The impact of degree of internationalization of MNEs on green innovation performance: The moderating role of absorptive capacity and global dynamic management capability

Abstract

With the increasing attention given to resource scarcity and environmental destruction, growing pressure is imposed upon MNEs (multinational enterprises) by a wide range of stakeholders to exert green innovation. Although an emerging body of research has explored the contributing factors of green innovation, little attention has been paid to the impact of internationalization, especially the different dimensions of internationalization, on green innovation performance. To address this research gap, this research aims to examine the role of both the breadth (geographical range) and depth (intensity) of internationalization on green innovation performance of MNEs, and investigate the moderating roles of MNEs' global dynamic management capability and absorptive capacity. Based on organizational learning theory, this study used secondary data from Chinese listed companies and established econometric models to test the proposed research framework. The results indicated that the breadth of internationalization could enhance MNEs' green innovation performance. Alternatively, the depth of internationalization could inhibit green innovation performance. In addition, the results also revealed that global dynamic managerial and absorptive capacities can both enhance the positive effect between internationalization breadth and green innovation performance while weakening the negative effect of internationalization depth on green innovation performance. This study has implications for strengthening our knowledge of green innovation performance as well as enhancing policy design for sustainable development.