Mediating role of green competitive advantage in the relationship between green product innovation and firms’ sustainable performance

PurposeThis study aims to examine the effects of green product innovation (GPDI) on firms’ sustainable performance (SP) through the mediating role of green competitive advantage (GCA).Design/methodology/approachUsing a purposive sampling technique, data were collected from 271 plant managers, human resource and compliance managers and production managers, using both online and offline survey methods. The partial least squares structural equation modeling (PLS-SEM) approach was applied to analyze the data.FindingsThe empirical research findings revealed a significant positive correlation between GPDI and firms’ SP. Likewise, it was identified that firms’ GPDI is also an essential determinant for attaining GCA in the market. The research results also indicated that firms with GCA have an advantage in enhancing their SP. Finally, the research findings concluded that GCA is a complementary partial mediator in the relationship between GPDI and firms’ SP.Originality/valueThe literature has overlooked the mediating role of GCA in the relationship between GPDI and firms’ SP. This study contributes to the existing body of knowledge about green innovation practices and firms’ SP. It also offers practical implications for enhancing firms’ SP in the garment industry in Bangladesh and similar emerging markets. Furthermore, this study offers valuable insights for policymakers, businesspeople, academicians, governments and other stakeholders, highlighting the essence of integrating green innovation practices in business operations to ensure firms’ SP by achieving GCA over competitors in the highly competitive business market.