IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2018i1p15-d192031.html
   My bibliography  Save this article

Profiting from Green Innovation: The Moderating Effect of Competitive Strategy

Author

Listed:
  • Jiawen Chen

    (School of Management, Jinan University, Guangzhou 510632, China)

  • Linlin Liu

    (School of Business Administration, South China University of Technology, Guangzhou 510651, China
    College of Business, City University of Hong Kong, Kowloon 999077, Hong Kong, China)

Abstract

Despite the importance of green innovation, empirical evidence on its relationship with firm performance is mixed. This study endeavors to address this inconsistency in the evidence by investigating the value-capturing role of competitive strategy. It argues that firms tend to choose appropriate a competitive strategy to maximize performance of green innovation, especially in highly competitive contexts. We collected data from 195 firms in China. Our results suggest that the performance implications of green innovation (including green product innovation and green process innovation) are moderated by competitive strategies (including differentiation strategy and cost-leadership strategy), and these moderating effects are more prominent when competitive intensity is high. The findings of this study enrich theoretical understanding both of green innovation and of competitive strategy and have practical implications for green innovation management.

Suggested Citation

  • Jiawen Chen & Linlin Liu, 2018. "Profiting from Green Innovation: The Moderating Effect of Competitive Strategy," Sustainability, MDPI, vol. 11(1), pages 1-23, December.
    • Handle: RePEc:gam:jsusta:v:11:y:2018:i:1:p:15-:d:192031
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/1/15/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/1/15/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bruce Kogut & Udo Zander, 1992. "Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology," Organization Science, INFORMS, vol. 3(3), pages 383-397, August.
    2. Michael A. Hitt & R. Duane Ireland, 1985. "Corporate distinctive competence, strategy, industry and performance," Strategic Management Journal, Wiley Blackwell, vol. 6(3), pages 273-293, July.
    3. Bonanno, Giacomo & Haworth, Barry, 1998. "Intensity of competition and the choice between product and process innovation," International Journal of Industrial Organization, Elsevier, vol. 16(4), pages 495-510, July.
    4. Martie-Louise Verreynne & Denny Meyer, 2010. "Small business strategy and the industry life cycle," Small Business Economics, Springer, vol. 35(4), pages 399-416, November.
    5. Jing-Wen Huang & Yong-Hui Li, 2017. "Green Innovation and Performance: The View of Organizational Capability and Social Reciprocity," Journal of Business Ethics, Springer, vol. 145(2), pages 309-324, October.
    6. Céline Michaud & Daniel Llerena, 2011. "Green consumer behaviour: an experimental analysis of willingness to pay for remanufactured products," Business Strategy and the Environment, Wiley Blackwell, vol. 20(6), pages 408-420, September.
    7. Radha Chaganti & Rajeswararao Chaganti & Vijay Mahajan, 1989. "Profitable Small Business Strategies under Different Types of Competition," Entrepreneurship Theory and Practice, , vol. 13(3), pages 21-36, April.
    8. Zhongfeng Su (苏中锋) & Jisheng Peng (彭纪生) & Hao Shen (沈灏) & Ting Xiao (肖婷), 2013. "Technological Capability, Marketing Capability, and Firm Performance in Turbulent Conditions. 技术能力、市场能力与企业绩效：基于环境不确定性的研究," Management and Organization Review, The International Association for Chinese Management Research, vol. 9(1), pages 115-137, March.
    9. Dirk Czarnitzki & Federico Etro & Kornelius Kraft, 2014. "Endogenous Market Structures and Innovation by Leaders: An Empirical Test," Economica, London School of Economics and Political Science, vol. 81(321), pages 117-139, January.
    10. Michael A. Hitt & Beverly B. Tyler, 1991. "Strategic decision models: Integrating different perspectives," Strategic Management Journal, Wiley Blackwell, vol. 12(5), pages 327-351, July.
    11. Terlaak, Ann & King, Andrew A., 2006. "The effect of certification with the ISO 9000 Quality Management Standard: A signaling approach," Journal of Economic Behavior & Organization, Elsevier, vol. 60(4), pages 579-602, August.
    12. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    13. Christoph Zott & Raphael Amit, 2008. "The fit between product market strategy and business model: implications for firm performance," Strategic Management Journal, Wiley Blackwell, vol. 29(1), pages 1-26, January.
    14. Stuart L. Hart & Gautam Ahuja, 1996. "Does It Pay To Be Green? An Empirical Examination Of The Relationship Between Emission Reduction And Firm Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 5(1), pages 30-37, March.
    15. Dirk Boehe & Luciano Barin Cruz, 2010. "Corporate Social Responsibility, Product Differentiation Strategy and Export Performance," Journal of Business Ethics, Springer, vol. 91(2), pages 325-346, February.
    16. Leonidas C. Leonidou & Paul Christodoulides & Lida P. Kyrgidou & Dayananda Palihawadana, 2017. "Erratum to: Internal Drivers and Performance Consequences of Small Firm Green Business Strategy: The Moderating Role of External Forces," Journal of Business Ethics, Springer, vol. 140(3), pages 607-607, February.
    17. Gabriel Hawawini & Venkat Subramanian & Paul Verdin, 2003. "Is performance driven by industry‐or firm‐specific factors? A new look at the evidence," Strategic Management Journal, Wiley Blackwell, vol. 24(1), pages 1-16, January.
    18. Wenjing Nie & David Abler & Liqun Zhu & Taiping Li & Guanghua Lin, 2018. "Consumer Preferences and Welfare Evaluation under Current Food Inspection Measures in China: Evidence from Real Experiment Choice of Rice Labels," Sustainability, MDPI, vol. 10(11), pages 1-15, November.
    19. Beath,John & Katsoulacos,Yannis, 1991. "The Economic Theory of Product Differentiation," Cambridge Books, Cambridge University Press, number 9780521335522.
    20. Céline Michaud & Daniel Llerena, 2011. "Green consumer behaviour: an experimental analysis of willingness to pay for remanufactured products," Post-Print hal-01809083, HAL.
    21. Janine Fleith Medeiros & Gabriel Vidor & José Luís Duarte Ribeiro, 2018. "Driving Factors for the Success of the Green Innovation Market: A Relationship System Proposal," Journal of Business Ethics, Springer, vol. 147(2), pages 327-341, January.
    22. Frambach, R.T. & Prabhu, J.C. & Verhallen, T.M.M., 2003. "The influence of business strategy on new product activity : The role of market orientation," Other publications TiSEM 64c2e300-9f26-4178-ba34-2, Tilburg University, School of Economics and Management.
    23. Yu-Shan Chen, 2008. "The Driver of Green Innovation and Green Image – Green Core Competence," Journal of Business Ethics, Springer, vol. 81(3), pages 531-543, September.
    24. Rosa Dangelico & Devashish Pujari, 2010. "Mainstreaming Green Product Innovation: Why and How Companies Integrate Environmental Sustainability," Journal of Business Ethics, Springer, vol. 95(3), pages 471-486, September.
    25. Rosa Maria Dangelico, 2016. "Green Product Innovation: Where we are and Where we are Going," Business Strategy and the Environment, Wiley Blackwell, vol. 25(8), pages 560-576, December.
    26. Leonidas C. Leonidou & Paul Christodoulides & Lida P. Kyrgidou & Daydanda Palihawadana, 2017. "Internal Drivers and Performance Consequences of Small Firm Green Business Strategy: The Moderating Role of External Forces," Journal of Business Ethics, Springer, vol. 140(3), pages 585-606, February.
    27. Yu-Shan Chen & Shyh-Bao Lai & Chao-Tung Wen, 2006. "The Influence of Green Innovation Performance on Corporate Advantage in Taiwan," Journal of Business Ethics, Springer, vol. 67(4), pages 331-339, September.
    28. Yu-Shan Chen & Ke-Chiun Chang, 2013. "The nonlinear effect of green innovation on the corporate competitive advantage," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(1), pages 271-286, January.
    29. Auh, Seigyoung & Menguc, Bulent, 2005. "Balancing exploration and exploitation: The moderating role of competitive intensity," Journal of Business Research, Elsevier, vol. 58(12), pages 1652-1661, December.
    30. Prajogo, Daniel I., 2016. "The strategic fit between innovation strategies and business environment in delivering business performance," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 241-249.
    31. Yali Zhang & Jun Sun & Zhaojun Yang & Shurong Li, 2018. "Organizational Learning and Green Innovation: Does Environmental Proactivity Matter?," Sustainability, MDPI, vol. 10(10), pages 1-14, October.
    32. Ching-Hsun Chang, 2011. "The Influence of Corporate Environmental Ethics on Competitive Advantage: The Mediation Role of Green Innovation," Journal of Business Ethics, Springer, vol. 104(3), pages 361-370, December.
    33. Chiou, Tzu-Yun & Chan, Hing Kai & Lettice, Fiona & Chung, Sai Ho, 2011. "The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 822-836.
    34. Joern Block & Karsten Kohn & Danny Miller & Katrin Ullrich, 2015. "Necessity entrepreneurship and competitive strategy," Small Business Economics, Springer, vol. 44(1), pages 37-54, January.
    35. Raphael Amit, 1986. "Cost leadership strategy and experience curves," Strategic Management Journal, Wiley Blackwell, vol. 7(3), pages 281-292, May.
    36. Baoshan Ge & Yibing Yang & Dake Jiang & Yang Gao & Xiaomin Du & Tingting Zhou, 2018. "An Empirical Study on Green Innovation Strategy and Sustainable Competitive Advantages: Path and Boundary," Sustainability, MDPI, vol. 10(10), pages 1-18, October.
    37. Su, Zhongfeng & Peng, Jisheng & Shen, Hao & Xiao, Ting, 2013. "Technological Capability, Marketing Capability, and Firm Performance in Turbulent Conditions," Management and Organization Review, Cambridge University Press, pages 115-138.
    38. Su, Zhongfeng & Peng, Jisheng & Shen, Hao & Xiao, Ting, 2013. "Technological Capability, Marketing Capability, and Firm Performance in Turbulent Conditions," Management and Organization Review, Cambridge University Press, vol. 9(1), pages 115-137, March.
    39. Chan, Hing Kai & Yee, Rachel W.Y. & Dai, Jing & Lim, Ming K., 2016. "The moderating effect of environmental dynamism on green product innovation and performance," International Journal of Production Economics, Elsevier, vol. 181(PB), pages 384-391.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xinwei Li & Wenjuan Zeng & Mao Xu, 2022. "The Moderating Role of IT Capability on Green Innovation and Ambidexterity: Towards a Corporate Sustainable Development," Sustainability, MDPI, vol. 14(24), pages 1-20, December.
    2. Huishuang Su & Xintong Qu & Shuo Tian & Qiang Ma & Ling Li & Yong Chen, 2022. "Artificial intelligence empowerment: The impact of research and development investment on green radical innovation in high‐tech enterprises," Systems Research and Behavioral Science, Wiley Blackwell, vol. 39(3), pages 489-502, May.
    3. Georg M. Eichler & Erich J. Schwarz, 2019. "What Sustainable Development Goals Do Social Innovations Address? A Systematic Review and Content Analysis of Social Innovation Literature," Sustainability, MDPI, vol. 11(2), pages 1-18, January.
    4. I Nyoman Normal & Made Setini, 2022. "Absorption Capacity and Development of Photocatalyst Green Ceramic Products with Moderation of Green Environment for Sustainability Performance of Developing Industries," Sustainability, MDPI, vol. 14(17), pages 1-18, August.
    5. Rosita Capurro & Raffaele Fiorentino & Rubina Michela Galeotti & Stefano Garzella, 2023. "The Impact of Digitalization and Sustainability on Governance Structures and Corporate Communication: A Cross-Industry and Cross-Country Approach," Sustainability, MDPI, vol. 15(3), pages 1-27, January.
    6. Amanda Xavier & Tatiana Reyes & Améziane Aoussat & Leandro Luiz & Lucas Souza, 2020. "Eco-Innovation Maturity Model: A Framework to Support the Evolution of Eco-Innovation Integration in Companies," Sustainability, MDPI, vol. 12(9), pages 1-35, May.
    7. Paulius Šūmakaris & Kristina Kovaitė & Renata Korsakienė, 2023. "An Integrated Approach to Evaluating Eco-Innovation Strategies from the Perspective of Strategic Green Transformation: A Case of the Lithuanian Furniture Industry," Sustainability, MDPI, vol. 15(11), pages 1-33, June.
    8. Lu Zheng & Konstantinos Iatridis, 2022. "Friends or foes? A systematic literature review and meta‐analysis of the relationship between eco‐innovation and firm performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1838-1855, May.
    9. Hanyuan Liang & Guangliang Li & Weikun Zhang & Zhe Chen, 2022. "The Impact of Green Innovation on Enterprise Performance: The Regulatory Role of Government Grants," Sustainability, MDPI, vol. 14(20), pages 1-17, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Feng Zhang & Lei Zhu, 2019. "Enhancing corporate sustainable development: Stakeholder pressures, organizational learning, and green innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 28(6), pages 1012-1026, September.
    2. Morteza Akbari & Hamid Padash & Zahra Shahabaldini Parizi & Haniye Rezaei & Elmira Shahriari & Ala Khosravani, 2022. "A bibliometric review of green innovation research: identifying knowledge domain and network," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(6), pages 3993-4023, December.
    3. Tariq, Adeel & Badir, Yuosre F. & Tariq, Waqas & Bhutta, Umair Saeed, 2017. "Drivers and consequences of green product and process innovation: A systematic review, conceptual framework, and future outlook," Technology in Society, Elsevier, vol. 51(C), pages 8-23.
    4. Burcu Özgül & Cemal Zehir, 2023. "How Managers’ Green Transformational Leadership Affects a Firm’s Environmental Strategy, Green Innovation, and Performance: The Moderating Impact of Differentiation Strategy," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    5. Chen, Jiawen & Liu, Linlin, 2020. "Customer participation, and green product innovation in SMEs: The mediating role of opportunity recognition and exploitation," Journal of Business Research, Elsevier, vol. 119(C), pages 151-162.
    6. Woon Leong Lin & Azali Bin Mohamed & Murali Sambasivan & Nick Yip, 2020. "Effect of green innovation strategy on firm‐idiosyncratic risk: A competitive action perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 886-901, March.
    7. Michalis Skordoulis & Grigorios Kyriakopoulos & Stamatiοs Ntanos & Spyros Galatsidas & Garyfallos Arabatzis & Miltiadis Chalikias & Petros Kalantonis, 2022. "The Mediating Role of Firm Strategy in the Relationship between Green Entrepreneurship, Green Innovation, and Competitive Advantage: The Case of Medium and Large-Sized Firms in Greece," Sustainability, MDPI, vol. 14(6), pages 1-18, March.
    8. Lu Qiu & Xiaowen Jie & Yanan Wang & Minjuan Zhao, 2020. "Green product innovation, green dynamic capability, and competitive advantage: Evidence from Chinese manufacturing enterprises," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(1), pages 146-165, January.
    9. Chaiyawit Muangmee & Zdzisława Dacko-Pikiewicz & Nusanee Meekaewkunchorn & Nuttapon Kassakorn & Bilal Khalid, 2021. "Green Entrepreneurial Orientation and Green Innovation in Small and Medium-Sized Enterprises (SMEs)," Social Sciences, MDPI, vol. 10(4), pages 1-15, April.
    10. Yu Zhang & Yajuan Wang, 2022. "Do Managerial Ties Help or Hinder Corporate Green Innovation? The Moderating Roles of Contextual Factors," IJERPH, MDPI, vol. 19(7), pages 1-19, March.
    11. Ayça Kubra Hizarci‐Payne & İlayda İpek & Gülüzar Kurt Gümüş, 2021. "How environmental innovation influences firm performance: A meta‐analytic review," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1174-1190, February.
    12. Manjot Singh Bhatia, 2021. "Green process innovation and operational performance: The role of proactive environment strategy, technological capabilities, and organizational learning," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 2845-2857, November.
    13. Mingfeng Tang & Grace Walsh & Daniel Lerner & Markus A. Fitza & Qiaohua Li, 2018. "Green Innovation, Managerial Concern and Firm Performance: An Empirical Study," Business Strategy and the Environment, Wiley Blackwell, vol. 27(1), pages 39-51, January.
    14. Alpana Taneja & Vinay Goyal & Kunjana Malik, 2023. "Sustainability‐oriented innovations – Enhancing factors and consequences," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 2747-2765, November.
    15. Huang, Yi-Chun & Chen, Chih Ta, 2022. "Exploring institutional pressures, firm green slack, green product innovation and green new product success: Evidence from Taiwan's high-tech industries," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    16. Gema Albort-Morant & Jörg Henseler & Antonio Leal-Millán & Gabriel Cepeda-Carrión, 2017. "Mapping the Field: A Bibliometric Analysis of Green Innovation," Sustainability, MDPI, vol. 9(6), pages 1-15, June.
    17. Mert Gürlek & Muharrem Tuna, 2018. "Reinforcing competitive advantage through green organizational culture and green innovation," The Service Industries Journal, Taylor & Francis Journals, vol. 38(7-8), pages 467-491, June.
    18. Stanley Kam Sing Wong, 2013. "Environmental Requirements, Knowledge Sharing and Green Innovation: Empirical Evidence from the Electronics Industry in China," Business Strategy and the Environment, Wiley Blackwell, vol. 22(5), pages 321-338, July.
    19. Xinwei Li & Wenjuan Zeng & Mao Xu, 2022. "The Moderating Role of IT Capability on Green Innovation and Ambidexterity: Towards a Corporate Sustainable Development," Sustainability, MDPI, vol. 14(24), pages 1-20, December.
    20. Shuang Meng & Pengxiang Wang & Jiajie Yu, 2022. "Going Abroad and Going Green: The Effects of Top Management Teams’ Overseas Experience on Green Innovation in the Digital Era," IJERPH, MDPI, vol. 19(22), pages 1-20, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2018:i:1:p:15-:d:192031. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.