Stakeholder Engagement for Green Process Innovation: Exploring the Link and Boundary Conditions

Abstract

Despite the growing research attention towards the role of stakeholders in developing green innovations, there is limited understanding of the mechanism and specific firm-level conditions under which stakeholder engagement enhances green innovation. Drawing on the Stakeholder theory and the Natural Resource Based View, this paper theorizes that absorptive capacity and risk-taking behaviour are underlying mechanisms and boundary conditions respectively in the stakeholder engagement-green process innovation relationship. The model is tested with survey data obtained from manufacturing firms in Ghana. The results show that absorptive capacity mediates the relationship between stakeholder engagement and green process innovation. Also, the relationship between stakeholder engagement and green process innovation is conditioned by risk-taking behaviour. The implication of these findings for theory and practice is discussed in the text.