Sustainability Strategy and Eco‐Innovation: A Moderation Model

Abstract

This study develops a moderation model to examine the role of a proactive environmental strategy on eco‐innovation. Drawing upon the perspectives of contingency theory, this study argues that the impacts of sustainability strategy on eco‐innovation depend on market demand, innovation intensity and government subsidy. The sample used to test the hypotheses is obtained from the Community Innovation Survey in Taiwan. A total of 2955 manufacturing firms are included in the final sample. A logit moderating regression is adopted to analyze the models. The results reveal that market demand and government subsidy positively moderate the relationship between environmental strategy and eco‐innovation. Specifically, firms are more likely to adopt a proactive environmental strategy to improve eco‐innovation under high levels of market demand and government subsidy. Furthermore, the results indicate that innovation intensity affects the effect of environmental strategy on eco‐innovation, but the direction of the influence varies with different categories of eco‐innovation. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment

Understanding variation in the relationship between environmental management practices and firm performance across studies: A meta‐analytic review

“…This variable refers to the time periods (years) in which the study samples were developed (Szymanski et al, ) and is used to reflect changes in the background associated with the samples over time. Regarding EMPs, these changes are characterized by an increase in regulatory stringency and market demands, and the advancement of environmental technologies (Horbach, Rammer, & Rennings, ; Tsai & Liao, ). These changes may have triggered firms to conduct organizational learning and to improve the effectiveness with which EMPs are implemented, which in turn would enhance business performance (Egger & Kaplan, 2013; Zhang & Zhu, ).…”

“…Moreover, a growing number of consumers are interested in whether firms are taking actions in response to environmental issues and claim that they are willing to pay a higher price for products and services with green benefits (Lin & Niu, ). This suggests that growing market demand over time has provided firms with more opportunities to improve business performance from developing green products or services (Dangelico, ; Lozano & von Haartman, ; Tsai & Liao, ). To successfully pursue green innovation usually requires changing existing operation systems (Huang & Li, ).…”

Barriers and Drivers to Eco-Innovation: Comparative Analysis of Germany, Poland and Ukraine

“…It should be noted that several terms have been used to describe eco-innovation: green innovation, sustainable innovation, eco-innovation and environmental innovation (Schiederig et al, 2012, Tsai & Liao, 2017, Xavier et al, 2017. In general, these definitions emphasize that eco-innovation is an innovation distinguished by two characteristics (OECD, 2010):…”

Bridging market demand, proactivity, and technology competence with eco‐innovations: The moderating role of innovation openness

“…Stakeholders help the firms gauge the environment, make decisions about priority issues the firms need to address immediately, and, finally, generate and select alternative responses to these issues (Bettinazzi & Zollo, 2017). In this study, we focus on customer groups; the customers' green requirements that encourage corporations towards eco-innovation are referred as market demand (Kammerer, 2009), through which corporations leverage green demand in making decisions that convert into superior products or services that perform better (Tsai & Liao, 2017). Customers are of primary importance because they are highly related to firms' value.…”

“…First, beyond viewing market demand, environmental proactivity, and technology competence as straightforward determinants of firms' adoption of eco-innovation (e.g., Hu et al, 2017), our consideration focuses on undertaking more types of ecoinnovation. We focus on customer and argue that market demand infers highly correct or precise information and motivates firms to work on environmental issues, reinforcing the firm with direction on more eco-innovation fields (Tsai & Liao, 2017). In respect to stakeholder theory, the activities of firms are connected to stakeholders in accomplishing their goals, of which customer group is most associated with a firm's performance (Peloza & Shang, 2011).…”