Internal Drivers of Organizational Sustainability: An Exploration of Green Innovation

Xialin  Yang; Guihua  Lu

doi:10.60027/ijsasr.2024.4422

Authors

Xialin Yang Panyapiwat Institute of Management, Bangkok, Thailand https://orcid.org/0000-0002-3076-6846
Guihua Lu Panyapiwat Institute of Management, Bangkok, Thailand https://orcid.org/0000-0002-1387-9646

DOI:

https://doi.org/10.60027/ijsasr.2024.4422

Keywords:

Green Innovation; , Organizational Sustainability; , Internal Drivers

Abstract

Background and Aims: Global environmental concerns have garnered widespread attention amidst profound shifts in the international economy, prompting a convergence towards sustainable development. Despite the imperative for economic growth, enterprises face escalating challenges in reconciling economic expansion with environmental stewardship. This study focuses on corporate green innovation as a strategic imperative, aiming to elucidate pathways for companies to achieve sustainable development and competitive advantages in the global marketplace.

Methodology: Past research predominantly delves into economic ramifications and external stimuli such as environmental regulations, yet scant attention has been devoted to exploring the internal drivers propelling proactive green innovation within enterprises. To address this gap, this study establishes an internal driving model of corporate green innovation behavior, delving into the internal factors and mechanisms shaping such initiatives. Utilizing data from listed companies spanning 2015 to 2020, this paper adopts a micro-level research approach to analyze the impact of corporate characteristics—including size, ownership nature, and industry—on green innovation behavior. Moreover, it investigates whether internal driving factors moderate these relationships.

Results: The findings reveal that enterprises' motivations to evade environmental penalties, attain environmental accolades, and garner political favor for state-owned enterprise executives significantly promote green innovation behavior. Notably, state-owned enterprises exhibit a stronger positive impact from these motivations compared to non-state-owned counterparts. Additionally, larger enterprises demonstrate heightened motivations to evade environmental penalties and pursue environmental recognition, particularly pronounced in heavily polluting industries. However, further research is warranted to elucidate the impact of political promotion motivations among state-owned enterprise executives.

Conclusion: These findings contribute to theoretical advancements in understanding the determinants of green innovation behavior, offering valuable insights for enhancing government management efficiency, corporate environmental governance, and societal appreciation of corporate green innovation initiatives.

References

Ahmed, K., & Kamran, A. (1996). Corporate environmental reporting: Evidence from UK companies. The British Accounting Review, 28(3), 207–232.

Cao, H., & Chen, Z. (2017). An empirical study on the relationship between market pressure, corporate initiative, and green innovation performance. Science and Technology Progress and Countermeasures, 34(9), 126-132.

Craswell, A.T., & Taylor, S.L. (2010). Organizational consequences of accounting standards: Evidence from non-audit fees and discontinued operations. Journal of Accounting Research, 48(2), 395-436. doi:10.1111/j.1475- 679X.2010.00373.x

Hojnik, J., & Ruzzier, M. (2016). Green innovation and its impact on firm performance: A review of empirical studies. Journal of Cleaner Production, 147, 44-56.

Jiang, F., Wang, Z., Bai, J. (2013). The Dual Effect of Environmental 983 Regulations’ Impact on Innovation——An Empirical Study Based on Dynamic Panel Data of Jiangsu Manufacturing. Industrial Economy Journal. 7, 44-55

Jiang, G., & Lu, J. 2023. Logical compatibility: Green investors, environmental regulation, and corporate green innovation. Economic Management, 45, 68–87

Kawai, N., Strange, R., & Zucchella, A. (2018). Unveiling the antecedents and performance outcomes of green innovation: empirical evidence from Italian world manufacturing firms. Management Decision, 56(3), 575-598.

Kesidou, E. (2011). Stimulating Different Types of Eco-Innovation in the UK: Government Policies and Firm Motivations. Ecological Economics, 70(8),1546-1557.DOI:10.2139/ssrn.1718708.

Kneller, R., & Manderson, E. (2012). Environmental regulations and innovation activity in UK manufacturing industries. Resource and Energy Economics, 34 (2), 211-235. DOI: 10.1016/j.reseneeco.2011.12.001

Leeuwen, G.V., & Mohnen, P. (2017). Revisiting the Porter Hypothesis: An empirical analysis of green innovation for the Netherlands. Journal of Environmental Economics and Management, 81, 114-133.

Li Guangpei, Li Yange, Quan Jiamin. (2018). Environmental Regulation, R&D Investment, and Enterprises Green Technological Innovation Capability. Science of Science and Management of S.&T, 39(11), 61-73.

Li, Q., & Xiao, Z. (2020). Heterogeneity of environmental regulation tools and green innovation incentives: Evidence from green patents of listed firms. Econ. Res. J., 9, 192–208

Liao, Z., & Cheng, H. (2014). Enterprise size, innovation motivation, and green technology innovation performance - Empirical evidence based on Shanghai and Shenzhen A-share listed companies. Journal of Management, 11, 1562–1569.

Lin, C., Wu, Y., & Ho, Y. (2019). Corporate environmental responsibility and firm risk: Empirical evidence from international automotive companies. Corporate Social Responsibility and Environmental Management, 26 (1), 60–69. doi:10.1002/csr.1699.

Liu, J., & Xiao, Y. (2022). Research on the Influence of Fund Holding on Enterprise Green Innovation. Advances in Economics and Management Research, 7(1),541. DOI:10.56028/aemr.7.1.541.2023

Qi, S., Lin, W., & Cui, J. (2018). Environmental regulation, environmental investment, and corporate performance. Science and Technology Progress and Countermeasures, 35(8), 32-38.

Sarkar, A. (2013). Innovation and firm performance in the USA and Germany. The International Journal of Human Resource Management, 24(6), 1164-1181.

Shen, N,. (2012). Environmental regulation, corporate green innovation, and environmental performance. Nankai Management Review, 15(6), 61-70.

Tao, F., Zhao, J., & Zhou, H. (2021). Does environmental regulation achieve ' incremental quality improvement of green technology innovation Evidence from the environmental responsibility system. China's Industrial Economy, 2,136-154.

Teoh, H.Y., Thong, G., & Chapman, R. J. (1984). Non-market values and disclosure practices in corporate annual reports. The British Accounting Review, 16(3), 191-214.

Trotman, K.T., Bradley, G.W., & Chapman, C. S. (1981). The effect of authoritative hierarchical sources of accounting principles on auditors' judgments. Accounting Review, 56(1), 116-133.

Wang, B., & Qi, S. (2016). Fundamental issues and solutions in the design of China's ETS pilots: Allowance allocation, the price mechanism, and state-owned key enterprises. Chinese Journal of Population Resources and Environment. 11(1),26-32. DOI:10.1080/10042857.2013.777523

Wang, M., Li, Y., Wang, Z., & Liu, S. (2022). The win-win ability of environmental protection and economic development during China's transition. Technological Forecasting and Social Change. 166(1),120617. DOI:10.1016/j.techfore.2021.120617

Wang, X., & Wang, Y. (2021) Green Credit Policy for Green Innovation Research. Managing the World, 37 (6), 173-188.

Wang, Z., & Qian, L. (2021). Does environmental regulation affect corporate environmental innovation in China? Evidence from heavy-polluting industries. Journal of Cleaner Production, 279, 123394.

Weber, T.A., & Neuhoff, K. (2010). Carbon Markets and Technological Innovation. Journal of Environmental Economics and Management, 60 (2), 115-132. http://dx.doi.org/10.2139/ssrn.1333244

Xie, X., & Zhu, Q. (2020). Exploring an innovative pivot: How green training can spur corporate sustainability performance. Business Strategy and the Environment, Wiley Blackwell, 29(6), 2432-2449,

Yu, R., Ramanathan, R., & Nath, P. (2016). An empirical investigation on green innovation and organizational performance. International Journal of Production Economics, 181, 347-356.

Zhao, A., Du, J., & Guan, H. (2018). An empirical study on the environmental innovation activities of Chinese enterprises. Science and Technology Progress and Countermeasures, 35(4), 136-142.