How green transformational leadership drives environmental performance and firm performance? Empirical evidence from an emerging economy

Abstract

This study attempted to inspect the influence of green transformational leadership (GTL) on the development of business performance (FP) and environmental performance (EP) in SMEs of Vietnam with a mediating of green innovation (GI). Besides, the current study evaluated the positive impact of GTL on green human resource management (GHRM) and green thinking (GT), and ultimately on GI. The study investigated the hypotheses supplied by 416 survey samples from managers and directors at SMEs using structural equation modeling. Our findings reveal that GTL significantly influences the three green criterias, GHRM, GT, and GI. It investigates the impact of green factors in the context of Vietnamese SMEs. Specifically, the uniqueness of this study lies in examining the mediating role of GI with respect to the link between GTL and EP, FP, to compare how the indirect effects of GTL on EP and FP differ under the same conditions. Besides, the finding highlights that businesses will benefit from continual GI regarding the environment, earnings, and corporate image. Thus, the implications arising from this study and related documents contribute to helping managers understand the needs and benefits of green factors, thereby prioritizing the transmission of green goals to employees via vision and mission, thereby creating a new cultural dimension that contributes to the natural environment's sustainability. Furthermore, managers are urged to recruit, inspire, and provide opportunities for green human resources to use their potential for enhancing green products and processes to build the business and contribute to the environment.