The Nexus between Proactive Eco-Innovation and Firm Financial Performance: A Circular Economy Perspective

Is gender diversity is diversity washing or good governance for firm sustainable development goal performance: A scoping review

In Industry 4.0, sustainability is the heart, and governance is the soul of the business, but diversity washing, greenwashing, and SDG washing are skeptical. This is due to the reactive/normative approach in dealing with sustainability and governance, which has created an amounting number of greenhouse gases, waste generation, and several business washing challenges. This study has explored the Scopus and Web of Science databases and searched for the keywords "Sustainable Development Goals" AND "Director," which provided 76 documents. However, when the authors added the third keyword, "ISO 37001-2021," along with the above two keywords, the database provided no study investigating the moderation role of ISO 37001-2021. Therefore, the study advocates the adoption of newly developed ISO 37000:2021 good governance standards for greenwashing, SDG washing, and diversity washing challenges without failing to contribute to the firm sustainable development goal performance and earning management. Secondly, the independent director attribute's role is vital due to the potential, power, position, and evidence to adopt ISO 37000:2021 standards. Thirdly, the scoping review study has proposed a conceptual model to extend the reporting discloser and transparency. It goes beyond mere compliance, contributes towards societal development, and promotes adopting sustainable development goal performance and reporting as a new non-financial parameter for evaluating the firm's performance. Lastly, this will boost firm sustainability and adopt the circular economic model, creating a unique competitive edge and green governance goodwill among the business's external stakeholders and attracting sustainably responsible investors.

Determinants of eco-innovation initiatives toward sustainability in manufacturing SMEs: Evidence from Bangladesh

This study identifies the key factors accelerating the eco-innovation initiatives of manufacturing Small & Medium Enterprises (SMEs) in Bangladesh. The study further attempted to measure the impact of eco-innovation on a firm's economic, environmental, and societal performance, broadly called sustainability. Following the convenience sampling technique, data was collected from 876 respondents through a structured questionnaire considering the 7-point Likert scale. The Structural Equation Model (PLS-SEM) has been employed using Smart PLS v3.3 software to simultaneously show the constructs' relationships. Moreover, the study incorporated several tests to check the reliability and validity of the data. Furthermore, the degree to which data collected for this study fits well with the model has been tested by calculating model fit indices- NFI and SRMR. The findings reveal that all other factors Technological Capabilities (TC), Environmental Regulations (ER), Green products (GP), Competitive Pressure (CP), and Energy Price (EP) has a significant positive association with the firm's Eco-innovation initiatives except FR. Moreover, Eco-innovation (EI) greatly enhances the two domains of Sustainability- Environmental Performance (EnP) and Societal Performance (SoP) in manufacturing SMEs in Bangladesh. However, the relationship between EI and EcP was found to be insignificant. Apart from Economic Performance (EcP) andEnvironmental Performance(EnP), Societal Performance (SoP) as a sustainability domain remains unattended in the prior study, which has been incorporated in this research. Thus, the findings of this study will provide some unique implications for business managers and policymakers.

Eco-innovation and environmental entrepreneurship: steps towards business growth

Eco-innovations are widely considered the best possible solution to fight the menace of environmental degradation. Therefore, in this analysis, we try to examine the impact of eco-innovations and environmental entrepreneurship on SME performance in China from 1998 to 2020. In order to get the short- and long-run estimates, we have employed the QARDL model that can estimate across various quantiles. The findings of the QARDL model confirm the positive impact of eco-innovations in increasing the number of SMEs in the long run, as the estimates attached to eco-innovations are positive and significant across most quantiles. Similarly, the estimates attached to financial development and institutional quality are positively significant across most quantiles. However, in the short run, the results are inconclusive for almost all variables. As far as the asymmetric impact of eco-innovations on SMEs is concerned, it is confirmed both in the short and long run. However, the asymmetric impacts of financial development and institutional quality on SMEs are only confirmed in the long run. Based on the results, important policy suggestions are discussed.

Hope-hype of green innovation, corporate governance index, and impact on firm financial performance: a comparative study of Southeast Asian countries

The current production and conception have impacted the environmental hazards. Green innovation (GI) is the ideal solution for sustainable production, consumption, and ecological conservation. The objective of the study is to compare comprehensive green innovation (green product, process, service, and organization) impact on firm financial performance in Malaysia and Indonesia, along with the first study to measure the moderation role of the corporate governance index. This study has addressed the gap by developing the green innovation and corporate governance index. Collected panel data from the top 188 publicly listed firms for 3 years and analyzed it using the general least square method. The empirical evidence demonstrates that the green innovation practice is better in Malaysia, and the outcome also shows that the significance level is higher in Indonesia. This study also provides empirical evidence that board composition has a positive moderation relationship betwixt GI and business performance in Malaysia but is insignificant in Indonesia. This comparative study provides new insights to the policymakers and practitioners of both countries to monitor and manage green innovation practices.

Eco-Innovation and Firm Performance: Evidence from South America

Eco-innovation has received a great deal of attention in academia and the business sector because it promotes a firm’s sustainable development and seeks to improve its performance. The prime objective of this study was to analyze the effect of the process, organization, and product eco-innovation on the company’s financial and environmental performance. Using a structural equation model estimated by maximum likelihood and a sample from 214 South American manufacturing companies in Colombia, Ecuador, and Perú, we found that organizational eco-innovation (OE) and process eco-innovation (PCE) are positively and significantly associated with the firm’s environmental and financial performance. In contrast, product eco-innovation (PDE) is not significantly associated with the two types of performance described. Likewise, OE has a significant and positive indirect influence on PDE, environmental performance, and financial performance. These findings suggest that OE and PCE positively affect the firm’s performance. On the contrary, PDE does not have this effect, extending the discussion that eco-innovation is specific to the context of the study.

Eco-Innovation Capabilities and Sustainable Business Performance during the COVID-19 Pandemic

The COVID-19 pandemic has had a direct impact on the manufacturing industry in Malaysia because all economic activities had to be suspended for some time. This study explores the role that eco-innovation capabilities might play in improving sustainable business performance during the ongoing pandemic. This study employs a quantitative method by distributing online questionnaires to 80 small and medium enterprises (SMEs) in Klang Valley, Malaysia. In the study, the relationship between sustainable business performance and the three variables of eco-innovation capabilities, i.e., eco-product innovation, eco-management innovation and eco-logistic innovation, were determined using multiple regression analysis. The results indicate that two hypotheses are accepted and the other one is rejected. The findings indicate that most manufacturing SMEs in Klang Valley have adopted eco-management innovation and eco-logistic innovation as crucial capabilities for their businesses during the pandemic. However, due to the challenges faced by these SMEs during the pandemic, eco-product innovation was found to have an insignificant relationship with sustainable business performance. It is insignificant because of the low productivity rate observed during the pandemic. Hence, the COVID-19 pandemic has caused manufacturing SMEs in the Klang Valley to not be able to maintain their operations and stay on track. Therefore, this research may contribute to the efforts of policymakers, government agencies and managers of manufacturing SMEs in developing a strong innovation platform on which manufacturing SMEs may rely for support in enhancing their business capacity and performance.

What Myths about Green Technology Innovation and Financial Performance’s Relationship? A Bibliometric Analysis Review

The relationship between green technology innovation and corporate financial performance has gained considerable traction in academics and businesses. However, there is limited overall bibliometric analysis on this topic. To meet the research need, this study, using Citespace (Citespace5.8r3 version, ChaomMei Chen, Philadelphia), performed the bibliometric analysis of the relationship between green technology innovation and corporate financial performance from 2007 to 2021, with 251 academic papers published in the Web of Science databases being analyzed, thus identifying the research hotspots and trends. The results showed that: (i) the number of publications has moved from slow to rapid growth and is expected to ramp up further; (ii) only a small collaboration network has been formed among the authors; (iii) institutions’ work operates relatively independently. There is still more room for inter-institutional or cross-discipline cooperation against geographical regions. However, there is a strong network of cooperation among countries. China performs best in this research area, followed by Spain and the UK; (iv) several significant co-citation relationships are also formed in the literature network. The burst literature on green innovation, product innovation, and financial performance is considered a research hotspot; and (v) “green innovation”, “corporate performance”, “legitimacy”, “environmental disclosure”, and “corporate sustainability” have become trends in research. Our results provide academics and practitioners with a robust roadmap on the relationship between green technology innovation and corporate financial performance.

Does Proactive Green Technology Innovation Improve Financial Performance? Evidence from Listed Companies with Semiconductor Concepts Stock in China

Academia and business alike are paying increasing attention to innovation in green technology due to the potential environmental and financial performance benefits. However, a limited amount of research has been carried out on the effect of proactive green technology innovation on corporate financial performance. This study examines the effects of two dimensions of proactive green technology innovation, namely, proactive green process innovation and proactive green product innovation, on corporate financial performance. Moreover, the moderating role of absorptive capacity on these relationships is introduced. The proposed hypotheses were tested empirically using a dynamic panel dataset of 126 Chinese listed semiconductor concept stocks from 2010 to 2020 and a difference-GMM approach. It was found that proactive green process innovation has a significant positive effect on both short-term and long-term corporate financial performance. Moreover, proactive green product innovation has a significant positive effect on long-term corporate financial performance. However, it does not improve short-term corporate financial performance. In addition, absorptive capacity has a positive moderating effect on the relationship between proactive green process innovation and both short-term and long-term corporate financial performance, and shows a positive moderating effect on the relationship between proactive green product innovation and long-term financial performance. However, it has a significant negative moderating effect on short-term corporate financial performance. Thus, we suggest that firms adopt more supportive proactive green technology innovation practices in order to improve their financial performance.

Vinculum of Sustainable Development Goal Practices and Firms’ Financial Performance: A Moderation Role of Green Innovation

The 2030 Agenda for Sustainable Development (SDGs) has been established to alter our world by addressing the challenges faced by humanity in order to promote wellbeing, economic prosperity, and the protection of the environment. The SDGs provide a holistic and multi-dimensional approach to development compared to conventional development plans that focus on a limited range of dimensions. As a result, linkages between the SDGs may result in differing outcomes. This research is the first to investigate the direct relationship of environmental and social SDGs with firms’ financial performance and the moderating role of green innovation. Data from 67 companies from five continents (Europe, Australia and New Zealand, Asia, North America, and Africa) and their top five blue-chip firms were collected through content analysis. Generalized least squares (GLS) were used to test for direct relationships. The results showed a positive correlation between environmental SDGs and the negative significance of social SDGs on firms’ financial performance. However, mixed findings regarding the moderation variable green innovation over SDGs and firms’ financial performance were found. The new findings extend the SDG literature and provide empirical evidence to practitioners and policymakers.

Eco-Innovations Transition of Agri-food Enterprises Into a Circular Economy

Eco-innovations that reduce the environmental effect of manufacturing and consumption are seen as critical components of sustainable development and a critical component of the transition to a circular economy. Food systems address the issue of food waste, which is generally acknowledged as a cost to the economy, the environment, and society. Eco-innovations seem to be critical for the food system's transformation to a more circular model centered on sustainable food production and processing. The goal of this paper was to determine the variables that influenced the introduction of product, process, organizational, and marketing innovations in European Union agri-food enterprises between 2012 and 2014. According to a preliminary analysis of the data, 57.40% of agribusinesses did not implement any form of innovation, which prompted the authors to study the difficulties surrounding innovation development over the 3-year reference period. Several key factors emerge as significant influences on the introduction of product innovations (0.055**); contractual requirements as significant influences on the introduction of process innovations (−0.081***); and environmental incentives as significant influences on the introduction of marketing innovations (0.062***). Additionally, product (0.704***) and process (1.051***) innovations tend to have a greater influence on enterprises' views of circular benefits. The investigation also demonstrates how enterprises and end users interpret the effect of various forms of innovation differently. Indeed, end users, in contrast to how enterprises understand it, believe that organizational (0.611***) and marketing (0.916***) innovations are critical in pursuing circular benefits.

Firm Sustainable Development Goals and Firm Financial Performance through the Lens of Green Innovation Practices and Reporting: A Proactive Approach

The current global economy demands synergy between ecological responsiveness and proactive business models. To analyze these dynamics, the objective of this study is to simultaneously investigate the effects of green innovation practices concerning the sustainable development goals (SDG) and financial performance of firms. This study also advocates for the injection of green innovation reporting into sustainable reporting for greater disclosure. Data from sixty-seven companies from five continents and the top five blue chip firms for each country are collected through content analysis, with the generalized least squares (GLS) approach used to test a causal relationship hypothesis. The results indicate mixed findings, with green product innovation showing positive relationships with returns on equity (ROE) and returns on investments (ROI). At the same time, green process innovation shows negative relationships with returns on assets (ROA) but shows a positive impact on returns on investments (ROI) and firm SDGs. In contrast, green service innovation shows an insignificant relationship with financial performance and SDGs. On the other hand, non-operational green innovation variables and green marketing positively affect returns on assets and investment, showing significant negative impacts on returns on equity. However, green organizational innovation shows an insignificant relationship with firm financial performance and SDGs. In addition, this study also shows that the Australia/New Zealand region is the leader in green innovation reporting, followed by Europe, Asia, Africa, and lastly, North America.

Panel Dataset to Assess Proactive Eco-Innovation in the Paradigm of Firm Financial Progression

Recently, eco-innovation has received a lot of attention in the academic and corporate world due to its potential to accelerate firm financial progression. To measure eco-innovation, mostly primary data and a reactive approach were employed. By emphasising the proactive approach and utilising a secondary panel dataset, this study fills the existing research gap. Data presented in this paper comprise 31 energy firms from Bursa Malaysia for the years between 2015 and 2019. Panel data associated with eco-innovation proactiveness and firm financial progression were collected from three different sources such as company websites, annual reports, and sustainability reports using content analysis. For data collection, an index was adapted comprising five dimensions of eco-innovation, named as product, process, technology, organizational, and marketing. In addition to that, Tobin’s Q was considered as a proxy dimension for firm financial progression because it considers both market value as well as book value. Following a unit root test, six specific data diagnostic tests were performed to ensure data reliability and validity for future potential usage. The results reveal that the panel dataset was organised and is eligible for further statistical model analysis.

Green Transition: The Frontier of the Digicircular Economy Evidenced from a Systematic Literature Review

Today, the issue of economic circularity is certainly not a new concept. It represents an essential issue in any production system since it is an alternative to the current production and consumption model. The importance of the topic is confirmed worldwide. However, there is still a “circularity gap” that can be bridged in the short and medium term, probably with the use of innovative and digital technologies. In fact, many researchers agree that the sustainable future can be achieved in the long term thanks to digital technologies (i.e., IoT, artificial intelligence, quantum computing etc.) which, thanks to their speed of calculation, are able to identify the right solutions at the right time. The challenge, therefore, will be to develop innovative technologies and tools for the efficient use of resources in industries for sustainable production. Thus, the aim of this study is to define the current state of the art and future research developments in this very promising field. To achieve this goal, the integration of a “set” of tools, based on the AHP method and the PRISMA protocol, is proposed. The results aim to be a guideline for decision makers and researchers interested in this topic.

The Inter-Relationship between Innovation Capability and SME Performance: The Moderating Role of the External Environment

Small and Medium-Sized Enterprises (SMEs) play a crucial part in a country’s economic growth and sustainable development. The purpose of this study is to investigate the relationship between innovation and the performance of SMEs. An external environmental factor acts as a moderating variable between the exogenous and endogenous variables. Data were collected from 350 textile SMEs operating in Pakistan using a cross-sectional study design through self-administered questionnaires. Of these, only 335 surveys were valid for further analysis. The structural equational modeling technique was used for analyzing the data and testing the hypotheses that innovation and the external environment affect an SME’s performance. The results indicate a significant association between innovation and SME performance, and the external environment has a moderating impact on innovation and SME performance. This paper offers valuable recommendations to senior managers and owners of SMEs to consider the innovation and external environment as crucial factors when assessing their SME’s performance. This study contributes towards the body of knowledge on this subject and can help practitioners and researchers explore the effects of innovation and the external environment on the performance of SMEs.