Exploring the Link between Sustainable Development Practices, Institutional Pressures, and Green Innovation

Abstract

Academics, business leaders, and policymakers are paying more and more attention to sustainable development. The influence of external forces on sustainable development practices, which could predict green innovation, is, however, still unexplored. This paper seeks to explore the role of external pressures on sustainable development practices in the driving of green innovation in Saudi Arabia. We took a quantitative approach through an online survey to collect the required data from manufacturing companies in Saudi Arabia. Structural equation modelling was used to analyse the data. The results revealed that institutional pressures (i.e., governance pressure, customer pressures, and competitive pressure) are key drivers of sustainable development practices and green innovation. They also indicated that sustainable development practices (i.e., environmental sustainability, social sustainability, and economic environmental sustainability) have a significant influence on green innovation. Our findings lead us to propose that green innovation is influenced by external pressures and sustainable development practices.