IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i13p8192-d855913.html
   My bibliography  Save this article

Green Innovation Sustainability: How Green Market Orientation and Absorptive Capacity Matter?

Author

Listed:
  • Yueping Du

    (School of Economic and Management, Xidian University, Xi’an 710126, China)

  • Huanhuan Wang

    (School of Economic and Management, Xidian University, Xi’an 710126, China)

Abstract

Although there has been much research into green innovation, limited studies focus on the influence of internal factors on green innovation. This paper investigates whether and how two internal factors, such as green market orientation and absorptive capacity, facilitate green innovation. By dividing green innovation into green product innovation and process innovation, we also test the differential effects of the two internal factors on green product innovation and process innovation. Using a survey of 262 manufacturing firms in China, our results show that green market orientation improves only green product innovation, not green process innovation, whereas green absorptive capacity improves green product innovation and process innovation simultaneously. Green market orientation (green absorptive capacity) has a stronger impact on green product (process) innovation than on green process (product) innovation. Further, we find that a positive interaction effect of green market orientation and absorptive capacity on green product innovation and process innovation is significant. The findings contribute to the green innovation literature by providing an integrated framework for exploring whether the pursuit of green market intelligence and technological knowledge improves green product innovation and process innovation.

Suggested Citation

  • Yueping Du & Huanhuan Wang, 2022. "Green Innovation Sustainability: How Green Market Orientation and Absorptive Capacity Matter?," Sustainability, MDPI, vol. 14(13), pages 1-20, July.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:13:p:8192-:d:855913
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/13/8192/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/13/8192/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Horbach, Jens & Rammer, Christian & Rennings, Klaus, 2012. "Determinants of eco-innovations by type of environmental impact — The role of regulatory push/pull, technology push and market pull," Ecological Economics, Elsevier, vol. 78(C), pages 112-122.
    2. Menguc, Bulent & Ozanne, Lucie K., 2005. "Challenges of the "green imperative": a natural resource-based approach to the environmental orientation-business performance relationship," Journal of Business Research, Elsevier, vol. 58(4), pages 430-438, April.
    3. Ding, Jinxiu & Lu, Zhe & Yu, Chin-Hsien, 2022. "Environmental information disclosure and firms’ green innovation: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 81(C), pages 147-159.
    4. Stefan Ambec & Mark A. Cohen & Stewart Elgie & Paul Lanoie, 2013. "The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 2-22, January.
    5. Pernilla Gluch & Mathias Gustafsson & Liane Thuvander, 2009. "An absorptive capacity model for green innovation and performance in the construction industry," Construction Management and Economics, Taylor & Francis Journals, vol. 27(5), pages 451-464.
    6. Shamim Akhtar & José Moleiro Martins & Pedro Neves Mata & Hongyun Tian & Shumaila Naz & Maria Dâmaso & Ricardo Simões Santos, 2021. "Assessing the Relationship between Market Orientation and Green Product Innovation: The Intervening Role of Green Self-Efficacy and Moderating Role of Resource Bricolage," Sustainability, MDPI, vol. 13(20), pages 1-15, October.
    7. Richard R. Nelson & Sidney G. Winter, 2002. "Evolutionary Theorizing in Economics," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 23-46, Spring.
    8. Mahabubur Rahman & Saqib Aziz & Mathew Hughes, 2020. "The product‐market performance benefits of environmental policy: Why customer awareness and firm innovativeness matter," Post-Print hal-03004777, HAL.
    9. Neil A. Morgan & Douglas W. Vorhies & Charlotte H. Mason, 2009. "Market orientation, marketing capabilities, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 30(8), pages 909-920, August.
    10. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    11. 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.
    12. Ziegler, Andreas & Seijas Nogareda, Jazmin, 2009. "Environmental management systems and technological environmental innovations: Exploring the causal relationship," Research Policy, Elsevier, vol. 38(5), pages 885-893, June.
    13. Larissa Marchiori Pacheco & Marlon Fernandes Rodrigues Alves & Lara Bartocci Liboni, 2018. "Green absorptive capacity: A mediation‐moderation model of knowledge for innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1502-1513, December.
    14. 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.
    15. Enrique Loredo & Nuria Lopez-Mielgo & Gustavo Pineiro-Villaverde & María Teresa García-Álvarez, 2019. "Utilities: Innovation and Sustainability," Sustainability, MDPI, vol. 11(4), pages 1-13, February.
    16. David J. Ketchen & G. Tomas M. Hult & Stanley F. Slater, 2007. "Toward greater understanding of market orientation and the resource‐based view," Strategic Management Journal, Wiley Blackwell, vol. 28(9), pages 961-964, September.
    17. Lu Qiu & Die Hu & Yu Wang, 2020. "How do firms achieve sustainability through green innovation under external pressures of environmental regulation and market turbulence?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2695-2714, September.
    18. 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.
    19. Papadas, Karolos-Konstantinos & Avlonitis, George J. & Carrigan, Marylyn, 2017. "Green marketing orientation: Conceptualization, scale development and validation," Journal of Business Research, Elsevier, vol. 80(C), pages 236-246.
    20. Demirel, Pelin & Kesidou, Effie, 2011. "Stimulating different types of eco-innovation in the UK: Government policies and firm motivations," Ecological Economics, Elsevier, vol. 70(8), pages 1546-1557, June.
    21. Bhattarai, Charan Raj & Kwong, Caleb C.Y. & Tasavori, Misagh, 2019. "Market orientation, market disruptiveness capability and social enterprise performance: An empirical study from the United Kingdom," Journal of Business Research, Elsevier, vol. 96(C), pages 47-60.
    22. Rakthin, Sirisuhk & Calantone, Roger J. & Wang, Joyce Feng, 2016. "Managing market intelligence: The comparative role of absorptive capacity and market orientation," Journal of Business Research, Elsevier, vol. 69(12), pages 5569-5577.
    23. Fang, Zhenming & Kong, Xiaoran & Sensoy, Ahmet & Cui, Xin & Cheng, Feiyang, 2021. "Government’s awareness of Environmental protection and corporate green innovation: A natural experiment from the new environmental protection law in China," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 294-312.
    24. Najafi-Tavani, Saeed & Sharifi, Hossein & Najafi-Tavani, Zhaleh, 2016. "Market orientation, marketing capability, and new product performance: The moderating role of absorptive capacity," Journal of Business Research, Elsevier, vol. 69(11), pages 5059-5064.
    25. Brenes, Esteban R. & Montoya, Daniel & Ciravegna, Luciano, 2014. "Differentiation strategies in emerging markets: The case of Latin American agribusinesses," Journal of Business Research, Elsevier, vol. 67(5), pages 847-855.
    26. Xie, Xuemei & Huo, Jiage & Zou, Hailiang, 2019. "Green process innovation, green product innovation, and corporate financial performance: A content analysis method," Journal of Business Research, Elsevier, vol. 101(C), pages 697-706.
    27. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    28. Yang Chen & Guiyao Tang & Jiafei Jin & Ji Li & Pascal Paillé, 2015. "Linking Market Orientation and Environmental Performance: The Influence of Environmental Strategy, Employee’s Environmental Involvement, and Environmental Product Quality," Journal of Business Ethics, Springer, vol. 127(2), pages 479-500, March.
    29. Mahabubur Rahman & Saqib Aziz & Mathew Hughes, 2020. "The product‐market performance benefits of environmental policy: Why customer awareness and firm innovativeness matter," Business Strategy and the Environment, Wiley Blackwell, vol. 29(5), pages 2001-2018, July.
    30. Shuizheng Song & Md Altab Hossin & Xiaohua Yin & Md Sajjad Hosain, 2021. "Accelerating Green Innovation Performance from the Relations of Network Potential, Absorptive Capacity, and Environmental Turbulence," Sustainability, MDPI, vol. 13(14), pages 1-26, July.
    31. Yu-Shan Chen & Yu-Hsien Lin & Ching-Ying Lin & Chih-Wei Chang, 2015. "Enhancing Green Absorptive Capacity, Green Dynamic Capacities and Green Service Innovation to Improve Firm Performance: An Analysis of Structural Equation Modeling (SEM)," Sustainability, MDPI, vol. 7(11), pages 1-19, November.
    32. Ghantous, Nabil & Alnawas, Ibrahim, 2020. "The differential and synergistic effects of market orientation and entrepreneurial orientation on hotel ambidexterity," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    33. Yu-Shan Chen & Ching-Hsun Chang & Yu-Hsien Lin, 2014. "The Determinants of Green Radical and Incremental Innovation Performance: Green Shared Vision, Green Absorptive Capacity, and Green Organizational Ambidexterity," Sustainability, MDPI, vol. 6(11), pages 1-20, November.
    34. Seok‐Beom Choi & Yunting Feng & Junjun Liu & Qinghua Zhu, 2019. "Motivating corporate social responsibility practices under customer pressure among small‐ and medium‐sized suppliers in China: The role of dynamic capabilities," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(1), pages 213-226, January.
    35. Chao Hung Wang, 2020. "An environmental perspective extends market orientation: Green innovation sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3123-3134, December.
    36. Giada Di Stefano & Alfonso Gambardella & Gianmario Verona, 2012. "Technology Push and Demand Pull Perspectives in Innovation Studies: Current Findings and Future Research Directions," Post-Print hal-00696607, HAL.
    37. Zhou, Min & Govindan, Kannan & Xie, Xiongbiao & Yan, Liang, 2021. "How to drive green innovation in China's mining enterprises? Under the perspective of environmental legitimacy and green absorptive capacity," Resources Policy, Elsevier, vol. 72(C).
    38. Di Stefano, Giada & Gambardella, Alfonso & Verona, Gianmario, 2012. "Technology push and demand pull perspectives in innovation studies: Current findings and future research directions," Research Policy, Elsevier, vol. 41(8), pages 1283-1295.
    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. Zhengke Du & Chengcheng Zhu & Yuxin Zhou, 2022. "Increasing Quantity or Improving Quality: Can Soil Pollution Control Promote Green Innovation in China’s Industrial and Mining Enterprises?," Sustainability, MDPI, vol. 14(22), pages 1-19, November.
    2. Shanshan Gao & Wenqi Li & Jiayi Meng & Jianfeng Shi & Jianhua Zhu, 2023. "A Study on the Impact Mechanism of Digitalization on Corporate Green Innovation," Sustainability, MDPI, vol. 15(8), pages 1-21, April.
    3. Shichang Liang & Min Zhang & Yuxuan Chu & Lingling He, 2022. "Should “Green” Be Precise? The Effect of Information Presentation on Purchasing Intention of Green Products," Sustainability, MDPI, vol. 14(16), pages 1-16, August.
    4. Raghuveer Negi & Amit Kumar Gupta & Vidhu Gaur, 2023. "Effect of green marketing orientation dimensions on green innovation and organizational performance: A mediation‐moderation analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5435-5458, December.

    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. Achi, Awele & Adeola, Ogechi & Achi, Francis Chukwuedo, 2022. "CSR and green process innovation as antecedents of micro, small, and medium enterprise performance: Moderating role of perceived environmental volatility," Journal of Business Research, Elsevier, vol. 139(C), pages 771-781.
    2. Die Hu & Lu Qiu & Maoyan She & Yu Wang, 2021. "Sustaining the sustainable development: How do firms turn government green subsidies into financial performance through green innovation?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2271-2292, July.
    3. Meng Li & Zengrui Tian & Qian Liu & Yuzhong Lu, 2022. "Literature Review and Research Prospect on the Drivers and Effects of Green Innovation," Sustainability, MDPI, vol. 14(16), pages 1-23, August.
    4. Chao Hung Wang, 2020. "An environmental perspective extends market orientation: Green innovation sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3123-3134, December.
    5. Lu Qiu & Die Hu & Yu Wang, 2020. "How do firms achieve sustainability through green innovation under external pressures of environmental regulation and market turbulence?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2695-2714, September.
    6. Nieves Arranz & Marta Arroyabe & Jun Li & Juan Carlos Fernandez de Arroyabe, 2020. "Innovation as a driver of eco‐innovation in the firm: An approach from the dynamic capabilities theory," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1494-1503, March.
    7. Yuan, Baolong & Cao, Xueyun, 2022. "Do corporate social responsibility practices contribute to green innovation? The mediating role of green dynamic capability," Technology in Society, Elsevier, vol. 68(C).
    8. Zhang Xiaoyi & Hailan Yang & Nilesh Kumar & Maqsood H. Bhutto & Wang Kun & Tianyang Hu, 2023. "Assessing Chinese Textile and Apparel Industry Business Sustainability: The Role of Organization Green Culture, Green Dynamic Capabilities, and Green Innovation in Relation to Environmental Orientatio," Sustainability, MDPI, vol. 15(11), pages 1-21, May.
    9. 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.
    10. Eduardo Duque‐Grisales & Javier Aguilera‐Caracuel & Jaime Guerrero‐Villegas & Encarnación García‐Sánchez, 2020. "Does green innovation affect the financial performance of Multilatinas? The moderating role of ISO 14001 and R&D investment," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3286-3302, December.
    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. Wenbo Jiang & Francesco Rosati & Huaqi Chai & Taiwen Feng, 2020. "Market orientation practices enhancing corporate environmental performance via knowledge creation: Does environmental management system implementation matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(5), pages 1899-1924, July.
    14. Jakeline Serrano‐García & Andrea Bikfalvi & Josep Llach & Juan José Arbeláez‐Toro, 2022. "Capabilities and organisational dimensions conducive to green product innovation: Evidence from Croatian and Spanish manufacturing firms," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 2767-2785, November.
    15. Chotia, Varun & Cheng, Yue & Agarwal, Reeti & Vishnoi, Sushant Kumar, 2024. "AI-enabled Green Business Strategy: Path to carbon neutrality via environmental performance and green process innovation," Technological Forecasting and Social Change, Elsevier, vol. 202(C).
    16. Magdalena Pichlak, 2021. "The Drivers of Technological Eco-Innovation—Dynamic Capabilities and Leadership," Sustainability, MDPI, vol. 13(10), pages 1-17, May.
    17. John Enrique Sánchez Otero & Jaider Manuel Vega Jurado & Joaquín Alegre Vidal, 2023. "Factors that Influence the Development of Innovations with a Social Focus in the Firm: A Systematic Literature Review," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 24(3), pages 341-360, September.
    18. Jianming Zhang & Gongqian Liang & Taiwen Feng & Chunlin Yuan & Wenbo Jiang, 2020. "Green innovation to respond to environmental regulation: How external knowledge adoption and green absorptive capacity matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(1), pages 39-53, January.
    19. Giovanni Marin & Alberto Marzucchi & Roberto Zoboli, 2015. "SMEs and barriers to Eco-innovation in the EU: exploring different firm profiles," Journal of Evolutionary Economics, Springer, vol. 25(3), pages 671-705, July.
    20. 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.

    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:14:y:2022:i:13:p:8192-:d:855913. 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.