower their harmful effects on the environment. They may choose to either put resources into developing green initiatives or further develop their core competencies as a firm. Previous studies find positive correlation between green initiatives: green product innovation, green process innovation, green marketing, and green supply chain management with firm image, sustainable development, and financial performance. The study proposes a model to build a conceptual framework of ideal market and timing conditions when undergoing green innovation as an automotive firm as well as an application and implications of the concepts within the existing market and regulatory environment.
... In numerous research fields, including academic self-efficacy (Yokoyama, 2019), ethical computer self-efficacy (Sahni and Gupta, 2019), and Norwegian principal self-efficacy (Baroudi and Hojeij, 2020), self-efficacy has been conceptualized as a second-order concept; besides that, self-efficacy is varied from each activity or situation. Lin et al. (2019) noted that there would be a bias if the researchers were indifferent to the firm size in their research, affecting various critical business operational tasks. However, advertising intensity has a long-term beneficial effect on the performance of big companies and a detrimental effect on the performance of small ones (Brodny and Tutak, 2022;Xu et al., 2019); as a result, firm size may predict the online advertising services' continuous adoption intention. ...
... Additionally, the firm size is critical in shaping the firm's financial success (Pindado et al., 2010), and is a clear correlation between promotional expenditure and a company's market performance (Younis and Sundarakani, 2019). The economies of scale, or the size benefits of bigger companies, will make advertising comparatively more lucrative (Chauvin and Hirschey, 1993;Lin et al., 2019). Kotler et al. (2021) proved that organizational elements influence B2B buying. ...
Based on the Theory of Planned Behavior (hereafter TPB), this study aimed to empirically examine the influence of attitudes, subjective norms, and perceived behavioral control on companies' online advertising services (OAS) continuous adoption intention. Additionally, the study assessed the impact of self-efficacy, a second-order construct, on perceived behavioral control. Finally, the study attempted to determine the moderating impact of firm size on the relationship between the factors in the TPB model in the OAS context. A semi-structured outline was employed to discuss qualitative research, and data were collected from 1118 businesses in five of Vietnam's most populous cities using a structured questionnaire. The Partial Least Squares Structural Equation Modeling method validated the conceptual research model. The study's results suggest that the company's attitude toward online advertising services, subjective norms, and perceived behavioral control of the organization all affected the willingness to continue utilizing OAS. Furthermore, the research found that self-efficacy positively influenced behavioral control, a reflective notion. Furthermore, the result investigated the impact of business size on the relationship between the intention and attitude toward continued consumption of OAS and perceived behavioral control. Hence, the OAS business should improve the implications related to the TPB model for firms’ continuous adoption intention and evaluate firm size as the critical factor, which moderates the relationship between attitude and perceived behavioral control and continuous intention.
... 6 (Sharma et al., 2010;Lin et al., 2019;Martins et al., 2019;Phillips et al., 2019;Stahl et al., 2020;Yang et al., 2020) Sustainable performance -the assessment of sustainability performance is based on sustainability accounting; -analysis of the relationship between business strategies and financial performance; -implementation of a system for evaluating sustainability performance; -analysis of the influence of big data information on sustainable performance; -analysis of the effects of supply chain operations on the environment; -analysis of the influence of eco-innovations on sustainable performance; -analysis of the balance between sustainable operations, efficient management and the financing perspective; -analysis of the relationship between ethical leadership and sustainable performance; ...
... • reporting on the results of organizational sustainability (Lueg et al., 2019;Yang et al., 2020); • exploiting the internal resources (entrepreneurial orientation, social importance, business planning tools, motivation and leadership style of organization leaders, ethical leadership, etc.) of the organization (Suriyankietkaew & Avery, 2016;Cheah et al., 2019;Dyck et al., 2019;Phillips et al., 2019;Eide et al., 2020;Xu et al., 2020;Dey et al., 2022); • implementing a culture of sustainability in organizations (Abdul Aris et al., 2016); • implementation of ecological strategies in business (Sharma et al., 2010;Gadenne et al., 2012;Lawler & Worley, 2012;Birnik, 2013;Istrate et al., 2017;Lin et al., 2019;Yusoff et al., 2019;Stahl et al., 2020); • adapting accounting to sustainable development (Lamberton, 2005;Gray, 2010;Contrafatto & Burns, 2013;Pavlopoulos et al., 2017;Büyüközkan & Karabulut, 2018;Traxler et al., 2020;Frost & Rooney, 2021;Beusch et al., 2022); • the use of strategic tools (Sustainability Balanced Scorecard, Triple Bottom Line, Sustainability-Oriented Service Innovation, Sustainable Strategic Management, Data Envelopment Analysis) to support the sustainability strategy of organizations (Turan et al., 2008;Turan & Needy, 2013;Journeault, 2016;Calabrese et al., 2018;Barbosa et al., 2020;Martins Scheffer et al., 2021); • focusing on eco-innovation and green technologies (Gadenne et al., 2012;El-Kassar & Singh, 2019;Ch'ng et al., 2021); • implementation of ecological supply chain management (Bastas & Liyanage, 2018El-Kassar & Singh, 2019;Tamayo-Torres et al., 2019;Samad et al., 2021); • transition actions from a human resources management based on financial indicators to a human resources management based equally on economic, environmental and social performance (Gadenne et al., 2012;Merriman et al., 2016;Cho & Ahn, 2018;Wang et al., 2018;Ren & Jackson, 2020;Stahl et al., 2020); • practices to improve the moral and ethical guidelines of employees in the field of sustainable development (Yang et al., 2020;Ab Wahab, 2021;Dey et al., 2022); • inclusion of knowledge management and information systems at the heart of organizational sustainability (Esteves et al., 2012;Martins et al., 2019;Abbas, 2020;Gupta et al., 2020;Yadav et al., 2020;Avery, 2021;Kavalić et al., 2021); • actions to assess sustainability performance (Büyüközkan & Karabulut, 2018;Ramos et al., 2021); • developing relationships and agreements with business partners (Lee & Raschke, 2020). In order to implement sustainable practices, the management of the organization must be able to anticipate changes in the needs of investors, find the necessary resources and achieve the proposed objectives (Todoruț, 2012). ...
Organizational sustainability efforts focus on three main areas: people, profit, and the environment (Elkington, 1998). With an increasing emphasis on sustainable development, economic entities are concerned with achieving long-term performance, the capacity to create value and to meet the needs of interest groups (investors, employees, customers, communities, local development), but also on the development, promotion and implementation of concrete actions for environmental protection. This study aims to identify the current stage of the relationship between sustainable development and financial performance, in order to identify key elements, trends and research gaps. Based on these considerations, we performed a quantitative analysis of a sample of 62 articles from 3 databases (ScienceDirect, Scopus and Web of Science), which we subsequently studied qualitatively.
... Previous research on DT has mainly examined its direct impact on firm performance [28][29][30], lacking insight into the indirect pathways through which DT affects enterprise performance. Green technology innovation is a core factor influencing corporate performance improvement [31,32]. Thus, exploring whether DT enhances renewable energy enterprises' financial performance by promoting green technology innovation is essential for understanding the inherent mechanisms underlying the impact of DT on corporate performance. ...
... Green technology innovation, as an essential part of an enterprise's sustainable growth strategy, improves its ability to respond to the challenges of the natural environment and achieve sustainable development, thus improving its competitiveness and corporate performance [51]. First, green technology innovation can help firms gain more profits through green technology [31,32]. Moreover, by producing green and innovative products to occupy more green market share, firms can gain users' trust to inspire green purchasing behavior, improving their market competitiveness [52]. ...
Digital transformation in renewable energy enterprises offers critical opportunities for China’s green orientation and sustainable growth. Based on a statistical data of Chinese A-share listed renewable energy companies, we explore the effects of digital transformation on a company’s financial performance and the mediating role of green technology innovation. The findings indicate that there is a driving effect of digital transformation on renewable energy companies’ financial performance. Our results remain valid after a series of robustness tests. Furthermore, a heterogeneous analysis indicates that enhancing digital transformation only positively affects the financial performance of state-owned firms and firms in the eastern area, and the driving effect of digital transformation is greater for large firms. In addition, green technology innovation plays a complete mediating role in digital transformation’s impact on renewable energy enterprises’ financial performance. Specifically, when a renewable energy company has digital transformation, it has better green technology innovation leading to better financial performance. Our results provide vital implications for promoting the effectiveness of digital transformation in the development of renewable energy enterprises.
... Endogeneity difficulties in regression models can be caused by a variety of variables, including measurement inaccuracy, simultaneity and reverse causality. Endogeneity can have a major impact on inference and can be removed by using the GMM technique (Lin et al., 2019;Aksoy and Yilmaz, 2023;Ali et al., 2022;Guizani and Abdalkrim, 2023). As a result, the dynamic GMM estimator model was used to study the effect of board diversity on FD. ...
Purpose
The study hypothesized that the impact of board diversity on financial distress (FD) is not direct but rather mediated by the firm’s corporate social responsibility (CSR) activities. Consequently, the purpose of this study is to examine the impact of CSR as a mediator in the board diversity–FD relationship.
Design/methodology/approach
The study examined six board diversity dimensions – age, gender, nationality, education and tenure in 81 nonfinancial Pakistan Stock Exchange (PSX)-listed firms from 2010 to 2021. The CSR engagement of the sample firms is evaluated using a multidimensional financial approach and the likelihood of FD is computed using Altman’s Z -score. The system-generalized method of moments estimator is used to meet the study objectives. In addition, several tests are run to determine the robustness of the study’s findings.
Findings
Based on the procedure for mediation analysis outlined by Baron and Kenny (1986), the authors found that CSR is significantly inversely associated with the likelihood of FD. Second, board diversity variables age, gender and national diversity were positively associated with CSR. Third, board age, gender and national diversity are significantly inversely related to FD. Finally, it was found that there is partial mediation between board age diversity and FD, whereas full mediation is shown between board age diversity and FD and between board nationality diversity and FD.
Practical implications
This study provides practical insights into PSX’s board diversity for companies, regulators and policymakers.
Originality/value
This research studies the connection between board diversity and FD. In addition, the current study extended the analysis by testing for the first time the mediating role of CSR in the diversity–distress relationship, particularly in the context of an emerging economy.
... Brem and Ivens (2013) explain how frugal and reverse innovation can contribute to improvements of sustainability performance and describe a positive link between the three dimensions of sustainability management. Lin et al. (2019) analyze green innovation strategy (GIS) concept and correlated it with corporate financial performance (CFP) where they found a dynamic correlation between the GIS and the CFP with regards to the firm size with data collected from 163 international automotive firms. Yumashev and Mikhaylov (2020) contribute to the field of material science by developing a polymer film coating which can lead to the creation of more durable and long-lasting products in various industries such as automotive, aerospace, and manufacturing for companies to be able to operate more efficient and save time and money. ...
This study aims to develop a framework that helps organizations to fulfill their environmental and social responsibility amid constraints in selecting which stakeholders’ interest comes first and the essential to have an evolved strategic planning that can accommodate broader systemic planning and practice that will yield authenticity in business sustainability with components of environmental worldview of its leaders and organizational learning in the framework. This research uses the method of literature review with the data from interviews and content analysis of the report from one organization that has successfully implemented social and environmentally friendly practices. Based on an in-depth review of literatures on worldview, organizational learning, and strategic planning, and with empirical study from one organization, a conceptual framework by combination of the existing concepts is produced to enable an integration of theories in a range of possible actions for organizations to achieve sustainable development. The result from this research’s framework will allow further study to be carried out in the future to verify associations between existing concepts or variables within the framework, and to produce next empirical results in supporting those theories being reviewed in this paper.
... By relating the findings of the current study with existing literature, the study by Ozcan et al. (2017) found that the size of the business, which was measured through the sale, the firm's assets and the number of individuals working create a positive influence on the firm profitability which was measured through the operating assets return. Considering that, Lin et al. (2019) mentioned that larger businesses generally gain the benefits of economies of scale, which allows them to lower costs as a result of their size. Their fixed expenses can be distributed across a greater volume of output or consumer base, resulting in reduced average costs for each unit and perhaps increased profitability. ...
Working capital management is critical to an organization's financial health and long-term performance. The relationship between working capital management and firm performance is uncertain, and research on firm size's moderating effect is scarce. The study investigates the impact of Working capital management (WCM) on firm performance and examines how the firm size moderates this relationship. Firms must efficiently manage working capital to stay financially stable and profitable. WCM procedures affect performance differently depending on the firm size. The research is conducted using the quantitative research design. For this research, we have gathered data from the annual reports of the firms belonging to the KMI-30 index listed at the Pakistan Stock Exchange. The period considered as the research sample is from 2012 to 2022, as it can provide a better analysis of different financial crises and long-term analysis. The quantile regression was used to evaluate the research objective since the data has the issue of heteroscedasticity and autocorrelation. We found that working capital significantly and positively influences the firm performance. However, the moderating role of firm size was found to be insignificant. The findings reveal that firms of all sizes should concentrate on ensuring good working capital management strategies to increase their performance. This requires monitoring and optimizing inventory, accounts receivable, and accounts payable while assuring sufficient liquidity to satisfy operating needs.
... At the company level, different Financial characteristics were added as control factors following previous research (Ezeani et al., 2022;Öztekin, 2015). We adjusted for firm size since smaller and younger enterprises are more likely than their larger counterparts to seek diversity and visibility via CSR efforts (Lin et al., 2019); however, they are more likely to face budgetary constraints. In order to account for the impact on capital structure decisions, we also consider firm performance through return on assets (ROA) (Berger & Di Patti, 2006), as well as financial flexibility (Zscore) and net operating assets (NOA). ...
This study uncovers the relationship of company’s Environmental, Social, and Governance (ESG) performance and capital structure in Chinese corporate sector. Additionally, we investigated if audit quality intervenes this ESG—capital structure nexus. Using panel regressions with fixed effects, we chose Chinese A-Listed companies giving 6295 firm-year observations from 2010 to 2019. The results support the legitimacy theory, suggesting that a company's ESG disclosure and overall progress is a crucial factor in determining their financing decisions. The results suggest that firms with better ESG performance found to have less debt financing and easier access to equity capital from stock markets. However, the results did not show a significant impact of audit quality on this relationship. Sensitivity tests, such as alternate parameter estimation measures, techniques to address endogeneity issues (sysGMM), and lagged regressions, were conducted and did not change the key conclusions of the study.
... This result implies that larger firms are so reluctant about improving performance. This is consistent with Lin et al. (2019) who found a negative relationship between the size and performance. On the other hand, the result of leverage reveals a positive but insignificant relationship with financial performance (β -0.003, P < 0.956), which suggests that high leverage is not likely to improve financial performance of deposit money banks firms in Nigeria. ...
This paper examines the effect of dividend policy on financial performance of listed deposit money banks in Nigeria. The data were collected from seven listed money deposit banks for a period of seven years from 2015 to 2021. The result indicates that dividend per share significantly and positively influenced the financial performance of listed deposit money banks in Nigeria. it also showed that firm size is negative and significantly related with firm financial performances. This result implies that larger firms are so reluctant about improving performance. On the other hand, the result of leverage reveals a positive significant relationship with financial performance. Thus, this finding is important to shareholders and potentials investors.
... Even though green innovation practices are often considered to be applicable only to large-scale businesses, they can also significantly increase the profitability of small ones. In fact, the limited number of studies that have focused on small-scale businesses and green innovation have proved that effective green innovation practices by small-scale businesses bring higher profitability when compared with large-scale ones (Lin et al. 2019). In addition, it has been stated that the effectiveness of green innovation practices depends on the characteristics of the businesses rather than their size (Wysocki 2021). ...
... The economic literature increasingly discovers the dierences between these groups of companies. For instance, articles nd dierences in job creation, organisational structure and human resource management (Haltiwanger et al. (2018), Banerjee & Jesenko (2016), Decker et al. (2014), Haltiwanger (2012), Agell (2004), Haltiwanger et al. (1999), Davis et al. (1996)), innovation and innovative pressure (Fang et al. (2021), Vaona & Pianta (2007), Audretsch (2002), Arvanitis (1997)), and corporate nance (Hashmi et al. (2020), Lin et al. (2019)). Being of particular interest, rm size also inuences rm performance such as productivity and protability (e.g. ...
Although a conventional wisdom claims that larger rms perform better than smaller ones, the conclusions drawn in the literature are ambiguous. This study examines the eect of rm size on productivity, using a dataset on European electricity generators from 2012 to 2020. European electricity generation sectors are particularly interesting given the substantial liberalisations in the past decades and strong and subsidisation of generating electricity from renewables. Next to estimating productivity of electricity generators and establishing a link between rm size and performance in this industry, this study adds to the literature by includes both, developed and developing countries, instead of solely focusing on one group of countries. The overall results highlight that rm size signicantly boosts rm performance. Eects, however, diminish across size. Last, the responses of technical eciency vary across countries, regulation regimes, and access to nancial markets. JEL: L25, L51, L94, O12
... One important firm-level characteristic that heavily affects its environmental activism is the size of the firm. Small and large firms substantially differ in their strategic motivation, management practices, and access to resources (Lin et al. 2019), resulting in huge differences in their environmental activities and obtained financial results (Andries and Stephan 2019). ...
This paper studies the relationship between environmental innovations and firms’ financial performance from the perspective of environmental activism intensity. We explore how the number of green patents affects the financial performance of small, medium, and large firms and whether the growing number of green patents positively affects firms’ financial performance. We employed a panel data sample of 1136 green innovative and 2395 non-green innovative firms from the USA and Europe and compared their financial results. The results show that small firms benefit financially only in the second year after the first green patent implementation. Medium-sized firms enjoy improved financial performance in the first two years after the implementation of one or two green patents; however, the third green patent does not anyhow improve the financial performance. Large firms gain financial benefits every year after issuing green patents regardless of the patents’ quantity. Generally, the increase in financial performance is moderate in the first year, reaches the maximum in the second year, and becomes statistically insignificant in the third year after the last green patent’s implementation.
... First of all, in 1912, Schumpeter proposed that the innovation advantages of larger enterprises were more prominent, which was the first time that the relationship between enterprise size and innovation was mentioned in the "Schumpeter hypothesis". Additionally, from the previous research, large-scale enterprises are in a favorable position [50][51][52]. In terms of their visualization degree and market control power, it is easy for them to generate resource benefits and improve market benefits, and they have the ability to carry out innovative activities in many fields [53]. ...
In the era of the digital economy, with the digital and intelligent transformation of the industry, technical complexity, and higher demand for the inter-operability of Industrial Internet platforms, standardization work faces challenges of timeliness and high quality. So, enterprises must improve the quality and efficiency of their digital innovation capabilities in the dynamic process of Industrial Internet standardization. Given this condition, based on the digital innovation theory, standardization theory, and social network theory, this paper takes 387 A-share-listed enterprises in the field of Industrial Internet industry as the research object and uses the secondhand cross-sectional data to carry out the research on the influence mechanism of enterprise Industrial Internet standardization on the digital innovation capabilities of enterprises. The results show that: enterprise Industrial Internet standardization exerts a positive influence on the digital innovation capability of enterprises; a standard alliance network in the enterprise Industrial Internet standardization plays an intermediary role in the digital innovation capability of enterprises; and the scale of enterprises has a positive moderating effect on the intermediary role of a standard alliance network between the enterprise Industrial Internet standardization and the digital innovation capability of enterprises. From the perspective of the alliance network effect, the research explores the economic consequences of standardization construction and enriches the appraisal of the standardization capability of enterprises for the purpose of providing targeted empirical evidence and practical strategies for the standard-based digital innovation of Industrial Internet enterprises.
... In this 21st century it has become essential and necessity for businesses to look into the betterment of the environment in order to stay in the running in the competitive world. This allows organisations to boost their productivity and profitability simultaneously as this helps businesses to improve brand image to a great extent [3]. Greater market image of the companies helps the brands to maintain their competitiveness and their brand reputation. ...
Establishment of sustainability is essential for the companies as this allows the business to stay competitive in the global market. In order to maintain the sustainable business firms utilises alternative energy sources that in turn assists organisations to improve their reputation on the marketplace and generate greater revenue. With the implementation of green technologies business successfully achieves competitiveness as these results in more productive supply chain. Productivity of the workers improves to a great extent with the establishment of the sustainable businesses. Utilisation of alternative energy sources helps the companies to cut down their excess operational cost and as a consequences firm’s upgrades their economic growth. This also helps the companies to minimise operation cost and make more profitable business. On the other hand, this allows the companies to stay in the running in the competitive business with the support of all stakeholders. Efficacy of the supply chain and logistic and grater performance of the companies are the consequence of the establishment of sustainable business and this in turn helps the companies to conserve the natural resources for future consumption. Keyword : Productivity, revenue, supply chain, and sustainability.
... While sustainability issues, such as climate change, environmental pollution, and the sharp depletion of natural resources create problems for world economies, green dynamic capability has emerged as an effective tool against their debilitating effects [6,12]. Appropriate and effective green dynamic capability not only improves environmental performance but also has enormous potential to reduce sustainability issues like climate change, environmental pollution, and the sharp depletion of natural resources [13]. ...
Though the concept of green dynamic capability has been increasingly gaining traction among academics, practitioners, and policymakers, its association with green innovation adoption remains unclear. The present study addresses this gap and aims to provide clarity by distinguishing green innovation adoption in the context of developing countries. Drawing on dynamic capability and stakeholder theory, this research shed light on the significance of green dynamic capability for green innovation adoption. Additionally, this study examines the moderating role of environmental dynamism and big data analytics capability in the link between green dynamic capability and green innovation adoption. Adopting a two-wave research design, the sample for this study contained SMEs from Pakistan and Malaysia. Data was obtained from 220 SMEs (105 from Pakistan, 115 from Malaysia). To test the hypotheses, covariance-based structural equation modelling was performed to analyze causal relationships in the model, by using AMOS 23 software. The results showed that green dynamic capability positively impacts green innovation adoption, but environmental dynamism does not positively moderate between green dynamic capability and green innovation adoption. In addition, big data analytics capability positively moderates between green dynamic capability and green innovation adoption. We believe that this study opens a new avenue in the environmental literature under which green innovation adoption is useful for SMEs.
... Even though green innovation practices are often considered to be applicable only to large-scale businesses, they can also significantly increase the profitability of small ones. In fact, the limited number of studies that have focused on small-scale businesses and green innovation have proved that effective green innovation practices by small-scale businesses bring higher profitability when compared with large-scale ones (Lin et al. 2019). In addition, it has been stated that the effectiveness of green innovation practices depends on the characteristics of the businesses rather than their size (Wysocki 2021). ...
Green innovation is critical for SMEs, which account for a significant part of employment and total value in many countries. The role of the leader in SMEs is one of the most discussed issues in the field of management and innovation. In this study, the role of ethical leadership and green organizational culture on green innovation was investigated in the context of Turkey with a cross-sectional research study covering 464 SMEs and using structural equation modelling. According to the findings, it was seen that ethical leadership has an important potential in terms of developing a green organizational culture in SMEs. In addition, it has been determined that green organizational culture has a mediating role between ethical leadership and green product and process innovations. As a result, suggestions are given to researchers and managers in the context of leadership and organizational culture in order to create green innovation and a sustainable work environment.
... With their newfound ability to absorb information value, companies therefore have the opportunity to reap significant benefits from their green innovation activities by filtering and applying it for powerful commercial purposes. Lin et al. (2019) argue that igreen iinnovation has a positive impact on firms' financiali performance. By implementing igreen innovationi activities, the company's financial performance is improved, its reputation as a company is enhanced, and social responsibility is more emphasized. ...
In the face of pandemics like COVID-19 today, environmental issues such as green innovation become very important, because companies with high levels of social and environmental awareness indicate that the companies are more resilient. This study aims to analyze the impact of COVID-19 and green innovation on financial performance. This study uses the Vector Error Correction Model (VECM) as a data analysis method and uses purposive sampling to get 48 samples with 336 observations. The results of this study indicate that COVID-19 has a significant negative impact on financial performance in the long and short term, managers ought to take note of the converting surroundings outside and adjust their commercial enterprise strategies in time. Meanwhile green innovation has a positive impact on financial performance in the long and short term. The implementation of green innovation activities affected the competitiveness and ?rm pro?ts. Keywords: COVID-19; Green Innovation; Financial Performance; VECM
... The incentive effect of preferential policies such as green credit is also more pronounced in state-owned firms (Yu et al., 2021). In terms of scale, Lin et al. (2019) found that small firms are inclined to undertake projects with higher ROI and shorter payback periods, mainly because it is challenging for them to bear the unknown risks of long-term projects. In terms of life cycle, the research of Xue and Zhang (2022) showed that because mature firms have greater strength and risk-taking ability, they make better use of policy incentives to realize GTI. ...
In the context of green development and the construction of ecological civilization, a key issue for governments is how to promote firms’ green technology innovation. Assuming the bounded rationality of decision-makers, this paper constructs a game model of green technology innovation between firms and the government based on prospect theory. It dynamically analyzes the decision process and optimal strategy under different scenarios and uses numerical simulation to identify the influencing factors. There are three main findings. (1) Firms’ green technology innovation decisions depend on the net income difference between strategies. Environmental regulation encourages firms to carry out green technology innovation by increasing the environmental costs to non-green technology innovation firms and increasing the income of green technology innovation firms. (2) Uncertainty and the behavioral characteristics of managers significantly affect green technology innovation. Firms’ green technology innovation is positively correlated with the success rate of green technology innovation, whereas is negatively correlated with perceived value sensitivity and loss aversion. (3) There is instrumental heterogeneity in the incentive effect of environmental regulation on firms’ green technology innovation. The most effective tool is comprehensive environmental regulation, followed by punishment and then subsidy. The research provides a reference for governments to formulate environmental regulations and firms to manage innovation.
... The increasing environmental awareness of consumers positively affects market demand for environmentally-friendly products and encourages firms to improve their green innovation performance (Huang et al., 2016) by modifying their manufacturing processes (Lin et al., 2014). GPI helps businesses modify their manufacturing processes to produce environmentally-friendly products and reduce environmental pollution (Lin et al., 2019). Enhanced GPI also encourages firms to set more stringent environmental targets, such as energy-saving in production processes (Tsai, 2009). ...
This study reviews the role of top management commitment in realizing sustainability goals in interfirm and supply chain relationships. Next, the study employs the resource-based view of the firm to implicate top management commitment as a moderator of influences of green innovation practices on customer cooperation. Using survey design methodology, we collected data from different 181 ISO 14001 certified Turkish manufacturing firms. We tested the proposed hypotheses by using the hierarchical multivariate regression approach. The direct effect of top management commitment on green process innovation is significant, while its effect on green managerial innovation is insignificant. However, the results show that manufacturer-customer relationships support top management commitment as a positive moderator of the relationship between green innovation practices and customer cooperation. Our results underscore the vital role played by top management in the firm’s efforts to accomplish sustainability objectives and enhance interfirm cooperation. Further, the study contributes to the literature by revising the available literature on the different roles of top management commitment in green supply chains and business relationships.
... As a result, the negative effect of production and manufacturing on the ecosystem is minimized (Fernando et al., 2019). Green strategies help firms compete in the market by reducing the company's environmental effects, preventing pollution (Ahmad et al., 2020) and enabling cost savings through material reuse and recycling (Lin et al., 2019). It is considered a critical antecedent for increasing the firm's operational and financial performance (Syafri et al., 2021), ensuring eco-friendly products, enhancing organizational competitiveness by capitalizing upon advanced technology (Fernando et al., 2019) and addressing environmental issues. ...
Purpose
Based on the sharp decline in the quantity and quality of natural resources, many organizations are shifting their operations to an eco-friendly system. However, this objective cannot be achieved without capitalizing on green knowledge and innovation. The purpose of this study is to examine whether green knowledge management (GKM) strengthens organizational green innovation capabilities, leading to green performance. Moreover, considering culture as the buffering condition, the authors took it as the conditional boundary between GKM and green innovation and investigated if it impacts their relationship.
Design/methodology/approach
The authors focused on the manufacturing and services firms’ managerial and non-managerial staff and collected data following the non-probability convenience sampling technique. The collected data were examined through structural equation modeling.
Findings
It is found that GKM is a significant positive predictor of organizational green innovation and green performance and strengthens their abilities in these areas. However, green innovation partially mediates between GKM and corporate green performance. It is also found that green culture strengthens the relationship between GKM and organizational green innovation.
Originality/value
This study’s findings provide confidence to organizational managers and related stakeholders to achieve sustainability goals by capitalizing on GKM and promoting green culture in their setup. This study is also among the pioneer studies investigating GKM as a unified system and linking it with environmental performance domains.
Eco‐innovation strategies are essential elements for companies developing core competencies in the circular economy model. The academic world has begun to study the knowledge of these business decisions, and there is incipient literature on the subject. In this context, this paper aims to contribute to the current knowledge on the impact of eco‐innovation strategies on corporate performance by exposing and synthesizing the distinct positions found in the literature. For this purpose, a systematic and bibliometric review of 81 articles related to the economic impact of eco‐innovation on firm performance, as well as the barriers and drivers of these strategies, was carried out. After analyzing the several types of eco‐innovation, our results show that although previous empirical evidence suggests the existence of a positive effect, it is not generalizable due to the existence of several factors that may condition the impact of eco‐innovation on corporate performance and its implementation. This study delves into the current academic literature on eco‐innovation and firm performance, determining that both size and the environment in which a company is framed constitute a series of conditioning factors that may clarify why there is no consensus in the academic literature in this regard. In addition, this work encourages future lines of research with the aim of shedding light on this field of knowledge.
This study addresses an existing research gap on individual green competences (GC) and their application in business settings, and discusses the concept GC in the context of a firm's organizational sustainability (OS). Namely, the study aims to examine the importance of organization members' (managers' and employees') GC for advancing a firm's OS. The theoretical grounding is exemplified by the empirical study based on individual interviews with managers. Study results explain how managers understand GC and how they see GC's role in enhancing companies' OS, as well as what are crucial barriers encountered in this process. The results show that GC, from a managerial perspective, are seen through the lens of people's pro‐environmental awareness and knowledge followed by behaviors related to environmental protection. They indicate the economic, environmental, and social benefits of GC development, required for a firm's competitive advantage. The research contributes to the studies on GC being a significant antecedent of achieving the desired business results in terms of OS.
Purpose
This paper aims to explore how the three components of intellectual capital (IC) (human, structural and relational) are related to corporate innovation and how effective knowledge management can improve business performance, innovation and environmental compliance. Additionally, the study investigates the influence of environmental compliance on overall business performance.
Design/methodology/approach
The organizational resource-based view was used to develop a theoretical model and accompanying hypotheses. A survey design approach was used to collect data and evaluate the model. The predicted relationships were tested by structural equation modeling using data acquired from members of management teams in the Vietnamese manufacturing sector.
Findings
The three components of IC have significant positive effects on business performance. In addition, corporate innovation, knowledge management success (KMS) and environmental compliance all significantly increase business performance. Moreover, KMS indirectly enhances business performance through innovation and environmental compliance.
Research limitations/implications
This study provides useful insights into knowledge management, innovation and environmental compliance for administrators, practitioners and scholars. The results support practical advice for how firms can integrate KMS strategies into their operations, improve environmental compliance and increase business success.
Originality/value
The links between IC, knowledge management, innovation and environmental compliance are of ongoing interest to organizational scholars. However, empirical research on the relationships of these factors with business performance has been limited. This study investigates these links and offers factual evidence for them.
The purpose of this study is to contribute to the existing body of research on the impact of Corporate Social Responsibility (CSR) on Firm Performance (FP). The study employs a longitudinal panel data sample of 132 automotive companies, using a dynamic Generalized Method of Moments model. The analysis examines the relationship between CSR ratings and yearly financial performance, taking into account various control variables. The results of the analysis suggest that there is a non-linear, U-shaped relationship between CSR and FP. The direction of this relationship (positive or negative) is dependent on the level of CSR engagement. This means that CSR activities do not immediately yield benefits, but instead provide advantages once a certain level of CSR has been reached. The study also finds that the impact of CSR on FP is positively moderated by technological innovation. This indicates that firms with higher levels of investment in technology benefit more from CSR activities in terms of their financial performance.
Nowadays, sustainable development has been underlined as critical in relation to firm performance and is becoming a global concern. Green innovation is believed to be a fundamental approach to environmental protection and determines the firms' competitiveness. Many factors drive the success of adopting green innovation. Unfortunately, many studies generally focus on large industries. This study investigates the influence of the firms' external pressure and internal factors simultaneously on the adoption of green innovation in small enterprises in developing countries. We conceptualized the four factors that may determine the successful implementation of green innovation to achieve sustainable performance, including environmental regulations, customer pressure, resources and capabilities, and management commitment. Data were gathered from 160 food sector SMEs in Malang Raya, Indonesia. Data analysis used structural equation modeling with the partial least squares approach (SEM‐PLS). The empirical results conclude the positive effects of customer pressure, resources and capabilities, and commitment management on green innovation, which in turn had a positive on sustainable performance. The results also confirmed that environmental regulations did not significantly impact green innovation. The findings provide valuable contributions and encourage SMEs to foster green innovation's potential for better sustainable performance and competitive advantage. The findings also offer integrated perspectives on how firms should be more innovative toward sustainability.
Despite the growing demand for corporate environmental, social, and governance (ESG) engagement in response to the global complex crisis, the impacts of ESG activities and market environment on firm performance have not been sufficiently investigated. This study aims to explore how ESG activities affect firm performance and how the competitive market environment moderates this relationship. The panel data regression analysis was performed to investigate the relationship between the ESG performance and firm performance (specifically, market capitalization as a measure of market‐based firm performance and profit margin and return on assets as measures of account‐based firm performance) with the data of 2115 listed companies from 53 countries over the past 5 years (2017–2021). The analysis results showed a U‐shaped relation between ESG performance and market capitalization, and a positive linear relationship was observed between ESG performance and profit margin or return on assets. Importantly, it was found that these relationships are negatively moderated by the competition (number of competitors) in the market. It can be interpreted that the greater the number of competitors in the market, the weaker the effect of ESG performance on firm performance. This study discusses plausible reasons for these observations and managerial and policy implications drawn from the results. This study not only analyzes the relationship between ESG performance and various aspects of firm performance at the global level, but also accumulates new evidence for the moderating effect of market competition.
E-commerce is a disruptive technology that started as a replacement for information and has now evolved to include buying and selling goods. Family businesses are commercial enterprises in which decisions are impacted by older generations of a family who are related by blood, marriage, or adoption and who can influence the company's vision and willingness to pursue various goals. Family businesses have distinct priorities and outcomes because they were not established or managed like traditional commercial organizations. Family enterprises typically have a strong cultural orientation as contrasted to any other type of commercial firm's growth orientation. Decision-making is influenced by the expertise and knowledge of older generations. Therefore, we decided to identify the variable that influences family businesses' intentions to use and actual usage of e-commerce technologies, especially in India. A UTAUT model approach is used which included eight adoption-related theories. The variable perceived trust is added to the model because it has a direct effect on purchase intention.
Firms, especially heavy-polluting firms, are facing intense pressure from informal environmental regulations, which play a unique role in promoting heavy-polluting firms’ green technology innovation (GTI). Communities and ENGOs are two important informal environmental regulation entities that have different influence mechanisms to stimulate heavy-polluting firms in GTI. The research results indicate that heavy-polluting firms’ GTI follows an inverted U-shape as the number of communities around these firms increases, whereas it follows a positive linear correlation as the number of ENGOs increases. Interestingly, ownership types and administrative hierarchy distance positively moderate the curvilinear and linear relationships. State-owned enterprises (SOEs) are more inclined to maintain their legitimacy by fulfilling communities’ and ENGOs’ environmental requirements than non-SOEs. A shorter administrative hierarchy distance means that firms are supervised by high-level governments. The autonomy effect of lower-level governments does not affect the vigorous enforcement of environmental policies, which also enhances these two relationships.
Purpose
This study aims to investigate the impact of corporate social responsibility (CSR) on the financial distress (FD) of firms listed on the Pakistan Stock Exchange (PSX). Furthermore, the moderating effect of corporate governance (CG) on the CSR–distress relationship is investigated in this study.
Design/methodology/approach
The final sample of the study includes 117 companies from 2008 to 2021. The sample firms' CSR engagement is assessed using a multidimensional financial approach, and the likelihood of FD is determined using Altman's Z-score. The governance level is measured using the governance index, which includes 29 governance provisions. To achieve the research objectives, the system generalized method of moments estimator is used. Furthermore, several tests are performed to assess the robustness of the study's findings. The analysis was carried out using STATA software version 15.
Findings
The authors find that CSR is significantly inversely related to FD. The governance mechanism was discovered to be inversely related to FD. Furthermore, corporate governance strengthens the negative relationship between CSR and FD. In addition, the authors find that CSR is significantly inversely related to FD in firms with strong CG mechanisms but has no effect on FD in firms with weak CG mechanisms.
Practical implications
The findings of this study provide policymakers, business managers, regulators and investors with a better understanding of the relationship between the quality of CSR investments and the likelihood of FD in Pakistani firms, as well as the role of CG in this context.
Originality/value
This study contributes to our understanding of the role of CG in the CSR-distress relationship in an emerging market. This suggests that policymakers should prioritize CG quality while anticipating the impact of CSR on corporate FD.
Although green innovation strategy (GIS) is the driving force for the sustainable development of enterprises, while the strategy is implemented, an increased cost and a change in organizational routines will cause an organization to become fragile, and even affect the sustainable competitive advantages. So, the purpose of this paper is to explore the impact path of GIS on sustainable competitive advantages and the implementation boundary of GIS. To explain the impact path, we consider the concept of dynamic capabilities to be the mediator variable. To explain the implementation boundary of GIS, we systematically explore the relationships among GIS, dynamic capabilities and sustainable competitive advantages under different levels of environmental uncertainty. Based on 241 new Chinese green firms, the empirical results find that GIS helps enterprises to gain sustainable competitive advantages. However, in the process of strategy implementation, enterprises should choose appropriate methods according to different degrees of environmental uncertainty. In a low environmental uncertainty, dynamic capabilities play a full intermediary role between GIS and sustainable competitive advantages. However, in a high environmental uncertainty, dynamic capabilities have no mediating effect between GIS and sustainable competitive advantages. This study not only integrates green management theory and strategic management theory but also makes up for the deficiencies in research on these theories and has important reference value for enterprises that seek to carry out green innovation activities.
Despite the rising interest in environmental strategies, few studies have examined how managerial cognition of such strategies influences actual innovation capability development. Taking a managerial cognition perspective, this study investigates how managers’ perceptions of institutional pressures relate to their focus on proactive environmental strategy, which in turn affects firms’ realized innovation capability. The findings from a primary survey and three secondary datasets of publicly listed companies in China reveal that managers’ perceived business and social pressures are positively associated with their focus on proactive environmental strategy, which consequently fosters innovation capability development. Moreover, state ownership and government administrative control weaken the impact of managerial focus on proactive environmental strategy on innovation capability. These findings have important implications for how managerial cognition supports environmental strategy and organizational capability building under the influence of institutional pressures and government intervention.
This study aims to analyse the scientific literature on sustainability and innovation in the automotive sector in the last 13 years. The research is classified as descriptive and exploratory. The process presented 31 articles in line with the research topic in the Scopus database. The bibliometric analysis identified the most relevant articles, authors, keywords, countries, research centers and journals for the subject from 2004 to 2016 in the Industrial Engineering domain. We concluded, through the systemic analysis, that the automotive sector is well structured on the issue of sustainability and process innovation. Innovations in the sector are of the incremental process type, due to the lower risk, lower costs and less complexity. However, the literature also points out that radical innovations are needed in order to fit the prevailing environmental standards. The selected studies show that environmental practices employed in the automotive sector are: the minimization of greenhouse gas emissions, life-cycle assessment, cleaner production, reverse logistics and eco-innovation. Thus, it displays the need for empirical studies in automotive companies on the environmental practices employed and how these practices impact innovation.
Although the same environmental regulations apply to all regions in China, legal enforcement can be different due to local economic development priorities. There is still a lack of knowledge about how regional disparities affect the operating performance results of the implementation of corporate environmental management practices, thus providing little information for foreign companies when they invest and develop their production base in China. To fill this research gap, this paper collects data from the Fortune 500 Chinese firms to investigate the moderating role of regional disparities in affecting the performance results of corporate environmental management efforts based on the institutional theory. The disclosed corporate environmental responsibility (CER) practices serve as proxy to represent corporate environmental management practices. Content analysis approach was applied to collect and analyze CER practices published in the corporate reports of Chinese manufacturers. The results show that CER has a positive impact on operating income, while regional disparities influence the relationship between CER and corporate operating income. Specifically, CER and operating income are positively related in Eastern China; on the contrary, they are negatively related in Western China. This paper adds to the body of knowledge about environmental discrepancies in the same emerging economy, and provides insights for systematic consideration in terms of the issues of government environmental regulations and corporate environmental strategies.
This study investigates the relationship between political connections and corporate environmental performance, and examines the role of government green subsidies on this relationship within the current Chinese context. Using data from publicly traded private manufacturing firms, empirical results show that politically connected firms are significantly more likely to obtain green subsidies than non-connected firms. Assisted by green subsidies, firms with political connections show better environmental performance than those without. Our findings reveal the mechanism by which corporate political connections influence environmental performance.
In this study, we examine whether corporate environmental responsibility (CER) plays a role in enhancing operating performance in the financial services sector. Because achieving success with CER investing is often a long-term process, we maintain that by effectively investing in CER, executives can decrease their firms’ environmental costs, thereby enhancing operating performance. By employing a unique environmental dataset covering 29 countries, we find that the reducing of environmental costs takes at least 1 or 2 years before enhancing return on assets. We also find that reducing environmental costs has a more immediate and substantial effect on the performance of financial services firms in well-developed financial markets than in less-developed financial markets. These results are economically and statistically significant and robust even after alleviating endogeneity and using an additional performance measure. We interpret our empirical results as supporting the social impact and reputation-building hypothesis. Our findings also suggest that policy makers dealing with corporate sustainability management should pursue an environment-centered industry policy not only at the manufacturing sector but also at the financial services sector, as firms in both sectors with lower environmental costs perform better.
We integrate perspectives from the literature on contingency, dynamic capabilities, and the natural resource-based view of the firm to propose how dimensions of the general competitive environment of a business will influence the development of a dynamic, proactive corporate strategy for managing the business-natural environment interface. We also explain how certain characteristics of the general business environment-uncertainty, complexity, and munificence-moderate the relationship between the dynamic capability of a proactive environmental strategy and competitive advantage. We conclude with a discussion of implications for research and practice.
The organizational literature has often acknowledged that under certain conditions, corporations should limit the information that employees receive and how they interact to improve corporate financial performance. The present article criticizes the logic of such corporate restrictions. Data obtained from 164 pharmaceutical firms operating in 27 different countries support the positive implications of inclusive and collaborative human resources practices. Our results reveal positive and significant relationships between the practices of information sharing with employees and promoting employee collaboration and the development of a proactive natural environmental strategy for a firm. In addition, this research tests the moderating role of general environment uncertainty in these relationships. Contrary to expectations based on contingency theory, uncertainty does not appear to moderate these results for the sampled firms.
Multiplicative interaction models are common in the quantitative political science literature. This is so for good reason.
Institutional arguments frequently imply that the relationship between political inputs and outcomes varies depending on the
institutional context. Models of strategic interaction typically produce conditional hypotheses as well. Although conditional
hypotheses are ubiquitous in political science and multiplicative interaction models have been found to capture their intuition
quite well, a survey of the top three political science journals from 1998 to 2002 suggests that the execution of these models
is often flawed and inferential errors are common. We believe that considerable progress in our understanding of the political
world can occur if scholars follow the simple checklist of dos and don'ts for using multiplicative interaction models presented
in this article. Only 10% of the articles in our survey followed the checklist.
This paper explores the links between management and non-management attitudes to the environment and organizational responses within SMEs. It identifies the scope for, and means by which, personal attitudes can be harnessed to motivate, activate and help operationalize business responses.The paper identifies strong personal attitudes about the environment. In some more proactive companies it identifies some of the elements of organizational learning which may assist in translating attitudes into effective behaviour-including supportive management structures, training and two-way communication. However, it also identifies organizational limits in this regard. It draws parallels with management systems in relation to health and safety.
This collection is the first comprehensive selection of readings focusing on corporate bankruptcy. Its main purpose is to explore the nature and efficiency of corporate reorganisation using interdisciplinary approaches drawn from law, economics, business, and finance. Substantive areas covered include the role of credit, creditors' implicit bargains, non-bargaining features of bankruptcy, workouts of agreements, alternatives to bankruptcy, and proceedings in countries other than the United States, including the United Kingdom, Europe, and Japan.
This chapter reviews developments to improve on the poor performance of the standard GMM estimator for highly autoregressive panel series. It considers the use of the 'system' GMM estimator that relies on relatively mild restrictions on the initial condition process. This system GMM estimator encompasses the GMM estimator based on the non-linear moment conditions available in the dynamic error components model and has substantial asymptotic efficiency gains. Simulations, that include weakly exogenous covariates, find large finite sample biases and very low precision for the standard first differenced estimator. The use of the system GMM estimator not only greatly improves the precision but also greatly reduces the finite sample bins. An application to panel production function data for the U.S. is provided and confirms these theoretical and experimental findings.
The difference and system generalized method-of-moments estimators, developed by Holtz-Eakin, Newey, and Rosen (1988, Econometrica 56: 1371–1395); Arellano and Bond (1991, Review of Economic Studies 58: 277–297); Arellano and Bover (1995, Journal of Econometrics 68: 29–51); and Blundell and Bond (1998, Journal of Econometrics 87: 115–143), are increasingly popular. Both are general estimators designed for situations with “small T, large N″ panels, meaning few time periods and many individuals; independent variables that are not strictly exogenous, meaning they are correlated with past and possibly current realizations of the error; fixed effects; and heteroskedasticity and autocorrelation within individuals. This pedagogic article first introduces linear generalized method of moments. Then it describes how limited time span and potential for fixed effects and endogenous regressors drive the design of the estimators of interest, offering Stata-based examples along the way. Next it describes how to apply these estimators with xtabond2. It also explains how to perform the Arellano–Bond test for autocorrelation in a panel after other Stata commands, using abar. The article concludes with some tips for proper use.
Despite previous findings devoted to the relationship between the environment and performance, limitations have been identified regarding the impact of environmental motivations and behaviours. This study investigated production behaviour (the development of environment-friendly production) and accounting behaviour (the tracking of environmental costs) to examine the connection between environmental motivations and behaviours as well as to explain the effects on environmental management systems and financial performance. Using survey data from 253 Chinese manufacturing firms, the results revealed that sustainable environmental motivations produced more environmental behaviours, but business-oriented environmental motivations inhibited such behaviours, and sustainable firms were more concerned about production, while business-oriented firms were more focused on the accounting process. Furthermore, environmental motivations and behaviours can affect firms’ environmental management systems and thereby generate high financial performance. This study advances environmental motivation-behaviour theory and eco-efficiency research and provides recommendations for management practices.
Accompanied with rapid economic growth in the emerging economies is the severe ecological deterioration. As major pollution makers and main energy consumers, enterprises are expected to be responsible to the natural environment. However, it's still in dispute whether and when it pays to be green. Based on institutional theory and agency theory, this paper explores the impact of corporate environmental responsibility (CER) on corporate financial performance (CFP) and studies the moderating effect, as well as the co-moderating effect, of external government regulation and internal organizational slack on the relationship. With the data of 1179 observations of Chinese energy-intensive listed companies in 2012–2014, empirical results show that CER significantly positively influences CFP, and that the moderating effect of government regulation is significantly positive, i.e., stringent government regulation significantly reinforces the positive influence of CER on CFP, while organizational slack has a negative moderating effect, i.e., the firms with abundant organization slack are less likely to gain a higher financial performance from undertaking environmental responsibility. In addition, the moderating effect of organizational slack also depends on the degree of government regulation, that is to say, stringent government regulation weakens the negative moderating effect of organizational slack between CER and CFP. The results demonstrate that it pays to be green, especially those lean firms with few slacks under stringent government regulation.
Purpose
This study aims to investigates the effect of three customer orientation components – customer information-processing, responsiveness and values and norms – on a firm’s decision to adopt environmental management practices. Consistent with the literature on strategy and industrial marketing, the authors also examine the moderating effect of marketplace characteristics.
Design/methodology/approach
The authors use a linear model on a sample of 4,324 French firms with ten or more employees.
Findings
Based on a large-scale survey of firms across industries, the results indicate that customer information-processing and values and norms directly contribute to the adoption of environmental management practices. Furthermore, the effect of customer information-processing is shown to be contingent on market competition.
Practical implications
The findings have direct practical implications. When managers recognize the importance and usefulness of customer orientation, they understand the need to formulate organizational strategies in terms of environmental management practices that reflect customer expectations. In addition, following the strategic fit approach, customer orientation should fit with the specific market environment to stimulate the adoption of environmental management practices. In other words, the findings are useful for managers, who can assess the specific environmental characteristics they are facing and align these with customer orientation to build competitive advantage.
Originality/value
The findings indicate that the different dimensions of customer orientation distinctly affect a firm’s decision to adopt environmental management practices. In this sense, the authors argue that they capture different facets of the customer orientation measure, which points to the importance of analyzing the dimensions of customer orientation separately. Furthermore, rather than analyzing aggregate measures of corporate social responsibility, the authors selected environmental orientation as a specific dimension, which has received less attention in the industrial marketing literature. Finally, the main findings mark an important contribution to the literature because they provide deeper insights into the conditions under which customer orientation dimensions drive the adoption of environmental management practices.
In this chapter, we focus attention on the process of innovation and discovery in one of the most dynamic and research-intensive industries in the American economy—the ethical drug industry. A pharmaceutical innovation is the first application of a pharmaceutical discovery. The distinction between an innovation and a discovery is important in the ethical pharmaceutical industry because the medical benefits of a pharmaceutical discovery cannot be fully realized until the drug is actually produced and distributed to the medical profession.1 Fortunately, it is not too difficult to identify the innovator—the firm that was first to introduce a certain new drug to the market. What is more difficult is to trace an innovation back to its sources.
In the mid-1980s, Kamien and Schwarz (1985) concluded in their famous survey on innovation and market structure that the bulk of the empirical literature exhibits a U-shaped relationship between innovation activity on one side and market structure as well as firm size on the other. Later Cohen, Levin and Mowery (1987) argued that these correlations vanish if one controls for inter-industry differences in technological opportunity and appropriability. As it is obvious from the papers by Acs and Audretsch (1987) and Pavitt, Robson and Townsend (1987), small firms contribute — at least in some sectors of the manufacturing sector — more than bigger firms to the commercialization of new products than is indicated by their share in national R&D expenditure records in traditional R&D statistics. Based on the Dutch innovation survey in 1984, Kleinknecht (1989) found the largest R&D intensities in small firms. Moreover, standard R&D statistics are affected by a severe undercounting of R&D in small firms (see, for example, Kleinknecht, Poot and Reijnen, 1991).
This paper examines the effects of a firm's intangible resources in mediating the relationship between corporate responsibility and financial performance. We hypothesize that previous empirical findings of a positive relationship between social and financial performance may be spurious because the researchers failed to account for the mediating effects of intangible resources. Our results indicate that there is no direct relationship between corporate responsibility and financial performance—merely an indirect relationship that relies on the mediating effect of a firm's intangible resources. We demonstrate our theoretical contention with the use of a database comprising 599 companies from 28 countries.
Environmental management system has become one of the main tools used by companies to handle the environmental aspects and the impacts that their activities have on the environment. In this context, this work aims to demonstrate the results of a survey that identifies a set of indicators of environmental performance to continuously manage and improve the environmental and performance management of ISO 14001 certified companies in the Southern region of Brazil. This research is descriptive as well as quantitative and adopted two methods for factor analysis, the analysis of multiple correspondences and the principal components analysis as well as a method of classification, the cluster analysis. Several companies monitor the environmental and performance management of the industrial pulp and paper/furniture/wood and textile sectors using indicators of environmental performance. As expected, organizations from the services sector do not use such indicators. The results from cluster analysis also showed that legal and other requirements and environmental aspects are the both more representative requirements. Finally, there is a great concern for companies to meet the legal requirements as well as the conservation of environmental resources.
Today, it is undeniable that a new enthusiasm exists for green management, not only among managers but among business school students, though this enthusiasm is just starting to be tapped in a more formal way in curriculum, instructional materials, and faculty careers and advancement. Green management matters for many reasons, but fundamentally it matters because people expect managers to use resources wisely and responsibly; protect the environment; minimize the amounts of air, water, energy, minerals, and other materials found in the final goods people consume; recycle and reuse these goods to the extent possible rather than drawing on nature to replenish them; respect nature's calm, tranquility, and beauty, and eliminate toxins that harm people in the workplace and communities. From a moral or normative perspective the obligation for green management is absolute, and whether it "pays" to be green is only partly relevant.
The objective of this paper is to empirically examine the impact of national culture on firm’s corporate social responsibility (CSR) across geographical regions. Empirical tests are based on CSR performance of 3055 corporations from 28 countries located in Eastern Asia and Europe. The findings suggest that the Hofstede’s cultural dimensions have significant impacts on CSR performance, both positively and negatively depending on a given dimension of CSR. In addition, corporations located in European countries tend to effectively outperform those in Eastern Asian countries in every facet of socially responsible practice.
The Effects of institutional investor types and governance devices on two dimensions of corporate social performance (CSP) were examined. Pension fund equity was positively related to both a people (women and minorities, community, and employee relations) and a product quality (product and environment) dimension of CSP, but mutual and investment bank funds exhibited no direct relationship with CSP. Outside director representation was positively related to both CSP dimensions. Top management equity was positively related to the product quality dimension but unrelated to the people dimension of CSP.
This article suggests corporate public affairs activities can be broken down into two types: activities that ''buffer'' from the social and political environment, and activities that ''bridge'' with that environment. Drawing on previous work related to contingency theory, resource dependence, and strategic management, we developed hypotheses concerning conditions under which firms will emphasize buffering, bridging, or both. The hypotheses were tested with data collected from large American firms and Lohmoller's partial-least-squares latent variable path analysis. Buffering is found to be positively associated with environmental uncertainty and organizational power. Bridging is positively associated with uncertainty and an institution-oriented philosophy on the part of top management.
We modified Ajzen's theory of planned behavior to analyze the behavioral preferences of environmental managers. We used structural equation analysis to link the source reduction preferences of 295 environmental managers to their pollution prevention attitudes, their perceptions of norms for environmental regulation, their perceived behavioral control, and the past source reduction activity of their facilities. The hypothesized model fit the data well, except that we found the perceived behavioral control variable was negatively rather than positively predictive of behavioral preferences for source reduction activity. Research and practical implications are suggested.
Empirical studies examining the relationship between firm size and innovative activity have produced what superficially might appear to be contradictory results.' While some studies have found a positive relationship between firm size and technological change, still others have identified no relationship or even a negative one. There are two main reasons for these seemingly inconsistent findings. The first is that different measures have been used to quantify technical change. These measures have typically involved either some measure of inputs into the innovative process, such as R&D expenditures, or else the number of patented inventions. While neither of these are direct measures of innovative output, they clearly represent different aspects of the innovative process. Thus, it is perhaps not too surprising that different results have tended to emerge when the R&D input measures are used than for the patent measures. The second reason is that virtually every study examining the relationship between firm size and technical change has had to use a truncated distribution of firm sizes where either no or only a few small firms were included. For example, Scherer's [14, 234-35] conclusion that the empirical results, ". .. tilt on the side of supporting the Schumpeterian Hypothesis that size is conducive to vigorous conduct of R&D" was based on the responses of 443 large corporations participating in the Federal Trade Commission's Line of Business Survey. Similarly, Scherer [15] used the Fortune annual survey of the 500 largest U.S. industrial corporations and found that the number of patented inventions increases less than proportionately along with firm size. Soete [16] found that R&D expenditures tend to increase more than proportionately along with firm size using a sample from Business Week, consisting of the most R&D intensive firms. Bound et al. [6] were able to include a considerably wider spectrum of firm sizes in their sample of 1,492 firms from the 1976 COMPUSTAT data. They found that R&D increases more than proportionately along with firm size for the smaller firms in their sample, but that a fairly linear relationship exists for the largest firms. Inferences about the relationship between firm size and technical change based on a severely *We thank F. M. Scherer and an anonymous referee for helpful suggestions, as well as Sigrid Raasch and Jianping
This special issue of the Journal of Cleaner Production addresses sustainability through green supply chain management, design and practice in Asia by examining opportunities for sustainable consumption and production (SCP). The articles present and analyze 'top-down' green efforts by policy makers and 'bottom-up' efforts by companies in the supply chain. The articles also showcase discussions on green supply practices, implications of lean production, green innovation, green supply chain management boundaries, and methods of assessing evaluation and implementation processes. Issues of sustainability are explored in different ways and in several contexts. Within the context of the environmental, social, and economic impacts of present and anticipated impacts on climate change, societal efforts toward sustainable consumption and production within a low-fossil carbon energy system are addressed and applied. This special issue identifies highlights factors such as advanced green technology, green consumerism, green innovations, appropriate sustainable business models, green and lean supply chain management as major concerns and key ingredients in promoting large-scale sustainable consumption and production.
Ecological problems rooted in organizational activities have increased significantly, yet the role corporations play in achieving ecological sustainability is poorly understood. This article examines the implications of ecologically sustainable development for corporations. It articulates corporate ecological sustainability through the concepts of (a) total quality environmental management, (b) ecologically sustainable competitive strategies, (c) technology transfer through technology-for nature-swaps, and (d) reducing the impact of populations on ecosystems. It examines the implications that these concepts have for organizational research.
The issues of global warming and depletion of fossil fuels have paved opportunities to electric vehicle (EV). Moreover, the rapid development of power electronics technologies has even realized high energy-efficient vehicles. EV could be the alternative to decrease the global green house gases emission as the energy consumption in the world transportation is high. However, EV faces huge challenges in battery cost since one-third of the EV cost lies on battery. This paper reviews state-of-the-art of the energy sources, storage devices, power converters, low-level control energy management strategies and high supervisor control algorithms used in EV. The comparison on advantages and disadvantages of vehicle technology is highlighted. In addition, the standards and patterns of drive cycles for EV are also outlined. The advancement of power electronics and power processors has enabled sophisticated controls (low-level and high supervisory algorithms) to be implemented in EV to achieve optimum performance as well as the realization of fast-charging stations. The rapid growth of EV has led to the integration of alternative resources to the utility grid and hence smart grid control plays an important role in managing the demand. The awareness of environmental issue and fuel crisis has brought up the sales of EV worldwide.
The relationship between public-affairs management structure and social performance was studied. We explored three dimensions of publicaffairs management structure-receptivity to public affairs information, integration of public affairs information, and internal influence of public affairs-in two contrasting industries, insurance and forest products. Balanced strength along each of the three dimensions of public affairs management was found to be associated with high social performance in both industries. The pattern was more consistent for companies at the extremes of social performance ratings than it was for middle-ranked companies. In addition, differences in the institutional environments of the two industries were associated with differences in the various components of public affairs structure. public affairs sector of the business environment has matched that of issues in the market and technological sectors. Large corporations have responded to new institutional pressures with new job titles and increased resource commitments to public affairs (Brown, 1979; Marcus & Irion; 1987; Post, Murray, Dickie, & Mahon, 1983; Wartick & Rude, 1986). Organization theorists, however, have given little consideration to how these structural changes actually affect companies' responsiveness in the public affairs domain. Much of the literature on business and society reflects an external perspective in which internal variables receive little attention, and most of the research is anecdotal or deals with single case studies. By contrast, the literature on organization-environment adaptation has employed more systematic research methods and data and has focused on internal firm structure. However, that literature has not explicitly studied the organization of public affairs management. The present research was intended to fill this gap by using organization theory concepts to explore the relationship between companies' internal public affairs structures and their responsiveness to the public affairs environment in two contrasting industries, forest products and insurance. The authors are grateful to Robert H. Miles, who directed the program of research in the
