The Mediating Effects of Green Innovation and Corporate Social Responsibility on the Link between Transformational Leadership and Performance: An Examination Using SEM Analysis

Nexus between corporate social responsibility and firm performance: a green innovation and environmental sustainability paradigm

Climate change concerns have become severe challenges in developing countries' sustainable development due to the immense usage of fossil fuels. The government has effectively employed green practices to solve these challenges in developing countries. This study explores how corporate social responsibility influences firm performance by analyzing the data collected from 650 respondents of manufacturing firms in a developing country, i.e., China. Structural equation modeling has been applied to analyze and investigate the proposed hypotheses. The results showed that corporate social responsibility does not directly affect the firm performance. In contrast, corporate social responsibility is positively related to green transformational leadership and green innovation, which improve firm performance. The results further indicated that green innovation and green transformational leadership significantly mediate the link between corporate social responsibility and firm performance. This study offers essential insights for managers and policymakers of manufacturing firms in managing corporate social responsibility, green innovation, and green transformational leadership when analyzing firm performance. It may aid general managers of major manufacturing firms in strengthening internal resources to improve the firm performance.