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

Abstract

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.

Improving Circular Supply Chain Performance through Green Innovations: The Moderating Role of Economic Policy Uncertainty

“…Meanwhile, it can enhance employees' quality and thinking ability and improve their emergency response capability in the face of emergencies [33,39]. Considering that any strategy pursued by firms is a combination of opportunities and challenges, supply chain risk plays a negative role in regulating the relationship between a firm green innovation strategy and firm performance when firms carry out green product innovation, green process innovation, and green service innovation [9]. As a part of the supply chain risk, when the uncertainty of economic policy increases, firms are more likely to suffer losses if they rush to green innovation strategies.…”

“…It meets the needs of consumers for environmental protection and helps firms to open up new markets, causing difficulty for firms to replicate their products and maintain product competitiveness. Successful green product innovation can improve resource utilization efficiency and enable firms to gain competitive advantages [9]. Green process innovation refers to applying green concepts in the whole process of product production to help firms improve resource utilization [10].…”

“…Green process innovation refers to applying green concepts in the whole process of product production to help firms improve resource utilization [10]. Green process innovation integrates the environmental needs of stakeholders into production design, reduces the cost of producing goods, and makes products conform to environmental regulations [9]. Green process innovation can greatly reduce environmental pollution and energy and raw material consumption.…”

“…It focuses on social responsibility for the environment and reduces the impact on the environment by providing environmental protection services [13]. By promoting green services innovation activities, such as environmental protection services and cleaner production, firms can help achieve sustainable development goals, increase barriers to competitors' entry, and gain competitive advantages [9]. Green logistics refers to activities such as transportation, warehousing, packaging, unloading, and processing by reducing energy consumption, focusing on the environment, and making full use of advanced logistics technologies with economic and social benefits [14].…”

Identifying the factors affecting strategic decision-making ability to boost the entrepreneurial performance: A hybrid structural equation modeling – artificial neural network approach

“…Strategic decisions to engage in innovation are significantly influenced by global technological growth, which produces new patterns of doing business ( Xu et al, 2022 ). To increase management decision-making ability, enterprises should optimize the governance system, raise development awareness, design development plans based on long-term sustainable growth, and encourage enterprise strategy execution ( Feng et al, 2022 ; Hu et al, 2022 ; Wang and Liu, 2022 ). Furthermore, strategic decision-making behavior requires organizations to match the external environment and internal resource capabilities; however, most are constrained by internal resources and are unable to develop flexible strategies ( Li et al, 2020b ).…”