The Influence of Green Market Orientation on Business Performance: Exploring the Mediating Role of Green Innovation

Abstract

This study examines the impact of green market orientation (GMO) on business performance (BP), emphasizing the mediating role of green innovation (GI). Using a quantitative approach and Partial Least Squares Structural Equation Modelling (PLS-SEM), data were gathered from 128 owners/managers of MSMEs producing green products in northern India. The findings confirm that GMO significantly enhances BP by improving operational efficiency, customer satisfaction, and competitive advantage (e.g., GMO influences BP with a ßcoefficient of 0.78). Additionally, GI is a key mediator, amplifying BP through sustainable practices and green product innovations. Despite these insights, the study is geographically limited and relies on self-reported data. The findings also highlight the critical need for companies to incorporate environmentally friendly strategies into their business practices to ensure enduring sustainability. Future research should explore diverse samples, objective performance measures, and the role of digital technologies in advancing green innovation and business outcomes.