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Does organisational capital influence environmental strategies? Evidence from environmental innovation

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  • Muhammad Nadeem
  • Stephen Bahadar
  • Rashid Zaman
  • Muhammad Bilal Farooq

Abstract

As a result of increasing consumer awareness and stakeholder demands about environmental management, firms face stricter challenges surrounding the impact of business operations on the environment. In this regards, environmental innovation is one of the important ways of acting in harmony with the environment. Thus, the purpose of this study is to examine the impact of organisational capital on environmental innovation measured as the process innovation and product innovation. Using environmental innovation data from ASSET4 for the US listed firms between 2002 and 2018, our empirical results reveal a significant positive association between organisational capital and both the process innovation and product innovation. Furthermore, the relationship is stronger in high‐profitability and sensitive industries subsamples. These results are robust to additional control variables and endogeneity tests. This study, while endorsing the resource‐based view (RBV), provides important implications for the top management teams that organisational capital could be an important channel through which managers can boost environmental innovation.

Suggested Citation

  • Muhammad Nadeem & Stephen Bahadar & Rashid Zaman & Muhammad Bilal Farooq, 2021. "Does organisational capital influence environmental strategies? Evidence from environmental innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 4121-4135, December.
    • Handle: RePEc:bla:bstrat:v:30:y:2021:i:8:p:4121-4135
    DOI: 10.1002/bse.2860
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    References listed on IDEAS

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    1. Wang, Xinxin & Xu, Zeshui & Qin, Yong & Skare, Marinko, 2022. "Innovation, the knowledge economy, and green growth: Is knowledge-intensive growth really environmentally friendly?," Energy Economics, Elsevier, vol. 115(C).
    2. Linda Kusumaning Wedari & Amir Moradi‐Motlagh & Christine Jubb, 2023. "The moderating effect of innovation on the relationship between environmental and financial performance: Evidence from high emitters in Australia," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 654-672, January.
    3. C. A. K. Lovell, 2021. "The Pandemic, The Climate, and Productivity," CEPA Working Papers Series WP112021, School of Economics, University of Queensland, Australia.
    4. Mariela Carvajal & Muhammad Nadeem & Rashid Zaman, 2022. "Biodiversity disclosure, sustainable development and environmental initiatives: Does board gender diversity matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 969-987, March.
    5. Kaveh Asiaei & Neale G O'Connor & Omid Barani & Mahesh Joshi, 2023. "Green intellectual capital and ambidextrous green innovation: The impact on environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 369-386, January.
    6. Khine Kyaw & Julio Pindado & Chabela de-la-Torre, 2022. "Disentangling the Bidirectional Relationships Across the Corporate Sustainable Development Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(1), pages 297-320, August.

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