Received: 1 January 2021
Revised: 21 March 2021
Accepted: 7 April 2021
DOI: 10.1002/bse.2800
RESEARCH ARTICLE
An environmental policy of green intellectual capital: Green
innovation strategy for performance sustainability
Chao Hung Wang
|
Wei-Jr Juo
Marketing and Logistics Management, Ling
Tung University, Taichung, Taiwan
Abstract
This study examines how green intellectual capital (GIC) affects economic and green
Correspondence
Chao Hung Wang, Ph. D. Professor, Marketing
and Logistics Management, Ling Tung
University, #1 Ling Tung Rd., Nantun,
Taichung 40852, Taiwan.
Email: chw@mail.ltu.edu.tw
Funding information
Ministry of Science and Technology, Grant/
Award Number: MOST 109-2410-H-275-003
performance through green innovation. We show ways in which a firm's performance
is influenced by three dimensions of GIC, that is, green human capital (GHC), green
relational capital (GRC), and green structural capital (GSC), and use the mediating role
of green innovation to explain the relationships. The results of a survey conducted
on 138 high-tech firms indicate that the three GIC constructs positively affect
economic performance, green performance, and green innovation, respectively.
Further analysis finds that green innovation fully mediates the linkage of GHC–
economic performance and GSC–green performance and partially mediates the linkage of GRC–economic performance and GRC–green performance. We find that
green innovation does not mediate the linkage of GSC–economic performance and
GHC–green performance, and this contributes towards business strategy and implementation of green innovation practices.
KEYWORDS
green human capital, green innovation, green intellectual capital, green relational capital,
green structural capital
1
|
I N T RO DU CT I O N
benefits from certain green practices (Baker & Sinkula, 2005). Studies
on environmental issues and corporate performance suggest that the
Recently, there has been increased academic debate and concern with
relationship may be complex (Cronin et al., 2011). However, few
environmental sustainability (Hsueh, 2019). More than a century of
studies both analyze how firms translate their environmental strate-
rapid economic development has come at the price of global warming,
gies into economic performance and identify critical resources they
water pollution, and deforestation, which are now critical global envi-
need to improve green performance. Even more than tangible
ronmental problems (Jin et al., 2020). Despite debate over whether to
resources, intangible assets, commonly defined as intellectual capital
be green or non-green (e.g., Calza et al., 2021; Cuerva et al., 2014),
(IC), are a critical asset (Agostini et al., 2017). Thus, this paper both
businesses have recognized the need to respond appropriately to the
ascertains that green intellectual capital (GIC) allows firms to improve
perceived trade-off between sustainable green view and economic
their economic performance and investigates paths of influence for
performance. Though environmental sustainability is often considered
different dimensions of GIC on a firm's green performance.
a corporate goal, the relationship between environmental protection
Two basic shortcomings can be detected in the research to date.
and industrial strategy has generally been viewed as a trade-off
On the one hand, few studies other than Chen (2008a, 2008b), Yong
between green performance and economic benefits. Research on this
et al. (2019), and Yusoff et al. (2019) have analyzed IC based on envi-
field is still limited.
ronmental issues. GIC, first proposed by Chen (2008a, 2008b), refers
Most studies have assumed that environmental strategy reduces
to the sum of intangible resources or knowledge associated with envi-
firms' economic performance (e.g., Aguilera-Caracuel & Ortiz-
ronmental protection or innovation (Chang & Chen, 2012; Huang &
de-Mandojana, 2013). But more recent research recognizes tangible
Kung, 2011). The literature suggests that there will be contradictory
Bus Strat Env. 2021;1–14.
wileyonlinelibrary.com/journal/bse
© 2021 ERP Environment and John Wiley & Sons Ltd.
1
2
WANG AND JUO
effects of GIC on a firm's performance depending on the GIC dimen-
factors (e.g., Chang, 2011; Marin & Lotti, 2017). Some studies have
sion analyzed, an issue yet to be resolved (Chaudhry & Bilal, 2016).
explored the intangible knowledge that affects green innovation, and
On the other hand, although IC at the firm level has received
they have identified GIC as a vital factor enabling green innovation
much research (e.g., Soewarno & Tjahjadi, 2020), these studies do not
(Delgado-Verde et al., 2014; Doran & Ryan, 2016). However, few
clarify how GIC influences performance because they do not incorpo-
studies have explored the mechanism through which GIC stimulates
rate environmental strategies into IC (Sharabati et al., 2010). This
green innovation. This paper offers a resolution to the ambiguity
leaves many questions open, particularly on environmental issues and
surrounding the divergent effects of each dimension of GIC on the
mediating effect issues. In line with this logic, Chen (2008a, 2008b)
performance. It contributes to the debate on GIC, firstly, by
stressed the importance of investigating how GIC drives economic
decomposing the GIC that influences economic and green perfor-
and green performance. Furthermore, to improve our understanding
mance in high-tech industry and, secondly, by analyzing the mediating
of this particular research issue and fill this important gap in our
effect of green innovation to clarify the relationship between GIC and
knowledge, this paper questions whether green innovation mediates
performance. Figure 1 presents a theoretical model of the underlying
the link between GIC and performance.
processes through which subconstructs of GIC lead to green innova-
To fill this gap in the literature, the present paper analyzes GIC to
tion and thus increase performance.
advance our understanding of the process by which a high-tech firm's
performance is influenced by green innovation. Specifically, green
innovation highlights GIC–performance linkage. Green innovation
2
LI T E RA T U R E A N D H Y P O T H ES ES
|
refers to innovations that mitigate the negative impact on the environment due to operations, using improved technologies, systems,
The hypotheses accord with the natural resource view (Hart, 1995) of
and
Singh
the firm by anticipating a positive contribution of GIC as a strategic
et al., 2020). Green innovation is differentiated from traditional tech-
asset and accord with the stakeholder theory (Tang & Tang, 2012) by
nological innovation by its emphasis on reducing environmental
measuring future firm performance by the added value.
management
practices
(Roper
&
Tapinos,
2016;
impacts. Green innovation is based on a prior theoretical background.
Institutional theory (Y. Li, 2014) argues that if firms want to ensure
their legitimacy and access to green resources, they must comply with
2.1
|
GIC and economic performance
environmental regulations and rules. Moreover, firms tend to implement green policies (i.e., GIC) to develop and maintain performance.
GIC is considered crucial to the competitiveness of high-tech industries
The importance of green innovation will intervene in that relationship.
because it is a critical resource for knowledge-intensive businesses and
In other words, once firms have identified their GIC, they will imple-
organizational performance relies on IC. What are the different compo-
ment green innovation to help enhance this GIC. In turn, performance
nents of IC? A consensus on how to classify the different components
is enhanced by providing critical feedback on underlying green inno-
of IC has not yet been reached in the literature. Edvinsson and
vation to help a firm more efficiently manage the GIC. This suggests
Malone (1997) posit IC as a two-level construct of human capital
that the GIC will impact performance indirectly through importance
(HC) and structural capital (SC), with SC divided into organization capi-
placed on the use of green innovation. The role of green
tal and customer capital. Bontis (1998) discusses customer capital as
innovation can resolve existing doubts about how the GIC influences
one aspect of what he calls “relational capital” (RC), similar to what
performance.
referred to as external social capital in management theory (Tsai &
Due to the growing importance of green innovation, many studies
Ghoshal, 1998; Wernerfelt, 1995). But from an overview of the litera-
have explored the internal and external factors affecting it (e.g., Arfi
ture, although the labels for various IC components may differ, there
et al., 2018). Some of these studies have explored external factors
appears to be a general consensus that IC is composed of HC, SC, and
(e.g., Lin et al., 2014); other researchers have explored the internal
RC. Our study follows this view and classifies GIC into three
FIGURE 1
Proposal model
3
WANG AND JUO
subconstructs: green human capital (GHC), green structural capital
green performance. Green performance is defined as the degree to
(GSC), and green relational capital (GRC). GHC refers to the knowledge,
which a firm's activities are friendly to the environment (Pipatprapa
capabilities, and attitudes of employees regarding environmental safety
et al., 2017). In theory, if a firm's stock of GHC is higher, its green
and proper management of environmental issues. Similarly, GSC refers
performance will also be higher (Yusoff et al., 2020). GHC is both sup-
to the organizational culture, corporate image, and managerial capabili-
portive and necessary for success because employee knowledge and
ties for environmental management and development. In addition, GRC
skill are essential for environmental issues (Ahmad & Ahmed, 2016).
is crucial for an organization's environmental management. GRC refers
Firms that want to improve their environmentally friendly perfor-
to collaboration with external partners on environmental strategies
mance need employees who have excellent environmental problem-
(Chen, 2008a, 2008b; Yong et al., 2019; Yusoff et al., 2019). Thus, if
solving skills. Thus, a firm's GHC will be an important driver of its
high-tech firms invest heavily in GIC through their employees' environ-
green performance (Yusoff et al., 2019).
mental knowledge, organizational green culture, and other partnerships,
We propose that partnership is important for green performance,
they can leverage GIC strategies to support sustained economic
and a social exchange theory provides the rationale for such interac-
performance (McDowell et al., 2018).
tion because strong GRC usually engenders close interaction between
If a firm robustly implements GHC, employees will have enough
partners (Chiou et al., 2011). More specifically, we argue that such
knowledge to deal with environmental issues. One of the main
interaction may significantly increase the ability of a firm to success-
aspects affecting GHC is employees' green knowledge quality. The
fully deal with environmental problems (Yawar & Seuring, 2017). In
management literature often posits that qualified GHC increases orga-
this context, close and intense interaction between partners is an
nizational readiness for creating business benefits because a more
effective means for them to help each other avoid environmental
aware workforce will have better green skills to deal with environ-
harm and better address environmental challenges.
mental issues and thereby sustain economic performance (Pellegrini
et al., 2018).
Although high-tech firms may have environmental objectives as a
high priority (Y. Yu & Huo, 2019; W. Yu et al., 2017), they need to
Frequent reciprocal interaction with external partners could
integrate environmental management with their corporate goals,
encourage firms and their partners to exchange more resources and
culture, and strategies (Peng & Lin, 2008). High-tech firms that imple-
establish stronger relationships (Kohtamäki et al., 2012). These stron-
ment GSC send a strong signal to their stakeholders that they
ger relationships could generate positive externalities that can
recognize the importance of environmental challenges. This can dem-
improve
theory
onstrate care for the ecosystem and also show that they see GSC as
(Dore, 1983) also emphasizes the importance of partner relationships
an internal resource that can achieve environmental objectives and
and ties based on a firm's interdependent networks. Collaborative
green performance (Gürlek & Tuna, 2018; Wang, 2019). Thus, we
networks for mutual economic benefits significantly depend on the
posit that:
economic
performance.
Relational
exchange
strength of relationship ties in a network (Salman & Saives, 2005).
GRC, as defined, resides upon close interaction between partners.
H2a. GHC has a positive impact of green performance.
Thus, we posit that GRC has important economic performance implications for the firm.
H2b. GRC has a positive impact of green performance.
GSC is embedded within organizational green culture value,
reflecting the external environmental focuses of the firm, as well as
H2c. GSC has a positive impact of green performance.
renewal and development economic performance for the future. A
firm with strong GSC will reach its fullest environmental strategy
potential and will have a supportive culture to create and leverage
2.3
|
GIC and green innovation
knowledge to improve its economic performance. Thus, we posit that
a firm's adoption of GSC strategies will improve economic perfor-
HC, according to Subramaniam and Youndt (2005), is a key resource
mance (Lee & Kim, 2011; Lioukas & Reuer, 2015).
for organizational innovation because the knowledge held by
employees is important to sustain a firm in the context of current rap-
H1a. GHC has a positive impact of economic performance.
idly evolving technology. Accordingly, there is likely to be greater motivation for employees to use green knowledge for green innovation.
H1b. GRC has a positive impact of economic performance.
Differentiation through the need for GHC investment may stimulate
significant green innovation. If a firm has a higher level of GHC, there
H1c. GSC has a positive impact of economic performance.
will be more significant success in green innovation (Singh et al., 2020).
We argue that GHC acts as a platform to connect employee environmental knowledge to green innovation, so firms will leverage their GHC
2.2
|
GIC and green performance
potentialities for green process and product innovation.
In a knowledge economy, green innovation is a social process, not
Because organizations must consider environmental effects of their
the domain of isolated individuals. According to Hart (1995), environ-
activities, they should understand the role of GHC and its effect on
mental practices involve intangible managerial innovations and
4
WANG AND JUO
routines that entail firms' commitment to the improvement of natural
environment. Pioneering innovations in environmental know-how,
2.5 | Green innovation mediates the linkage of
GIC–economic performance
capabilities, and experience required for the valuable relationships
between the firm and the other collaborators should be embedded in
A firm's economic performance being influenced by its GHC is not a
the firm. This can foster collective innovation knowledge and enhance
new concept, but for a precise understanding of the significance
the achievement of green innovation. Therefore, firms with GRC can
GHC's role is in determining economic performance, the role of green
develop new environmental technologies, ideas, and opportunities
innovation should be considered (Aguilera-Caracuel & Ortiz-
within a collaborative network (Dickel et al., 2018).
de-Mandojana, 2013). Green innovation enables firms to formulate
A firm with poor systems and environmental culture would
timely policies to ensure environmental strategy efficiencies. We thus
be unable to achieve green innovation. Thus, with environmental
examine green innovation due to its likely role as a catalyst. In particu-
knowledge integration at the organizational level, a firm recognizes a
lar, GHC that is more concerned with green issues is apt to help green
strong supportive environment culture that motivates it to acquire
innovation increase firm economic performance (Dangelico, 2016;
new environmental knowledge and implement green innovation
Papagiannakis et al., 2014). Hence, the higher a firm's stock of GHC,
(Maurer et al., 2011). Furthermore, when valuable environmental
the more successful the firm will be and the greater economic perfor-
protection knowledge is codified, it can be systematically transmitted
mance over rivals will be.
and disseminated within the organization, so it can be used for green
innovation (García-Machado & Martínez-Avila,
2019).
green innovation because it supports creatively and inspires new
GRC posited that collaboration with external partners can drive
knowledge and ideas. Through green innovation, firms proactively
H3a. GHC has a positive impact of green innovation.
strategize and implement a collaborative effect for improving the economic performance (Tang et al., 2018). Furthermore, green innovation
H3b. GRC has a positive impact of green innovation.
requires more external green knowledge and intelligence than general
innovation, so if firms seek external sources of green information and
H3c. GSC has a positive impact of green innovation.
engage in green innovation activities in cooperation with external
partners in order to leverage economic performance, this will increase
economic performance (Marra et al., 2020).
2.4
|
Green innovation and performance
Firms can utilize their organizational culture and managerial capabilities and integrate environmental concerns to enhance their eco-
Firms pioneering in green innovation may be able to sustain competi-
nomic performance. GSC is a key driver for successfully implementing
tive advantages. A green innovation strategy encourages efficient use
green innovation (Delgado-Verde et al., 2014). In other words, GSC
of raw material, resulting in lower costs for material and waste
impacts economic performance through the use of green innovation.
disposal (Zhang et al., 2020). Green innovation may lead firms to find
This is because green innovation often requires improvements in raw
new ways of incorporating waste into saleable products that provide
materials or components used and produces also an environmental
additional revenue (Bassetti et al., 2021). Thus, successful green
positive externality. Thus, firms implement GSC strategy to include
innovation helps firms to increase efficiency and strengthen their core
green innovation that will reduce their pollution costs and negative
competences, which may eventually improve their economic
impacts on the environment (Gürlek & Tuna, 2018), which in turn will
performance (Khurshid et al., 2019).
positively affect economic performance.
Improving green performance requires a firm to discover alternatives for doing business without compromising economic performance.
Green innovation gives a firm the opportunity to develop ecological
H5a. Green innovation mediates the relationship between GHC and
economic performance.
improvements distinct from traditional resources (Ketata et al., 2015).
Green innovation can provide a firm's green performance that more
efficient use of materials and energy reduces environmental impacts
H5b. Green innovation mediates the relationship between GRC and
economic performance.
(Dangelico, 2016). Green innovation is an innovative capability for environmental management that can increase a firm's ability to develop
green products and process innovation. In turn, this helps to improve a
H5c. Green innovation mediates the relationship between GSC and
economic performance.
firm's green image and thus its green performance. Thus, green innovation is considered to be a valuable asset for firms that contributes to
superior green performance (Lee & Min, 2015). Hence, we posit that:
H4a. Green innovation has a positive impact of
2.6 | Green innovation mediates the linkage of
GIC–green performance
economic
performance.
The knowledge-based view (KBV) of the firm, in which competitiveness is based on exploiting a firm's capabilities, was developed from
H4b. Green innovation has a positive impact of green performance.
the work of Grant (1996) on individual knowledge. Firms exposed to
5
WANG AND JUO
stringent environmental regulation are highly receptive to the impor-
means that high-tech firms need to diversify and innovate to enhance
tance of GHC; and firms using GHC based on the assets of employees'
their competitive position, and this fast-changing environment can
knowledge, capabilities, and creativity towards environment protec-
produce more severe environmental deterioration than traditional
tion are more likely to adopt a green innovation strategy because they
industries. Secondly, the Taiwanese high-tech industry is appropriate
understand that such a strategy will make a significant contribution to
because Taiwan high-tech firms have recently been accused of envi-
their green performance. Therefore, GHC enables a firm to recognize
ronmentally irresponsible actions (Hsu et al., 2006; Tu & Lee, 2009).
its intangible assets (i.e., employees' green knowledge) and can help
Faced
implement green innovation under dynamic environmental pressure
Taiwanese high-tech firms can play a key role in environmental man-
to perform better and, in turn, sustain green performance.
agement to ensure compliance with environmental regulations
with
increasing
concern
over
environmental
damage,
Although transaction cost theory (TCT) (Ghoshal & Moran, 1996)
(Huang & Wu, 2010). Thirdly, Taiwanese high-tech firms tend to form
requires a variety of contractual mechanisms to guard against partner
more social network partnership relationships. Numerous prior studies
opportunism, the relational network perspective (McDowell et al., 2018)
show that greater technological intensity of industries correlates posi-
has suggested alternative means for minimizing this opportunism. RC
tively with the number of partners in those sectors (e.g., Wang &
emphasizes on the external collaboration of the firm. GRC constitutes to
Chen, 2018). To enhance generalizability, this study focuses on
green innovation by reducing transaction, search, information, and
Taiwanese high-tech firms operating in different four-digit Standard
bargaining costs. When firms adopt GRC strategy in their environmental
Industrial Classification (SIC) code industries to provide a reasonably
business operations, they can better develop green innovation to
similar context for respondents but also enough for the results to be
minimize environmental impacts and attractive customers who are inter-
generalizable. These industries classified as the high-tech industries
ested in improved green performance. Firms must work to integrate the
have been widely employed in previous research (e.g., Hsu &
environmental knowledge generated and communicated by GRC to add
Wang, 2012; Wang, 2020). Table 1 shows the distribution of the
value and leverage green innovation activities from such knowledge
industry sector.
(Roxas et al., 2014). Green performance can then be increasingly
generated by GRC through green innovation.
Data
collection
followed
the
guidelines
by
Huber
and
Power (1985) for obtaining high-quality data from key informants.
This argument suggests that GSC is associated with positive per-
Firms included in the 2019 Commonwealth magazine database that
formance (Meyer et al., 2014). Green innovation plays a critical role in
included businesses in major seven SIC code divisions reported rele-
creating firm's green performance under high environmental pressure
vant variables for the population of 1000 firms. Because the study
(Przychodzen & Przychodzen, 2015). A major purpose of this study is
focuses on environmental issue, intangible assets, and innovation
to examine whether green innovation fulfills such a mediating effect
strategy, we excluded highly diversified firms (e.g., service firms, trans-
between the relationship of GSC and green performance. GSC
portation, and traditional manufacturing firms) from the sample in
comprises the unique environmental knowledge codified within a firm.
order to reduce noise in the proxies. Thus, 597 were surveyed for this
This stock of knowledge can increase green innovation because the
study, but only 138 firms responded, for a response rate of 22%, rais-
production of new products usually involves applying this green
ing concern about whether the sample is representative for the popu-
knowledge (Fleming & Sorenson, 2004). Hence, we expect GSC, as
lation of interest. However, Calder et al. (1981) argued that
the codification environmental knowledge generated within the firm,
respondent quality is more important than response rate, and we
to positively influence firm's green performance by facilitating green
selected senior managers working in related areas. Respondents had
innovation.
H6a. Green innovation mediates the relationship between GHC and
green performance.
H6b. Green innovation mediates the relationship between GRC and
green performance.
H6c. Green innovation mediates the relationship between GSC and
green performance.
3
3.1
M E TH O DO LO GY
|
|
Sample and data
We chose the high-tech industry in Taiwan as our empirical context
for three reasons. Firstly, rapid technological obsolescence creates
TABLE 1
Distribution of the sample
SIC code—Industry sector:
number = 138 (%)
2836—Biotechnology: 26 (18.8%)
Firm's ages: years (%)
<10 years: 22 (16.3%)
3572—Computer storage devices: 17
(12.3%)
11–20 years: 44 (31.8%)
3641—Electronic equipment: 15 (10.8%)
21–30 years: 37 (27.4%)
3663—Radio and TV communication
equipment: 16 (11.6%)
31–40 years: 21 (15.6%)
3674—Semiconductors and related
devices: 39 (28.2%)
>41 years: 14 (9.6%)
3825—Instruments for measuring and
testing of electricity: 13 (9.4%)
5045—Computers, peripherals, and
software: 12 (8.7%)
Abbreviation: SIC, Standard Industrial Classification.
6
WANG AND JUO
an average of 3-year experience in their business unit and 10 years in
Gerbing (1988). The test of a measurement model assesses whether
the industry. Almost all respondents described themselves as at least
observed variables are actually measuring the underlying theoretical
knowledgeable about environmental and innovative issues in their
constructs and whether the model provides evidence of an acceptable
business unit, whereas 80% characterized themselves as very or
fit to the sample data. Other useful measures include chi-square
extremely knowledgeable. Sample and respondent characteristics are
(χ 2/df = 1.74), the goodness-of-fit index (GFI = 0.978), the normed-
presented in Table 2.
fit index (NFI = 0.96), the comparative fit index (CFI = 0.94), and the
root-mean-square error of approximation (RMSEA = 0.034). These
index values are all within the range of values considered to provide
3.2
Measurement
|
evidence of good model fit. Furthermore, the composite construct
reliabilities all exceed .70. All individual items within each dimension
Valid measures were determined by reviewing the current literature
average item-to-total correlations of .69, and all exceed .52, indicating
and adopting multi-item scales to measure GIC, green innovation, eco-
satisfactory levels of internal consistency. Convergent validity was
nomic performance, and green performance. The measurement scale
investigated by a series of confirmatory factor analyses at first-order
was scored on a 7-point Likert-type scale ranging from 1 (strongly dis-
and second-order levels. All indicators loaded significantly on their
agree) to 7 (strongly agree). GIC was measured by the 11-item scale
hypothesized latent consistency, and average inter-item correlations
proposed in Chen (2008a, 2008b) and Huang and Kung (2011). This
of each dimension exceed .50 (being significant at the .05 level), dem-
measurement was also used by previous studies (Yong et al., 2019;
onstrating convergent validity. With regard to discriminant validity, as
Yusoff et al., 2019).
shown in Table 3, none of the correlations among the constructs is
The green innovation in this study was considered from two
sufficiently high to jeopardize discriminant validity. Each construct
dimensions: green product innovation and green process innovation.
average variance extracted (AVE) exceeded the .5 level (Hair
The measures relating to green innovation consisted of five items
et al., 1998). In addition, the square root of the AVE for each con-
from previous studies (Chen, 2008a, 2008b; Chiou et al., 2011;
struct was higher than the correlation between construct and any
Roper & Tapinos, 2016). Green performance was adapted from
other construct, indicating discriminant validity based on Fornell and
Melnyk et al. (2003), W. Yu et al. (2017), and Daily et al. (2007).
Larker (1981).
Respondents were asked about the importance of measuring green
Evidence of nomological validity is provided by having distinct
performance using six items connected with issues related to encour-
antecedents and consequences, investigating theoretical relationships
aging firms to achieve important environmental certifications
between different constructs derived from the literature (Iacobucci
(e.g., ISO 14031).
et al., 1995). To assess nomological validity, the correlation matrix
Economic performance was measured as overall business and
provides a useful start because the constructs should relate to each
market growth. We measured economic performance by subjective
another. Correlations between the factor scores for each construct
performance measure, as applied by previous studies. The measure-
are shown in Table 3. Results support the prediction that these con-
ment scale for economic performance was taken from Xie
structs are positively related to one another.
et al. (2019), Lai et al. (2015), and W. Li et al. (2007), which measures
We also checked the possibility of common method bias, using
the degree of financial performance. All items are presented in
Harmon's one-factor test to assess whether it was a potential threat.
Appendix.
Because the first factor accounted for 18% of the variance and that
there was no general factor in the unrotated factor structure
that accounted for the majority of variance, we conclude that com-
4
RESULTS
|
mon method bias did not pose a serious threat. Nonresponse bias was
also tested by a t-test comparison of early and late respondents
4.1
|
Measurement validation
(Armstrong & Overton, 1977), showing that these groups did not differ in any of the key variables studied. This suggests that nonresponse
Measurement model testing applied confirmatory factor analysis
bias is not a problem. Thus, representativeness of the sample was
(CFA) to develop an acceptable model, following Anderson and
satisfactory.
TABLE 2
4.2
Distribution of respondents
Title: number (%) N = 138
CEO (owner): 3 (2.17%)
General manager: 65 (47.1%)
R&D manager: 41 (29.7%)
Marketing manager: 18 (13.0%)
Others: 11 (7.97%)
|
Mediation test
Tenure in industry: years (%)
<3 years: 23 (2.17%)
3–5 years: 16 (11%)
6–10 years: 30 (21.7%)
11–20 years: 46 (33.3%)
>21 years: 23 (16.6%)
The most commonly used method, proposed by Baron and
Kenny (1986), was used to test the mediation effect of our hypotheses. There are four steps in this method to verify whether green innovation mediates the relation between GIC and performance. A
structural equation model was used to test the hypothesized links
between the constructs. First, the result of Model 1 indicates that
7
WANG AND JUO
T A B L E 3 Descriptive statistics and
correlation matrix
Constructs
Mean
SD
CR
AVE
1
2
3
4
5
1. GHC
5.97
1.59
.89
.76
.87
2. GRC
6.36
2.25
.91
.68
.64**
.77
3. GSC
6.70
1.16
.85
.81
.55**
.53**
.90
4. GI
6.62
1.98
.92
.88
.49**
.61**
.48*
.93
5. EP
6.58
1.32
.88
.83
.46**
.52*
.49*
.56**
.91
6. GP
5.98
1.78
.90
.87
.58*
.53*
.62**
.66**
.61**
6
.93
Note: Square root of the AVE is on diagonal (bold italic).
Abbreviations: AVE, average variance extracted; CR, composite reliability; EP, economic performance;
GHC, green human capital; GI, green innovation; GP, green performance; GRC, green relational capital;
GSC, green structural capital.
*p < .05. **p < .01.
T A B L E 4 Testing mediator effects
using structural equation model
Model 1
Model 2
Model 3
Testing Step 1
Predictors:
GHC (H1a)
0.478 (6.07)***
GRC (H1b)
0.882 (6.15)***
GSC (H1c)
0.498 (5.32)***
Outcome:
EP
Predictors:
GHC (H2a)
0.508 (7.21)***
GRC (H2b)
0.869 (5.81)***
GSC (H2c)
0.686 (4.89)***
Outcome:
GP
Testing Step 2
Predictors:
Outcome:
GHC (H3a)
0.792 (6.61)***
GRC (H3b)
0.931 (5.56)***
GSC (H3c)
0.814 (6.36)***
GI
Testing Step 3
Predictor:
GI
Outcomes:
EP (H4a)
0.521 (4.61)***
GP (H4b)
0.491 (7.22)***
Overall fit
χ2
249.45
df
175
137.27
94
136.94
86
RMSEA
0.056
0.048
0.039
GFI
0.95
0.90
0.93
NFI
0.94
0.91
0.94
IFI
0.935
0.92
0.92
Note: Numbers in parentheses show t values.
Abbreviations: EP, economic performance; GFI, goodness-of-fit index; GHC, green human capital; GI,
green innovation; GP, green performance; GRC, green relational capital; GSC, green structural capital; IFI,
incremental fit indices; NFI, normed-fit index; RMSEA, root-mean-square error of approximation.
***p < .001.
respective GHC (H1a; β = .478), GRC (H1b; β = .882), and GSC (H1c;
on green performance was also verified. Second, with regard to the
β = .498) have significant positive effects on economic performance.
drivers, Model 2 shows that respective connect of GHC (H3a;
H1a, H1b, and H1c were confirmed. The positive impact of respective
β = .792), GRC (H3b; β = .931), and GSC (H3c; β = .814) with green
GHC (H2a; β = .508), GRC (H2b; β = .869), and GSC (H2c; β = .686)
innovation was confirmed. Third, Model 3 shows that the mediating
8
WANG AND JUO
TABLE 5
Mediating effect of green innovation
Outcomes
Model 4
Predictors
Mediator
GHC
GP
EP β (t value)
.414 (0.128) (H5a)
GP β (t value)
.802 (6.46)*** (H6a)
GRC
.603 (7.87)*** (H5b)
.662 (8.87)*** (H6b)
GSC
.738 (5.98)*** (H5c)
.209 (0.23) (H6c)
χ
2
423.74
df
RMSEA
NFI
IFI
GFI
280
0.039
0.934
0.926
0.891
Abbreviations: EP, economic performance; GFI, goodness-of-fit index; GHC, green human capital; GP, green performance; GRC, green relational capital;
GSC, green structural capital; IFI, incremental fit index; NFI, normed-fit index; RMSEA, root-mean-square error of approximation.
***p < .001.
role of green innovation related to performance was estimated, con-
Yong et al. (2019) and Yusoff et al. (2019), this paper explicitly
trolling for the effect of green innovation on economic performance
discusses how the composition of GIC can improve business perfor-
(H4a; β = .521) and green performance (H4b; β = .491). Thus, H4a
mance. Our study also adds to the knowledge on the impact of
and H4b are also supported. The results of analyses are reported in
various elements of GIC on performance, thereby strengthening the
Table 4.
GIC–economic performance and GIC–green performance linkages.
Fourth, Model 4 includes the green innovation to test whether or
Second, these findings show that a firm's green performance
not the indirect effect of three constructs of GIC through the media-
requires GIC so it can respond to internal and external opportunities
tor on performance is significant. However, from these results, the
and threats can be deterred. Managers who wish to deploy an envi-
linkage of GHC–economic performance (H5a; β = .414; p > .1) and
ronmental strategy should consider GIC as an integrating mechanism.
GSC–green performance (H6c; β = .209; p > .1) becomes insignificant
The natural resource-based theory considerations (Hart, 1995) sup-
when green innovation is added. These results support the full media-
port the rationale of this finding. Hart (1995) argues that “one of the
tion of green innovation on the GHC–economic performance and
most important drivers of new resources and capability development
GSC–green performance relationship. Hence, we accept H5a and
for firms will be constraints and challenges posed by the natural envi-
H6c. Furthermore, the impacts of GRC on economic performance
ronment” (p. 989). Hence, a firm's green intangible resources are more
(H5b; β = .603) and green performance (H6b; β = .662), smaller than
likely to contribute to the attainment and sustainment of a firm's
those of Model 1, are significant. We can conclude that GRC is a
superior green performance.
partially mediating variable because when including green innovation
The results indicate the significance of GHC for green innovation.
as a mediator, the effect of GRC on performance is not totally ruled
Because environmental knowledge and skills embedded in employees
out. These results confirm that a firm's green innovation partially
are important for firms to develop green innovation, managers should
mediates its GRC and performance. Hence, H5b and H6b are also
recruit the employees with superior environmental knowledge so they
supported. Whereas the results show the effect of GSC on economic
can contribute to green innovation. In contrast to GHC, GSC is inde-
performance (H5c; β = .738) and the effect of GHC on green perfor-
pendent of employees. Managers must try to invest and establish
mance (H6a; β = .802), a larger powerful predictor than those of
strong GSC to help a firm organize its processes and systems. This can
Model 1 is significant. This means that green innovation does not
further enable the required environmental knowledge to become
have a mediating effect of the linkage of GSC–economic performance
organizational capabilities and, in turn, sustain green innovation. This
and GHC–green performance. Hence, H5c and H6a are not
study supports the significance of GRC towards green innovation, in
supported. The results of mediation analyses are reported in Table 5.
line with the recommendations of Martinez et al. (2017) for improving
innovation. Managers can build interaction with external green relationships with their strategic partners, facilitating external information
5
|
DISCUSSION
sharing of environmental knowledge, and leverage the development
of green innovation.
The theoretical framework for this study extends our understanding
A significant positive effect is also found on the green
of environmental management with a unique theoretical argument
innovation–economic performance and green innovation–green
describing the relationship by considering the mediating effect of
performance
green innovation. Our results confirm that GIC is a critical factor in
(e.g., Pipatprapa et al., 2017; Tang et al., 2018). This suggests that
firm economic performance and green performance. More specifically,
green innovation is likely to be a valuable strategic choice for business
this paper makes several contributions to existing literature. First, it
activities of high-tech firms, so managers should be aware of the
contributes to the literature on IC and innovation by extending envi-
importance of green innovation and willing to engage in green innova-
ronmental management practice. Building on previous research by
tion practices. Managers may incorporate environmental issues into
relationship,
consistent
with
previous
studies
9
WANG AND JUO
their innovation activities to generate more business and green per-
The empirical findings also point to the possible mediating effect
formance outcomes. Our finding also suggests that the ecological
of green innovation on the relationship between GSC and economic
issue is important for innovation strategies, and it is necessary to
performance. Innovation management theories suggest that green
orientate environmental concerns in relation to their innovation. Thus,
innovation can help enhance the effect of GSC on economic perfor-
by making the environment a salient concern, firms can promote
mance, but our empirical findings fail to confirm this expectation. A
green innovation as a means of achieving improved economic
plausible explanation is that most green innovation focuses on envi-
performance and green performance.
ronmental improvements in product and energy efficiency as well as
Our finding of the mediating effect of green innovation is
accumulated cost savings. Some firms with GSC may charge a pre-
important because this mediation has largely been overlooked in
mium for environmental friendly products, thereby facing the risk
previous research (Omar et al., 2017), which has primarily examined
excluding their products from mainstream markets. This could under-
the direct effect of GIC on firm sustainability. Our study reveals that
mine the firm's profitability goals, worry stakeholders, and lead to
green innovation fully mediates the GHC–economic performance
unwelcome price rises that might jeopardize the firm's economic per-
and GSC–green performance relationships. We highlight green
formance. This is a significant finding because it points to strategy
innovation as GHC being the foundation of economic performance
implications, because it implies that economic performance rooted in
and GSC being the foundation of green performance. This makes
green innovation may be largely ineffective. In this study, GSC was
several contributions. First, our findings expand current empirical
still a significant and substantial drive of economic performance (H1c
research arguing that there is direct relationship of the linkage of
is supported). The challenge facing researchers is to determine
GHC–economic performance and GSC–green performance (Chen &
whether green innovation is a mediator influencing the strength of
Chang, 2013; Yusliza et al., 2020). We shed further light on this
the GHC–economic performance relationship.
relationship by investigating the mediating role of green innovation.
Finally, contrary to expectations, the result shows an insignificant
This result indicates that it is crucial for managers to develop GHC
indirect effect of GHC on green performance through green innova-
and GSC, such as supporting employee's green beliefs and values to
tion. That GHC directly influences green performance is supported by
tackle environmental issues, establishing green interfunctional
H2a, and that green innovation directly impacts green performance is
departments with clear long-term environmental missions, and
also supported by H4b. This result is in agreement with Cai and
allocating resources to implement the firm's environmental strategy.
Li (2018) and Wang (2020). However, in the presence of green inno-
Therefore, new green processes, techniques, and productions to
vation as a mediator variable (H6a), the green innovation effect is
avoid environmental harm should be widely promoted, and
questionable. This contradictory empirical result may be because firms
managers should actively pursue that green innovation is likely to
consider green performance as a threat and do only the bare minimum
lead to superior economic performance and green performance
to comply with environmental regulations. Therefore, firms consider
rather than take up a follower role with a sole objective of environ-
the outcomes of green innovation in terms of short-term financial
mental compliance.
measures, overlooking long-term environmental concerns. This incon-
Our findings contradict extant research that suggests a direct and
sistency can lead to a misleading picture of green innovation with seri-
positive impact of GRC on economic performance and green perfor-
ous empirical implications for the green innovation strategy that firms
mance, but there is a partially mediator of green innovation between
must know: Would the firms care if green innovation is necessary or
the relationships. This result suggests that GRC might directly or indi-
not? To answer this question, managers need to investigate whether
rectly affect economic performance and green performance through
the firm's green innovation makes an outstanding difference. They
green innovation. This direct effect is also found in related literature
also need to articulate what the firms aspire to be and how they are
(e.g., Matinaro et al., 2019; Yusoff et al., 2019), but our results provide
going to get there by integrating green innovation into GHC for
evidences on the partially mediating role of green innovation in high-
sustainable green performance.
tech settings. Reexamining the indirect effect of GRC on performance
shows that GRC driver through green innovation strongly contributes
to performance, which has important managerial implications. Man-
6
|
LIM I TAT I ON S A N D FUTU RE R E SE ARC H
agers should motivate partners to come together to grasp opportunities that they would not have been able to pursue alone. Partner
Notwithstanding this study's contributions, it has a number of limita-
collaboration and organizational environmental knowledge sharing is
tion that warrant consideration in future research. A main limitation of
likely to enhance green innovation success as a result of multiple com-
this analysis is that our sample was restricted to high-tech industry.
plementarities and synergies (Belderbos et al., 2012). Furthermore,
This sampling provides an opportunity context for investigating the
partners can cultivate better understanding and knowledge of envi-
effects of environmental issues but limits the generalizability of
ronmental protection culture that facilitates adapting existing prod-
the finding to other settings. In fact, nonhigh-tech firms may or may
ucts to innovative environment-friendly requirements. Thus, that rich
not benefit from GIC or green innovation. Compared with high-tech
network connection among partners is the prerequisite of green
firms, nonhigh-tech firms may prioritize these green strategic objec-
innovation and is required to pursue economic performance and green
tives and strength their core competencies in the environmental prac-
performance.
tices. Further, empirical validation is required to understand whether,
10
WANG AND JUO
how, and the extent to which GIC is important for nonhigh-tech
industrial settings.
This field research was developed in a single country, Taiwan, and
in a relatively homogeneous set of technology-based high-tech firms,
so our sample size and response rate are similar to previous surveybased studies on environmental management. This limitation may lead
to some difficulties in extrapolating these findings to other geographical areas. Nevertheless, this limitation may be overcome in future
research collecting data from other countries with larger sample sizes
to confirm the results in other countries. That could provide useful
comparisons for better comprehension of this topic.
Tangibility is an issue with the adoption of GIC. These widely
accepted constricts used in GIC are flawed in that they are generally
self-reported by managers within the firm. Thus, these limitations of
reflective measures and subjective primary data do provide an excellent platform for future research on this topic. It could also be useful
to consider formative measure as well as objective data to confirm or
reject evidence presented in this paper. This would remove much of
the self-report bias from research on IC and could enrich the literature
and perhaps alter the results. Linking GIC to performance would also
provide interesting worthwhile research directions for this topic.
An important limitation is that we did not consider the R&D
investment when exploring the role of green innovation. Because
R&D investment has been considered central to green innovation
(Duque et al., 2020), we cannot verify actual and unique effects of
green innovation on performance. Hence, future research could
control for R&D investment in order to better understand the extent
to which innovation contributes similarly or differently to a firm's
performance.
Because the effects of a firm's performance may be different
according to its size (Martínez & Kunapatarawong, 2019), future
research may investigate whether performance is better when small
firms have limited resources. In addition, other factors may influence
the effect of innovation on economic performance, such as market
intensity (Chaudhuri et al., 2019), environmental uncertainty (Zhao
et al., 2018), and innovation-oriented learning (Stock et al., 2013).
Future research may develop an even more comprehensive theory of
improving economic performance by integrating these factors into the
proposal model, for example, through moderating testing.
ACKNOWLEDGMENTS
The author would like to acknowledge the Ministry of Science and
Technology of the Republic of China, Taiwan, for financially
supporting this research under contract MOST 109-2410-H-275-003.
ORCID
Chao Hung Wang
https://orcid.org/0000-0002-4564-4091
RE FE R ENC E S
Agostini, L., Nosella, A., & Filippini, R. (2017). Does intellectual capital
allow improving innovation performance? A quantitative analysis in
the SME context. Journal of Intellectual Capital, 18(2), 400–418.
https://doi.org/10.1108/JIC-05-2016-0056
Aguilera-Caracuel, J., & Ortiz-de-Mandojana, N. (2013). Green innovation
and financial performance: An institutional approach. Organization
&
Environment,
26(4),
365–385.
https://doi.org/10.1177/
1086026613507931
Ahmad, M., & Ahmed, N. (2016). Testing the relationship between intellectual capital and a firm's performance: An empirical investigation
regarding financial industries of Pakistan. International Journal of Learning and Intellectual Capital, 13(2–3), 250–272. https://doi.org/10.
1504/IJLIC.2016.075691
Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in
practice: A review and recommended two-step approach. Psychological
Bulletin, 103(3), 411–423. https://doi.org/10.1037/0033-2909.103.
3.411
Arfi, W. B., Hikkerova, L., & Sahut, J. M. (2018). External knowledge
sources, green innovation and performance. Technological Forecasting
and Social Change, 129, 210–220. https://doi.org/10.1016/j.techfore.
2017.09.017
Armstrong, J. S., & Overton, T. S. (1977). Estimating nonresponse bias in
mail surveys. Journal of Marketing Research, 14(3), 396–402. https://
doi.org/10.1177/002224377701400320
Baker, W. E., & Sinkula, J. M. (2005). Environmental marketing strategy
and firm performance: Effects on new product performance and market share. Journal of the Academy of Marketing Science, 33(4), 461–475.
https://doi.org/10.1177/0092070305276119
Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable
distinction in social psychological research: Conceptual, strategic, and
statistical considerations. Journal of Personality and Social Psychology,
51(6), 1173–1182. https://doi.org/10.1037/0022-3514.51.6.1173
Bassetti, T., Blasi, S., & Sedita, S. R. (2021). The management of sustainable
development: A longitudinal analysis of the effects of environmental
performance on economic performance. Business Strategy & the Environment, 30(1), 21–37. https://doi.org/10.1002/bse.2607
Belderbos, R., Gilsing, V., & Lokshin, B. (2012). Persistence of, and interrelation between, horizontal and vertical technology alliances. Journal of
Management, 38(6), 1812–1834. https://doi.org/10.1177/01492063
10386962
Bontis, N. (1998). Intellectual capital: An exploratory study that develops
measures and models. Management Decision, 36(2), 63–76. https://doi.
org/10.1108/00251749810204142
Cai, W., & Li, G. (2018). The drivers of eco-innovation and its impact on
performance: Evidence from China. Journal of Cleaner Production,
176(1), 110–118. https://doi.org/10.1016/j.jclepro.2017.12.109
Calder, B. J., Phillips, L. W., & Tybout, A. M. (1981). Designing research for
application. Journal of Consumer Research, 8(2), 197–207. https://doi.
org/10.1086/208856
Calza, F., Parmentola, A., & Tutore, I. (2021). For green or not for green?
The effect of cooperation goals and type on environmental performance. Business Strategy & the Environment, 30(1), 267–281. https://
doi.org/10.1002/bse.2620
Chang, C. H. (2011). The influence of corporate environmental ethics on
competitive advantage: The mediation role of green innovation. Journal of Business Ethics, 104(3), 361–370. https://doi.org/10.1007/
s10551-011-0914-x
Chang, C. H., & Chen, Y. S. (2012). The determinants of green intellectual
capital. Management Decision, 50(1), 74–94. https://doi.org/10.1108/
00251741211194886
Chaudhry, N., & Bilal, A. (2016). The role of environmental consciousness,
green intellectual capital management and competitive advantage on
financial performance of the firms: An evidence from manufacturing
sector of Pakistan. Journal of Quality and Technology Management,
13(II), 51–70. https://www.researchgate.net/publication/313887870
Chaudhuri, M., Janney, J., & Calantone, R. J. (2019). The moderating
effects of leverage and marketing intensity on alliance formation
announcements. Management Decision, 58(4), 773–785. https://doi.
org/10.1108/MD-04-2018-0375
WANG AND JUO
Chen, Y. S. (2008a). The driver of green innovation and green image–green
core competence. Journal of Business Ethics, 81(3), 531–543. https://
doi.org/10.1007/s10551-007-9522-1
Chen, Y. S. (2008b). The positive effect of green intellectual capital on
competitive advantages of firms. Journal of Business Ethics, 77(3),
271–286. https://doi.org/10.1007/s10551-006-9349-1
Chen, Y. S., & Chang, C. H. (2013). Utilize structural equation modeling
(SEM) to explore the influence of corporate environmental ethics: The
mediation effect of green human capital. Quality & Quantity, 47(1),
79–95. https://doi.org/10.1007/s11135-011-9504-3
Chiou, T. Y., Chan, H. K., Lettice, F., & Chung, S. H. (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, 47(6), 822–836.
https://doi.org/10.1016/j.tre.2011.05.016
Cronin, J. J., Smith, J. S., Gleim, M. R., Ramirez, E., & Martinez, J. D.
(2011). Green marketing strategies: An examination of stakeholders
and the opportunities they present. Journal of the Academy of Marketing Science, 39(1), 158–174. https://doi.org/10.1007/s11747010-0227-0
& Co
rcoles, D. (2014). Drivers of green
Cuerva, M. C., Triguero-Cano, A.,
and non-green innovation: Empirical evidence in Low-Tech SMEs.
Journal of Cleaner Production, 68, 104–113. https://doi.org/10.1016/j.
jclepro.2013.10.049
Daily, B. F., Bishop, J. W., & Steiner, R. (2007). The mediating role of EMS
teamwork as it pertains to HR factors and perceived environmental
performance. Journal of Applied Business Research, 23(1), 95–110.
https://doi.org/10.19030/jabr.v23i1.1411
Dangelico, R. M. (2016). Green product innovation: Where we are and
where we are going. Business Strategy and the Environment, 25(8),
560–576. https://doi.org/10.1002/bse.1886
, J., Martín-de Castro, G., & NavasDelgado-Verde, M., Amores-Salvado
pez, J. E. (2014). Green intellectual capital and environmental prodLo
uct innovation: The mediating role of green social capital. Knowledge
Management Research & Practice, 12(3), 261–275. https://doi.org/10.
1057/kmrp.2014.1
Dickel, P., Hörisch, J., & Ritter, T. (2018). Networking for the environment:
The impact of environmental orientation on start-ups' networking frequency and network size. Journal of Cleaner Production, 179, 308–316.
https://doi.org/10.1016/j.jclepro.2018.01.058
Doran, J., & Ryan, G. (2016). The importance of the diverse drivers and
types of environmental innovation for firm performance. Business
Strategy and the Environment, 25(2), 102–119. https://doi.org/10.
1002/bse.1860
Dore, R. (1983). Goodwill and the spirit of market capitalism. The British
Journal of Sociology, 34(4), 459–482. https://doi.org/10.2307/590932
Duque, G. E., Aguilera, C. J., Guerrero, V. J., & García, S. E. (2020). Does
green innovation affect the financial performance of Multilatinas? The
moderating role of ISO 14001 and R&D investment. Business Strategy & the Environment, 29(8), 3286–3302. https://doi.org/10.1002/
bse.2572
Edvinsson, L., & Malone, M. S. (1997). Intellectual capital: The proven way
to establish your company's real value by finding its hidden brainpower.
London: Judy Piatkus.
Fleming, L., & Sorenson, O. (2004). Science as a map in technological search. Strategic Management Journal, 25(8–9), 909–928. https://doi.org/
10.1002/smj.384
Fornell, C., & Larker, D. (1981). Structural equation modeling and regression: Guidelines for research practice. Journal of Marketing Research,
18(1), 39–50. https://doi.org/10.1177/002224378101800104
García-Machado, J. J., & Martínez-Avila,
M. (2019). Environmental performance and green culture: The mediating effect of green innovation.
An application to the automotive industry. Sustainability, 11(18), 4874.
https://doi.org/10.3390/su11184874
11
Ghoshal, S., & Moran, P. (1996). Bad for practice: A critique of the transaction cost theory. Academy of Management Review, 21(1), 13–47.
https://doi.org/10.5465/amr.1996.9602161563
Grant, R. M. (1996). Toward a knowledge-based theory of the firm. Strategic Management Journal, 17(S2), 109–122. https://doi.org/10.1002/
smj.4250171110
Gürlek, M., & Tuna, M. (2018). Reinforcing competitive advantage through
green organizational culture and green innovation. Service Industries
Journal, 38(7–8), 467–491. https://doi.org/10.1080/02642069.2017.
1402889
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (1998). Multivariate
data analysis. Upper Saddle River, NJ: Prentice Hall.
Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of
Management Review, 20(4), 986–1014. https://doi.org/10.5465/amr.
1995.9512280033
Hsu, L. C., & Wang, C. H. (2012). Clarifying the effect of intellectual capital
on performance: The mediating role of dynamic capability. British Journal of Management, 23(2), 179–205. https://doi.org/10.1111/j.14678551.2010.00718
Hsu, M., Selvaraj, K., & Agoramoorthy, G. (2006). Taiwan's industrial heavy
metal pollution threatens terrestrial biota. Environmental Pollution,
143(2), 327–334. https://doi.org/10.1016/j.envpol.2005.11.023
Hsueh, L. (2019). Opening up the firm: What explains participation and
effort in voluntary carbon disclosure by global businesses? An analysis
of internal firm factors and dynamics. Business Strategy & the Environment, 28(7), 1302–1322. https://doi.org/10.1002/bse.2317
Huang, C. L., & Kung, F. H. (2011). Environmental consciousness and intellectual capital management. Management Decision, 49(9), 1405–1425.
https://doi.org/10.1108/00251741111173916
Huang, Y. C., & Wu, Y. C. J. (2010). The effects of organizational factors
on green new product success: Evidence from high-tech industries in
Taiwan. Management Decision, 48(10), 1539–1567. https://doi.org/10.
1108/00251741011090324
Huber, G. P., & Power, D. J. (1985). Retrospective reports of strategic-level
managers: Guidelines for increasing their accuracy. Strategic Management
Journal,
6(2),
171–180.
https://doi.org/10.1002/smj.
4250060206
Iacobucci, D., Ostrom, A., & Grayson, K. (1995). Distinguishing service
quality and customer satisfaction: The voice of the consumer. Journal
of Consumer Psychology, 4(3), 277–303. https://doi.org/10.1207/
s15327663jcp0403_04
Jin, Y., Cheng, C., & Zeng, H. (2020). Is evil rewarded with evil? The market
penalty effect of corporate environmentally irresponsible events. Business Strategy & the Environment, 29(3), 846–871. https://doi.org/10.
1002/bse.2403
Ketata, I., Sofka, W., & Grimpe, C. (2015). The role of internal capabilities
and firms' environment for sustainable innovation: Evidence for Germany. R&D Management, 45(1), 60–75. https://doi.org/10.1111/radm.
12052
Khurshid, F., Park, W. Y., & Chan, F. T. S. (2019). Innovation shock, outsourcing strategy, and environmental performance: The roles of prior
green innovation experience and knowledge inheritance. Business
Strategy and the Environment, 28(8), 1572–1582. https://doi.org/10.
1002/bse.2333
Kohtamäki, M., Vesalainen, J., Henneberg, S., Naudé, P., & Ventresca, M. J.
(2012). Enabling relationship structures and relationship performance
improvement: The moderating role of relational capital. Industrial Marketing Management, 41(8), 1298–1309. https://doi.org/10.1016/j.
indmarman.2012.08.001
Lai, K. H., Wong, C. W. Y., & Lam, J. S. L. (2015). Sharing environmental
management information with supply chain partners and the performance contingencies on environmental munificence. International Journal of Production Economics, 164, 445–453. https://doi.org/10.1016/j.
ijpe.2014.12.009
12
Lee, K. H., & Kim, J. W. (2011). Integrating suppliers into green product
innovation development: An empirical case study in the semiconductor industry. Business Strategy and the Environment, 20(8), 527–538.
https://doi.org/10.1002/bse.714
Lee, K. H., & Min, B. (2015). Green R&D for eco-innovation and its impact
on carbon emissions and firm performance. Journal of Cleaner Production, 108, 534–542. https://doi.org/10.1016/j.jclepro.2015.05.114
Li, W., Humphreys, P. K., Yeung, A. C. L., & Cheng, T. C. E. (2007). The
impact of specific supplier development efforts on buyer competitive
advantage: An empirical model. International Journal of Production Economics, 106(1), 230–247. https://doi.org/10.1016/j.ijpe.2006.06.005
Li, Y. (2014). Environmental innovation practices and performance: Moderating effect of resource commitment. Journal of Cleaner Production, 66,
450–458. https://doi.org/10.1016/j.jclepro.2013.11.044
Lin, R. J., Chen, R. H., & Huang, F. H. (2014). Green innovation in the
automobile industry. Industrial Management & Data Systems, 114(6),
886–903. https://doi.org/10.1108/IMDS-11-2013-0482
Lioukas, C. S., & Reuer, J. J. (2015). Isolating trust outcomes from exchange
relationships: Social exchange and learning benefits of prior ties in alliances. Academy of Management Journal, 58(6), 1826–1847. https://
doi.org/10.5465/amj.2011.0934
Marin, G., & Lotti, F. (2017). Productivity effects of eco-innovations using
data on eco-patents. Industrial and Corporate Change, 26(1), 125–148.
https://doi.org/10.1093/icc/dtw014
Marra, A., Carlei, V., & Baldassari, C. (2020). Exploring networks of proximity for partner selection, firms' collaboration and knowledge exchange.
The case of clean-tech industry. Business Strategy & the Environment,
29(3), 1034–1044. https://doi.org/10.1002/bse.2415
Martinez, M. G., Zouaghi, F., & Garcia, M. S. (2017). Capturing value from
alliance portfolio diversity: The mediating role of R&D human capital
in high and low tech industries. Technovation, 59, 55–67. https://doi.
org/10.1016/j.technovation.2016.06.003
Martínez, R. E., & Kunapatarawong, R. (2019). Green innovation and
knowledge: The role of size. Business Strategy & the Environment, 28(6),
1045–1059. https://doi.org/10.1002/bse.2300
Matinaro, V., Liu, Y., Lee, T. R., & Poesche, J. (2019). Extracting key factors
for sustainable development of enterprises: Case study of SMEs in Taiwan. Journal of Cleaner Production, 209, 1152–1169. https://doi.org/
10.1016/j.jclepro.2018.10.280
Maurer, I., Bartsch, V., & Ebers, M. (2011). The value of intraorganizational social capital: How it fosters knowledge transfer, innovation performance, and growth. Organization Studies, 32(2), 157–185.
https://doi.org/10.1177/0170840610394301
McDowell, W. C., Peake, W. O., Coder, L. A., & Harris, M. L. (2018). Building small firm performance through intellectual capital development:
Exploring innovation as the “black box”. Journal of Business Research,
88, 321–327. https://doi.org/10.1016/j.jbusres.2018.01.025
Melnyk, S. A., PSroufe, R., & Calantone, R. (2003). Assessing the impact of
environmental management systems on corporate and environmental
performance. Journal of Operations Management, 21(3), 329–351.
https://doi.org/10.1016/S0272-6963(02)00109-2
Meyer, C. R., Skaggs, B. C., & Youndt, M. (2014). Developing and deploying
organizational capital in services vs. manufacturing. Journal of Managerial Issues, 26(4), 326–344. https://www.jstor.org/stable/44113658
Omar, M. K., Yusoff, Y. M., & Zaman, M. D. K. (2017). The role of green
intellectual capital on business sustainability. World Applied Sciences
Journal, 35(12), 2558–2563. https://doi.org/10.5829/idosi.wasj.2017.
2558.2563
Papagiannakis, G., Voudouris, I., & Lioukas, S. (2014). The road to sustainability: Exploring the process of corporate environmental strategy over
time. Business Strategy and the Environment, 23(4), 254–271. https://
doi.org/10.1002/bse.1781
Pellegrini, C., Rizzi, F., & Frey, M. (2018). The role of sustainable human
resource practices in influencing employee behavior for corporate
WANG AND JUO
sustainability. Business Strategy & the Environment, 27(8), 1221–1232.
https://doi.org/10.1002/bse.2064
Peng, Y. S., & Lin, S. S. (2008). Local responsiveness pressure, subsidiary
resources, green management adoption and subsidiary's performance:
Evidence from Taiwanese manufactures. Journal of Business Ethics,
79(1–2), 199–212. https://doi.org/10.1007/s10551-007-9382-8
Pipatprapa, A., Huang, H. H., & Huang, C. H. (2017). The role of quality
management & innovativeness on green performance. Corporate Social
Responsibility and Environmental Management, 24(3), 249–260. https://
doi.org/10.1002/csr.1416
Przychodzen, J., & Przychodzen, W. (2015). Relationships between ecoinnovation and financial performance—Evidence from publicly traded
companies in Poland and Hungary. Journal of Cleaner Production, 90,
253–263. https://doi.org/10.1016/j.jclepro.2014.11.034
Roper, S., & Tapinos, E. (2016). Taking risks in the face of uncertainty: An
exploratory analysis of green innovation. Technological Forecasting and
Social Change, 112, 357–363. https://doi.org/10.1016/j.techfore.
2016.07.037
Roxas, B., Battisti, M., & Deakins, D. (2014). Learning, innovation and firm
performance: Knowledge management in small firms. Knowledge Management Research & Practice, 12(4), 443–453. https://doi.org/10.
1057/kmrp.2012.66
Salman, N., & Saives, A. L. (2005). Indirect networks: An intangible
resource for biotechnology innovation. R&D Management, 35(2),
203–215. https://doi.org/10.1111/j.1467-9310.2005.00383.x
Sharabati, A. A. A., Jawad, S. N., & Bontis, N. (2010). Intellectual capital
and business performance in the pharmaceutical sector of Jordan.
Management Decision, 48(1), 105–131. https://doi.org/10.1108/
00251741011014481
Singh, S. K., Giudice, M. D., Chierici, R., & Graziano, D. (2020). Green innovation and environmental performance: The role of green transformational leadership and green human resource management.
Technological Forecasting and Social Change, 150, 119762. https://doi.
org/10.1016/j.techfore.2019.119762
Soewarno, N., & Tjahjadi, B. (2020). Measures that matter: An empirical
investigation of intellectual capital and financial performance of banking firms in Indonesia. Journal of Intellectual Capital, 21(6), 1085–1106.
https://doi.org/10.1108/JIC-09-2019-0225
Stock, R. M., Six, B., & Zacharias, N. A. (2013). Linking multiple layers of
innovation-oriented corporate culture, product program innovativeness, and business performance: A contingency approach. Journal of
the Academy of Marketing Science, 41(3), 283–299. https://doi.org/10.
1007/s11747-012-0306-5
Subramaniam, M., & Youndt, M. A. (2005). The influence of intellectual
capital on the types of innovative capabilities. Academy of Management
Journal, 48(3), 450–463. https://doi.org/10.5465/amj.2005.17407911
Tang, M., Walsh, G., Lerner, D., Fitza, M. A., & Li, Q. (2018). Green innovation, managerial concern and firm performance: An empirical study.
Business Strategy and the Environment, 27(1), 39–51. https://doi.org/
10.1002/bse.1981
Tang, Z., & Tang, J. (2012). Stakeholder–firm power difference, stakeholders' CSR orientation, and SMEs' environmental performance in
China. Journal of Business Venturing, 27(4), 436–455. https://doi.org/
10.1016/j.jbusvent.2011.11.007
Tsai, W., & Ghoshal, S. (1998). Social capital and value creation: The role
of intrafirm networks. Academy of Management Journal, 41(4),
464–476. https://doi.org/10.5465/257085
Tu, W., & Lee, Y. (2009). Ineffective environmental laws in regulating electronic manufacturing pollution: Examining water pollution disputes in
Taiwan. In 2009 IEEE International Symposium on Sustainable Systems
and Technology (pp. 1–6). Phoenix, AZ: IEEE. https://doi.org/10.1109/
ISSST.2009.5156734
Wang, C. H. (2019). How organizational green culture influences green
performance and competitive advantage. Journal of Manufacturing
13
WANG AND JUO
Technology Management, 30(4), 666–683. https://doi.org/10.1108/
JMTM-09-2018-0314
Wang, C. H. (2020). An environmental perspective extends market
orientation: Green innovation sustainability. Business Strategy and
the Environment, 29(8), 3123–3134. https://doi.org/10.1002/bse.
2561
Wang, C. H., & Chen, K. L. (2018). Guanxi: Competitive advantage or
necessary evil? Review of International Business and Strategy, 28(1),
111–128. https://doi.org/10.1108/RIBS-07-2017-0058
Wernerfelt, B. (1995). The resource-based view of the firm: Ten years
after. Strategic Management Journal, 16(3), 171–174. https://doi.org/
10.1002/smj.4250160303
Xie, X., Huo, J., & Zou, H. (2019). Green process innovation, green product
innovation, and corporate financial performance: A content analysis
method. Journal of Business Research, 101, 697–706. https://doi.org/
10.1016/j.jbusres.2019.01.010
Yawar, S. A., & Seuring, S. (2017). Management of social issues in supply
chains: A literature review exploring social issues, actions and performance outcomes. Journal of Business Ethics, 141(3), 621–643. https://
doi.org/10.1007/s10551-015-2719-9
Yong, J. Y., Yusliza, M. Y., Ramayah, T., & Fawehinmi, O. (2019). Nexus
between green intellectual capital and green human resource management. Journal of Cleaner Production, 215, 364–374. https://doi.org/10.
1016/j.jclepro.2018.12.306
Yu, W., Ramanathan, R., & Nath, P. (2017). Environmental pressures
and performance: An analysis of the roles of environmental
innovation strategy and marketing capability. Technological Forecasting
and Social Change, 117, 160–169. https://doi.org/10.1016/j.techfore.
2016.12.005
Yu, Y., & Huo, B. (2019). The impact of environmental orientation on supplier green management and financial performance: The moderating
role of relational capital. Journal of Cleaner Production, 211, 628–639.
https://doi.org/10.1016/j.jclepro.2018.11.198
Yusliza, M., Yong, J. Y., Tanveer, M. I., Ramayah, T., Faezah, J. N., &
Muhammad, Z. (2020). A structural model of the impact of green
intellectual capital on sustainable performance. Journal of Cleaner
Production, 249, 119334. https://doi.org/10.1016/j.jclepro.2019.
119334
Yusoff, Y. M., Nejati, M., Kee, D. M. H., & Amran, A. (2020). Linking green
human resource management practices to environmental performance
in hotel industry. Global Business Review, 21(3), 663–680. https://doi.
org/10.1177/0972150918779294
Yusoff, Y. M., Omar, M. K., Kamarul, M. D., & Samad, Z. S. (2019). Do all
elements of green intellectual capital contribute toward business
sustainability? Evidence from the Malaysian context using the Partial
Least Squares method. Journal of Cleaner Production, 234, 626–637.
https://doi.org/10.1016/j.jclepro.2019.06.153
Zhang, J., Liang, G., Feng, T., Yuan, H., & Jiang, W. (2020). Green
innovation to respond to environmental regulation: How external
knowledge adoption and green absorptive capacity matter? Business
Strategy & the Environment, 29(1), 39–53. https://doi.org/10.1002/
bse.2349
Zhao, Y., Feng, T., & Shi, H. (2018). External involvement and green product innovation: The moderating role of environmental uncertainty.
Business Strategy & the Environment, 27(8), 1167–1180. https://doi.
org/10.1002/bse.2060
APPENDIX A.
Green intellectual capital (Chen, 2008a, 2008b; Huang &
Kung, 2011)
Green human capital
GHC1. The contribution of environmental protection of employees
in our firm is better than our major competitors.
GHC2. Employee competence with respect to environmental
protection in our firm is better than that of our major competitors.
GHC3. Our managers fully support our employees in achieving their
goals with respect to environmental protection.
Green relational capital
GRC1. The cooperative relationships concerning environmental
protection of our firm with our upstream suppliers are stable.
GRC2. The cooperation relationships about environmental protection of our firm with our downstream clients or channels are stable.
GRC3. Our firm has well cooperative relationships concerning environmental protection with our strategic partners.
Green structural capital
GSC1. The management system for environmental protection in
our firm is superior to that of our major competitors.
GSC2. Investments in environmental protection facilities in our firm
are more than those of our major competitors.
GSC3. Competence in developing green products in our firm is
better than that of our major competitors.
GSC4. The overall operational processes for environmental
protection in our firm work smoothly.
GSC5. The knowledge management system for environmental
management in our firm is favorable for the accumulation of the
knowledge of environmental management.
Green innovation (Chen, 2008a, 2008b; Chiou et al., 2011; Roper &
Tapinos, 2016)
GI1. Our firm uses less or nonpolluting/toxic materials.
GI2. Our firm uses eco-labeling.
GI3. Our firm uses low energy consumption such as water, electricity, gas, and petrol during production/use/disposal.
GI4. Our firm uses recycle, reuse, and remanufacture material.
GI5. Our firm uses cleaner technology to make savings and prevent
pollution (such as energy, water, and waste).
How to cite this article: Wang CH, Juo W-J. An environmental
Green performance (Daily et al., 2007; Melnyk et al., 2003; W. Yu
policy of green intellectual capital: Green innovation strategy
et al., 2017)
for performance sustainability. Bus Strat Env. 2021;1–14.
GP1. Our firm conforms with requirements of inputs of energy.
https://doi.org/10.1002/bse.2800
GP2. Our firm conforms with requirements of outputs of air
emissions.
14
WANG AND JUO
GP3. Our firm conforms with requirements of indicators providing
Economic performance (Lai et al., 2015; W. Li et al., 2007; Xie
information on the local, regional, or national condition of the
et al., 2019)
environment.
EP1. Our firm increases in return on investments.
GP4. Our firm conforms with requirements of outputs of waste
EP2. Our firm increases in market share.
water.
EP3. Our firm improves in profit growth.
GP5. Our firm conforms with expectations of implementation of
EP4. Our firm increases in sale growth.
environmental policies and programs.
GP6. Our firm has achieved important environment-related
certifications (e.g., ISO 14031).