Capital Formation, Green Innovation, Renewable Energy Consumption and Environmental Quality: Do Environmental Regulations Matter?

The world economy continues to witness a steady rise in carbon emissions, which makes it challenging to fulfill the terms of the Paris agreement on reducing greenhouse gas emissions. In this context, countries worldwide enact environmental regulations to curtail environmental pollution to promote sustainable development. However, the importance of environmental regulations has not been fully validated in the previous literature. In addition, the concurrent roles of capital formation, green innovation, and renewability cannot be overlooked. Against this backdrop, this study selects data from G7 countries from 1994 to 2019 to explore the effect of environmental regulations, capital formation, green innovation, and renewable energy consumption on CO₂ emissions. In order to achieve the above research objectives, we employ the Method of Moments Quantile Regression (MM-QR) for empirical analysis. The results reveal that capital formation significantly enhances environmental quality by reducing CO₂ emissions across all quantiles (10th-90th). Environmental regulations show a significant and negative impact on CO₂ emission mainly at the middle and higher emissions quantiles, while the effect is insignificant at lower quantiles (10th). Moreover, green innovation and renewable energy consumption mitigate CO₂ emissions across all quantiles (10th-90th), while economic growth deteriorates environmental quality in G7 countries. The panel granger causality results indicate the unidirectional causality running from capital formation, environmental regulations, and renewable energy towards CO₂ emissions, which implies that any policy related to these variables will Granger cause CO₂ emissions but not the other way round. Based on the findings, important policy implications are proposed to promote sustainable development in G7 countries.

Digital Transformation and Green Innovation of Chinese Firms: The Moderating Role of Regulatory Pressure and International Opportunities

The digitalization of business processes has increasingly challenged conventional wisdom in corporate green innovation. This empirical paper studies the timely but theoretically underexplored relationship between digital transformation and green innovation in a developing country context. Given that firms' digital transformation shifts organizational structures toward decentralization, we employ a digital perspective to analyze organizational coordination, control, and learning mechanisms and propose that digital transformation positively affects corporate green innovation. Moreover, drawing on structural contingency theory, we demonstrate that such effects can be strengthened by external contingencies, specifically regulatory pressure and international opportunities. Using a dataset of Chinese listed firms, we find empirical support for our hypotheses. Our study is one of the first to examine how firms can leverage organizational digital transformation to enhance their green innovation performance and thus provides new insights into the drivers of sustainable practices for firms in developing countries.

Can Green Innovation Improve Regional Environmental Carrying Capacity? An Empirical Analysis from China

Green innovation has become an important driving force for China's economic transformation and development. This paper selects the 2010-2020 provincial-level regions in China as samples, and adopts a multi-indicator comprehensive evaluation method to comprehensively, objectively and scientifically evaluate the environmental carrying capacity of air pollution in two dimensions: natural resource endowment and human activity impact, and also measures and calculates the green innovation in each province, city and autonomous region to explore the specific impact of green innovation on environmental carrying capacity and its spatial spillover effect; it also explores the heterogeneous effects of green innovation on environmental carrying capacity under different pollution environments. The conclusions show that: (1) Green innovation has a positive impact on environmental carrying capacity. (2) There is a spatial spillover effect of green innovation on environmental carrying capacity. In other words, in areas with higher PM2.5 concentration, that is, lower environmental quality, green innovation has a weaker ability to improve environmental carrying capacity; in areas with lower PM2.5 concentration, that is higher environmental quality, green innovation has a stronger ability to improve environmental carrying capacity. (3) In the process of green innovation affecting environmental carrying capacity, PM2.5 plays the part of a mediating effect, indicating that green innovation is an intermediate transmission mechanism affecting environmental carrying capacity, and the results show that the absolute value of the short-term indirect effect is greater than the absolute value of the short-term direct effect, and the long-term direct effect is greater than the long-term indirect effect.

The Impact of Digital Transformation on Corporate Environment Performance: Evidence from China

In recent years, the rate of climate change appears to have accelerated, and digital transformation and environmental performance have become increasingly important in the field of corporate social responsibility. Previous studies have mainly focused on the economic consequences of digital transformation. However, research on the effect of digital transformation on reducing firms' emissions is relatively rare. This study focused on two kinds of typical environmental pollutants: waste gas emissions and wastewater emissions. Using data on Chinese listed firms from 2010 to 2018 and adopting the fixed effect model to investigate the emission reduction effect and mechanism of digital transformation on waste gas emissions and wastewater emissions of firms, we found the following: (1) digital transformation significantly reduces pollution emissions; (2) the relationship is more pronounced in state-owned enterprises (SOEs), high-polluting enterprises, and economically developed regions; (3) to gain a more in-depth understanding of how digital transformation affects the pollution emission behavior of firms, we further conducted mechanism tests and found that digital transformation reduces pollution by increasing total factor productivity and green innovation and improving firms' internal controls. The above conclusions still hold after a series of robustness tests, including alternative econometric specifications and overcoming potential endogeneity with an instrumental variable. Overall, our findings provide new insights into the effect of digital transformation on environmental pollution emissions. Hence, all governments should pay more attention to digital transformation for sustainable development and improved environmental quality.

Local Government Debt and Green Total Factor Productivity-Empirical Evidence from Chinese Cities

In recent years, the expansion of local government debt (LGD) in China has caused widespread concern. Enhancing green total factor productivity (GTFP) is an important way to coordinate resources, environment, and regional development and is an important indicator to realize the transformation of green economic development. Scientific assessment of the impact of LGD on GTFP helps promote the transformation of green economic development. This paper selects sample data from 271 cities in China from 2010 to 2019 and empirically investigates the mechanisms of LGD, green innovation, and financial market development on GTFP. The results show that (1) LGD expansion significantly suppresses GTFP in China; (2) green innovation mediates between the two, and LGD suppresses GTFP by reducing the level of green innovation; and (3) financial market development can mitigate the negative impact of LGD on urban GTFP. Therefore, the governance of LGD should be strengthened, the financial market environment should be optimized, the distortion of financial resources should be corrected, and innovative financing modes such as green finance and green credit should be encouraged to enhance GTFP.

Study on the Influence Mechanism of Environmental Management System Certification on Enterprise Green Innovation

Improving the green technology innovation capability of enterprises is an important way for industrial enterprises to improve product quality and production efficiency and reduce industrial pollution and energy consumption. Based on the Porter hypothesis, this paper took the data of listed companies of the heavy polluting industry in Chinese A-shares from 2011-2018 as a study sample, and a difference-in-differences (DID) model was constructed to explore the impact of environmental management system certification (EMSC) on enterprises' green innovation. This paper also studied the differential impact between the EMSC and enterprises' green innovation from the perspective of enterprise heterogeneity. It was found that the EMSC has a significant promotion effect on the enterprises' green innovation; this promotion changes with the size and ownership of the enterprise and the lifecycle of the enterprise. Meanwhile, customer, shareholder, and creditor satisfaction all play a positive moderating role in the process of EMSC affecting green innovation, while the moderating role of supplier satisfaction is not significant. The findings of this paper have important implications for the understanding of the role of EMSC in promoting green innovation in enterprises.

Does Human Capital Matter for China's Green Growth?-Examination Based on Econometric Model and Machine Learning Methods

To tackle the increasingly severe environmental challenges, including climate change, we should pay more attention to green growth (GG), a path to realize sustainability. Human capital (HC) has been considered a crucial driving factor for developing countries to move towards GG, but the impact and mechanisms for emerging economies to achieve GG need to be further discussed. To bridge this gap, this paper investigates the relation between HC and GG in theory and demonstration perspective. It constructs a systematic theoretical framework for their relationship. Then, it uses a data envelopment analysis (DEA) model based on the non-radial direction distance function (NDDF) to measure the GG performance of China's 281 prefecture level cities from 2011 to 2019. Ultimately, it empirically tests the hypothesis by using econometric model and LightGBM machine learning (ML) algorithm. The empirical results indicate that: (1) There is a U-shaped relationship between China's HC and GG. Green innovation and industrial upgrading are transmission channels in the process of HC affecting GG. (2) Given other factors affecting GG, HC and economic growth contribute equally to GG (17%), second only to city size (21%). (3) China's HC's impact on GG is regionally imbalanced and has city size heterogeneity.

The Impact of Financial Deepening on Carbon Reductions in China: Evidence from City- and Enterprise-Level Data

This study extends the limited evidence of the China context by establishing a panel fixed-effect model to identify the nexus between financial deepening and carbon emissions. Using newly compiled city-level (287 prefecture-level and above cities) and enterprise-level (resource enterprises listed on the Chinese A-shares) datasets from 2007 to 2019, this study quantitatively evaluated finance deepening and analysed the impact of financial deepening on carbon emissions in China, with a particular consideration of green innovation. Our results document that financial deepening contributes to carbon reductions, as shown by the considerably decreased carbon dioxide (CO₂) emissions. Both the city-level and enterprise-level estimates argue that financial deepening has a promoting effect on green innovation. Stimulating green innovation is identified as an important mechanism through which financial deepening can contribute to carbon reductions. Policy implications are presented based on the empirical results.

Digital Transformation on Enterprise Green Innovation: Effect and Transmission Mechanism

With the development of blockchain, big data, cloud computing and other new technologies, how to achieve innovative development and green sustainable development in digital transformation has become one of the key issues for enterprises to obtain and maintain core competitiveness. However, little of the literature has paid attention to the impact of digital transformation on enterprise green innovation. Using the data of Chinese A-share listed companies from 2010 to 2020, this paper empirically analyzes the impact of enterprise digital transformation on green innovation and its transmission mechanism, by constructing double fixed-effect models. The results show that digital transformation has remarkably promoted the green innovation of enterprises. R&D investment, government subsidies, and income tax burden have played a conductive role between digital transformation and enterprise green innovation. Furthermore, digital transformation can significantly promote the high-quality green innovation of enterprises and also plays a more significant role in promoting the green innovation of high-tech enterprises and state-owned enterprises. A robustness test is carried out by using the lag data and changing the measurement methods of the dependent variable and independent variables, and the research conclusions are still valid. Based on resource-based theory and dynamic capability theory, this paper reveals the impact path of digital transformation on enterprise green innovation, further expanding the research field of digital transformation and enriching the research on the influencing factors of enterprise green innovation. This paper provides policy suggestions for the government to improve the enterprise green innovation level by increasing government subsidies and providing tax incentives and also provides reference for digital transformation enterprises to accelerate green innovation by increasing R&D investment, obtaining government subsidies, and acquiring tax policy support.

Can Digital Economy Promote Energy Conservation and Emission Reduction in Heavily Polluting Enterprises? Empirical Evidence from China

This paper examines the impact of digital economy on corporate energy conservation and emission reduction (CECER) using China's A-share listed heavily polluting enterprises from 2012 to 2019 as a sample. Our results show that: (1) Digital economy can significantly increase CECER, and this effect is significant for mining and manufacturing enterprises, and less significant for power, heat production and supply enterprises; (2) Mechanism research shows that digital economy promotes CECER through enhancing the green technology innovation capability, easing the financing constraints, and boosting market competition; (3) Heterogeneity research indicates that the promotion of digital economy to CECER is more significant in economically developed regions and regions with less financial pressure from local governments. This paper clarifies the factors influencing CECER and provides empirical evidence for achieving digital economy development and government goals for CECER.

Green Innovation, Corporate Environmental Ethics, and Competitive Advantages of Chinese Automobile Industry During COVID-19: Corporate Environmental Management as Moderator

Objective

The main purpose of this study is to investigate the impact of green product and process innovation on the competitive advantages of the Chinese automobile industry during coronavirus disease 2019 (COVID-19). This study also examined the mediating role of corporate environmental ethics (CEE) and the moderating role of corporate environmental management in the relationship between the green product and process innovation on the competitive advantages of the Chinese automobile industry during COVID-19.

Methods

This study used a quantitative approach of research with the cross-sectional method for the collection of data. This study also used purposive sampling for the collection of data from the production managers of the automobile industry of China. The structural equation modeling-partial least squares (SEM-PLS) is used to analyze the data.

Results

The results of direct effects indicated that green product innovation has a significant and positive effect on the corporate advantages (β = 0.294, t = 2.868) and green process innovation also has a significant and positive effect on the corporate advantages (β = 0.350, t = 3.276). Moreover, green product innovation has also a significant effect on corporate advantages (β = 0.334, t = 4.258) and green product innovation has also a significant effect on corporate advantages (β = 0.269, t = 3.202).

Significance

The research in this domain about the antecedents of green innovation is still minimal in the previous literature. One of the antecedents of the green innovation, corporate environmental ethics is discussed in this study; thus, it provides the understanding of green innovation as the mediator which would mediate the relationship between corporate environmental ethics and competitive advantage in the auto manufacturing industry of China.

Novelty

This study is among very few to examine the relationship between green innovation, corporate environmental ethics, corporate environmental management, and competitive advantages of the Chinese automobile industry during COVID-19.

Global Value Chain Participation and Green Innovation: Evidence from Chinese Listed Firms

Green innovation is one of the most important approaches to prevent environmental pollution and foster sustainable development. Embedded in the global production networks, manufacturing firms have been found not only to be the main drivers of innovation but also the main polluters in developing countries. However, relatively few studies have systematically considered the effect of global value chain (GVC) participation on green innovation in the context of developing countries. By using a panel dataset of Chinese listed manufacturing firms, this study conducts panel data fixed-effect analyses and uses the instrumental variable two-stage least square model to investigate the effect of GVC participation on firms’ green innovation performance. The results show that increased GVC participation leads to improved green innovation performance of Chinese firms. Meanwhile, further heterogeneity analyses show that the impact of GVC participation on green innovation is more pronounced for firms with greater financial constraints, state-owned firms and firms in labor- or pollution-intensive industries, located in the eastern regions of China. Therefore, this study sheds light on the implication that actively participating in GVC is the key to promoting sustainable growth when facing the need for transformation in developing countries.

The Effects of Green Intellectual Capital on Green Innovation: A Green Supply Chain Integration Perspective

To demonstrate how green innovation (GI) effectively occurs, this study examines the effects of green intellectual capital (GIC) on GI from the perspective of green supply chain integration (GSCI). Based on a natural-resource-based view and knowledge-based view, the authors constructed an intermediary model of GIC-GSCI-GI, and analyzed the effects of green absorptive ability (GAA) and relationship learning ability (RLA) as moderators. An empirical survey of 328 Chinese manufacturing companies was conducted. Our results indicate that three dimensions of GIC positively impact GI. The mediating effects of internal and external GSCI exist in the relationship between GIC and GI. The moderating effects of GAA and RLA in these effects were also verified. Our study provides further empirical evidence for the relationship between GIC and GI, highlights the effects of companies' internal and external abilities on GI, and suggests new ways and implementation contexts for GI.

Green Innovation Behavior Toward Sustainable Tourism Development: A Dual Mediation Model

The rapid increase in globalization has fostered the emerging ecological challenges to halt human civilization, substantially highlighting the need for environmental management. The study’s primary objective is to analyze the impact of environmental perception of corporate social responsibility (CSR) and attitude toward environmental CSR on sustainable tourism development while considering the mediating role of national park identification goals and employee pro-environmental behavior. The data was collected from the 338 employees working in the Chinese tourist firms’. The study variable’s reliability and validity was checked by using Composite Reliability (CR) and Average Variance Extracted (AVE). Study results show that environmental CSR perception and attitude toward environmental CSR positively impact sustainable tourism development, national park Goal identification, and employee pro-environmental behavior. National Park goal identification and employee pro-environmental behavior mediate between sustainable tourism development and environmental perception of corporate social responsibility and attitude toward environmental CSR.

The Impact of the Green Finance Reform and Innovation Pilot Zone on the Green Innovation-Evidence from China

This article uses the “Green Finance Reform and Innovation Pilot Zone” promulgated in 2017 as an example to construct a quasi-natural experiment and uses the difference-in-difference method to test the impact of the implementation of the “Green Finance Reform and Innovation Pilot Zone” on the green innovation activities. It was found that the policy promotes the quantity and quality of corporate green innovation. The mechanism test showed that policy promotes the R&D investment and expands the credit scale. The study further found that green finance policies enhance the green innovation of enterprises as government environmental regulation is strengthened. Finally, green innovation by state-owned enterprises is more strongly promoted in the pilot green finance reform and innovation zones, and green innovation by enterprises in non-polluting sectors is more sensitive to the policy, with a heterogeneous pattern of policy effects in eastern and non-eastern China. Therefore, green finance policies should be promoted to achieve an effective combination of financial resource allocation and corporate green innovation to promote the construction of ecological civilization.

Can Digital Financial Inclusion Promote Green Innovation in Heavily Polluting Companies?

This paper takes the China A-shares listed companies in heavy polluting industries from 2011 to 2020 as samples, combines the digital financial inclusion index to empirically examine the impacts of digital financial inclusion development on the green technology innovation of heavily polluting companies, and reveals its mechanism of action and its heterogeneity of the impacts of enterprises’ green technology innovation in different development stages. The empirical research results show that the development of digital financial inclusion is able to promote the green innovation of heavy-polluting enterprises. Its main manifestation is that the development of digital financial inclusion helps the increase of green patent applications of heavy-polluting enterprises. This conclusion is validated through the endogeneity and robustness tests. The test results of the mechanism of action show that digital financial inclusion promotes green innovation of enterprises by alleviating corporate financing constraints and financial mismatch problems. Further research results show that the role of digital financial inclusion in promoting green technology innovation in heavy-polluting enterprises is more pronounced in mature enterprises. Therefore, this study provides a theoretical basis for the development of digital financial inclusion to promote heavy-polluting enterprises to achieve green transition through green technology innovation, thus achieving the “dual carbon” goal.

How Government Size Expansion Can Affect Green Innovation-An Empirical Analysis of Data on Cross-Country Green Patent Filings

The expansion of government size will have dual effects on a country’s green innovation. An appropriately sized government size increases marginal productivity and stimulates the development of green innovation by increasing government expenditure. On the contrary, an excessively sized government creates a huge administrative agency, which not only increases the tax burden but also damages social welfare by excessive intervention. Therefore, the effect of government size on green innovation is not linear. In order to prove this proposition, this study examines the impact of government size on green innovation in 166 countries between 1995 and 2018, using a two-way fixed effects model. The results reveal an inverted U-shaped relationship between government size and the level of green innovation, indicating that optimal government size may maximize a country’s green innovation output. The results further suggest that this inverted U-shaped relationship is mainly influenced by environmental regulations and financial support. Finally, our heterogeneity analysis demonstrates that the inverted U-shaped relationship is more pronounced for countries with high organizational inertia and more R&D expenditure than for those with low organizational inertia and less R&D expenditure. This finding makes up for the research gap between government size and green innovation and provides a reference for countries to formulate the optimal government size to improve the level of green innovation.

How Do Green Innovation Strategies Contribute to Firm Performance Under Supply Chain Risk? Evidence From China's Manufacturing Sector

With environmental issues increasingly becoming prominent in today's business world, firms may need to pay extra attention to developing their environmental strategies and capabilities in response to environmental concerns and achieving sustainable growth. While a broad consensus exists on the value of green innovation, current empirical research on how different types of green innovation strategies may account for the international performance of a firm remains scant. Addressing this gap is important because determining how to better manage a firm's green innovation strategies nowadays has become increasingly important for firms hoping to achieve and maintain their sustainable performance advantages. This study aims to bridge this gap by systematically examining how various types of green innovation strategies (i.e., green product, green process, and green service innovations) can be beneficial to firms in an emerging market economy. This study also examined the important role that potential risks of supply chain play in shaping the relationships between various types of green innovation strategies and firm performance. This study proposes that the effective management of supply chain risks may be important to the successful implementation of green innovation strategies because green innovation has increasingly become a collaborative effort. This study empirically tested the hypotheses by gathering survey data from a sample of 337 firms in China's manufacturing industries. Results demonstrate that the green innovation strategies of firms are positively related to their firm performance. Additionally, the potential risks faced by the firms in efficiently and effectively managing their supply chain significantly moderate the impact of green product innovation and green process innovation strategies on their firm performance. This study not only offers useful theoretical implications for the green innovation strategy research and for better and effective supply chain risk management. It also provides important practical guidelines and managerial actions that practicing managers can implement to accelerate their green innovation strategy, assess the effect of supply chain risks, and thus improve firm performance in the post-pandemic era.

Driving Mechanism for Manufacturer's Decision of Green Innovation: From the Perspectives of Manager Cognition and Behavior Selection

From the perspectives of manager cognition and behavior selection, this paper analyzes the cognitive basis of manufacturer’s green innovation and discovers that the embodied cognition of the manager has an important influence on the selection of green innovation behavior. Next, the behavior activation in the four stages of manufacturer’s green innovation, namely, initiation, termination, change, and solidification, was analyzed, and two behavior selections were proposed: the adaptive legitimacy with institutional logic as the cognitive starting point and the strategic legitimacy with efficiency logic as the cognitive starting point. On this basis, the authors examined four types of manufacturer decisions of green innovation (compliance, selection, creation, and control) driven by manager cognition and behavior selection. The examination reveals how should the manager, facing the growing environmental pressure, form a correct cognition, select the right behavior, and make the proper green innovation decision, which promotes the green, sustainable development of manufacturers.

Organizational Behavior in Green Supply Chain Integration: Nexus Between Information Technology Capability, Green Innovation, and Organizational Performance

Stakeholder pressure and public awareness of environmental protection drive organizations to improve environmental practices in the supply chain (SC), such as green supply chain integration (GSCI) and green innovation (GI). The use of information technology (IT) is crucial to manufacturing organizations' GSCI and performance. However, the research on the relationship between IT capabilities, GSCI, GI and organizational performance is still limited. Therefore, empirical research is needed on the cognitive thinking of employees using IT capabilities to improve GSCI and organizational performance. The data for this study comes from SC personnel in manufacturing organizations through a structured questionnaires and was analyzed by employing structural equation modeling. Based on the results, this paper concludes that organizational IT capabilities positively affect the GSCI and improve organizational performance (environmental and operational performance). Furthermore, the study discovered that GI increases organizational performance and acts as a positive mediator in the link between GSCI and performance. The findings contribute to existing GSCI and GI knowledge, which can provide a bird's eye-view to develop an organization's IT capabilities to achieve competitive performance goals.

Do Managerial Ties Help or Hinder Corporate Green Innovation? The Moderating Roles of Contextual Factors

Green innovation has significant implications for firms' financial, environmental, and social performance. However, its externalities may inhibit the proactive involvement of firms in such initiatives. In this study, we examined the roles of two types of managerial ties (i.e., business and political) in green innovation and further investigated the moderating effects of two types of contextual factors (i.e., environmental regulations and competitive intensity). By conducting an empirical study using survey data from 218 samples, we confirm that business ties positively affect green innovation while political ties have an inverted U-shaped effect. Moreover, the relationship between managerial ties and green innovation is contingent on specific context settings. Our results show that the environmental regulations enforced by the government strengthen both the effects of business and political ties, while the competitive intensity has no effect on the relationship between business ties and green innovation; however, it sharpens the curvilinear effect of political ties.

The Impact of Green Credit on the Green Innovation Level of Heavy-Polluting Enterprises-Evidence from China

This article uses the "Green Credit Guidelines" promulgated in 2012 as an example to construct a quasi-natural experiment and uses the double difference method to test the impact of the implementation of the "Green Credit Guidelines" on the green innovation activities of heavy-polluting enterprises. The study found that, in comparison to non-heavy polluting enterprises, the implementation of green credit policies inhibited the green innovation of all heavy-polluting enterprises. In the analysis of heterogeneity, this restraint effect did not differ significantly due to the nature of property rights and the company's size. The mechanism test showed that green credit policy limits the efficiency of business investment and increases the cost of financing business debt. Eliminating corporate credit financing, particularly long-term borrowing, negatively impacts the green innovation behavior of listed companies.

Do Tournament Incentives Matter for CEOs to Be Environmentally Responsible? Evidence from Chinese Listed Companies

Relying on tournament theory and environmental management research, we examine how CEO tournament incentives induce top executives to invest more in green innovation. Using a sample of Chinese listed companies from 2010 to 2016, we find evidence that CEO tournament incentives are positively associated with green innovation. In addition, we find that a positive relationship between CEO tournament incentives and green innovation is stronger in state-owned enterprises than in non-state-owned enterprises. These results support tournament theory, which proposes that better incentives induce top executives’ efforts to win the tournament incentives, and such efforts are subject to fiercer competition among employees, which improves firms’ social and financial performance. Moreover, our findings have implications for policy makers and regulators who wish to enhance environmental legitimacy by providing tournament incentives to top executives.

Local governments’ environmental emphasis and corporate green innovation: evidence from China

To study the effect of green industrial policies comprehensively, this paper takes uses a sample of Chinese Shanghai and Shenzhen A-share listed companies from 2008 to 2019 to study the impact of local governments’ environmental emphasis on corporate green innovation. The results show that local governments’ environmental emphasis has a significant positive impact on the number of green patents of enterprises. More importantly, local governments’ environmental attention mainly plays its role by improving the environmental protection awareness of corporate executives and increasing environmental protection subsidies. In addition, the effect of local governments’ environmental emphasis is more pronounced in state-owned enterprises, firms with low financing constraints, and heavily polluting firms. Further research finds that local governments’ environmental emphasis has a significant role in promoting the number of green invention patents and non-invention patents, but only green invention patents enhance the intrinsic value of enterprises.

Determinants of Green Innovation to Achieve Sustainable Business Performance: Evidence From SMEs

Environmental degradation and global warming are major challenges to humankind in the twenty-first century. Thus, businesses are now adopting and incorporating more sustainable manufacturing methods to produce environmental products and services. It is inevitable for organizations to adopt green practices and achieve sustainable performance. This extant research addresses how to obtain sustainable development (SD) through green innovation (GRIN). The main purpose of this study is to develop a comprehensive model by integrating natural resource-based view (NRBV) and triple bottom line (TBL) framework. Three antecedents namely green absorptive capacity (GAC), sustainable human capital (SHC), and organization support (OS) were selected, and their influence was checked on GRIN of the SMEs from manufacturing sector. This study included all three factors of TBL: environmental, economic, and social sustainability in terms of GRINs possible consequences. Data were randomly collected from 304 firms in the kingdom of Saudi Arabia through questionnaire. Convergent and discriminant validity analyses were conducted to assure validity and reliability, and structural equation modeling (SEM) was utilized to assess the relationships between variables using smartPLS 3.0 software. Further, firms were categorized into two groups based on company size-small and medium-to explore group differences. Hence, firm size was included as a moderator in the proposed model and multi-group analysis (MGA) was performed. The results indicate that GAC, SHC, and OS have positive influence on GRIN within SMEs. Further, results reveal GRIN had strong significant impact on all three variables of sustainable performance. The study concludes with MGA results that provided evidence of significant group differences, with a stronger relationship between GAC and GRIN in medium-sized firms compared to small-sized firms. Similarly, the relationship between GRIN and environmental performance was stronger in medium-sized firms than small-sized firms. This study is unique and provides practical and theoretical implications. This paper offers an integrative model for sustainability which may be of interest to scholars, marketers, and policymakers.