Modeling the significance of green orientation and culture on green innovation performance: moderating effect of firm size and green implementation

The current global trend in sustainable business practices is to optimize green innovation performance. To protect the environment and maintain their own survival, organizations must strengthen their green innovation capabilities. Drawing on the recourse-based view and ecology modernization theory (EMT), this study examines the direct effect of green strategic orientations, green entrepreneurial orientation, green market orientation, green innovation orientation, and green organizational culture on the firm’s green innovation capability, as well as the mediating effect of green innovation capability on the relationship of these four factors and green innovation performance. Besides, this study also explored the moderating effects of green management system implementation and firm size on the association between green innovation capability and green innovation performance. To test the hypothesized model, a questionnaire survey was administered to gather responses from 293 medium-sized and large manufacturing firms operating in Pakistan. The partial least squares method was used for data analysis. The results revealed that green entrepreneurial orientation, green market orientation, green innovation orientation, and green organizational culture positively impacted green innovation capability, which subsequently positively influenced green innovation performance. Moreover, effective implementation of green management systems can bolster the effect of green innovation capability on green innovation performance, and the mediating effect of green innovation capability has also been confirmed. These indicated that the management of medium and large manufacturing firms operating in Pakistan should focus on encouraging green innovation and training employees regarding the latest eco-friendly technologies to attain performance and sustainable development goals. Policymakers should implement green business development programs and offer rewards or penalties for promoting compliance. The present study contributes greatly to the literature by applying EMT as an alternative to address the mediating role of green innovation capability and the moderating effect of green management system implementation in enhancing firms’ green innovation performance.