Enhancing firms’ green innovation and sustainable performance through the mediating role of green product innovation and moderating role of employees’ green behavior

Abstract

In today’s competitive world, the growing role of firms’ green innovation (GI) has caused organisations to respond to the demand for sustainable performance. Significantly, increasing environmental awareness has inevitably popularised GI approaches to maximise firms’ sustainable goals. GI receiving international significance has become the prime driver accelerating firms’ socio-ecological practices. Using the theoretical lens of resource-based theory, the study explores the impact of green process innovation, GI strategy and green action innovation on sustainable performance under the mediating role of green product innovation and moderating role of employee green behaviour. The data was collected from the 411 employees working in the Pakistani manufacturing sector. Structural equation modelling (SEM) and Partial Least Squares (PLS) regression were used for the proposed hypothesis testing. The employees’ green initiatives ensure the organisation’s sustainable performance through eco-friendly products. Employee green behaviour moderates between green product innovation and sustainable performance.