Green Process Innovation and Financial Performance in Emerging Economies: Moderating Effects of Absorptive Capacity and Green Subsidies

IEEE Transactions on Engineering Management

Volumn 63, Issue 1, 2016, Pages 101-112

  Xie, Xuemei ^a   Huo, Jiage ^a   Qi, Guoyou ^b   Zhu, Kevin Xiaoguo ^c  

^a SHANGHAI UNIVERSITY   (China)

^b EAST CHINA UNIVERSITY OF SCIENCE AND TECHNOLOGY   (China)

^c UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

Absorptive capacity; emerging economies; financial performance; green process innovation; green subsidies

Indexed keywords

FINANCE; INNOVATION; MANUFACTURE; PILES; SULFUR DIOXIDE;

ABSORPTIVE CAPACITY; EMERGING ECONOMIES; FINANCIAL PERFORMANCE; GREEN PROCESS; GREEN SUBSIDIES;

INDUSTRIAL ECONOMICS;

EID: 84962572644     PISSN: 00189391     EISSN: None     Source Type: Journal    
DOI: 10.1109/TEM.2015.2507585     Document Type: Article

References (72)

1. J. F. Molina-Azorín, E. Claver-Cortés, M. D. López-Gamero, and J. J. Tarí, "Green management and financial performance: A literature review, " Manage. Decis., vol. 47, no. 7, pp. 1080-1100, 2009.
2. J. O. Lanjouw and A. Mody, "Innovation and the international diffusion of environmentally responsive technology, " Res. Policy, vol. 25, no. 4, pp. 549-571, 1996.
3. R. Kemp, K. Smith, and G. Becher, How should we study the relationship between environmental regulation and innovation? European Commission, Joint Research Centre, 2000.
4. C. C. J. Cheng, C. Yang, and C. Sheu, "The link between eco-innovation and business performance: A Taiwanese industry context, " J. Clean Prod., vol. 64, pp. 81-90, 2014.
5. T. Y. Chiou, H. K. Chan, F. Lettice, and S. H. Chung, "The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan, " Transp. Res. Part E, Logist. Transp. Rev., vol. 47, no. 6, pp. 822-836, 2011.
6. J. A. Salvadó, G. M. de Castro, J. E. N. López, and M. D. Verde, T. Y. Chiou, H. K. Chan, F. Lettice, and S. H. Chung, "The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan, " Transp. Res. Part E, Logist. Transp. Rev., vol. 47, no. 6, pp. 822-836, 2011.
7. K. Rennings, "Redefining innovation-Eco-innovation research and the contribution from ecological economics, " Ecol. Econ., vol. 32, no. 2, pp. 319-332, 2000.
8. P. del Río González, "Analysing the factors influencing clean technology adoption: A study of the Spanish pulp and paper industry, " Bus. Strategy Environ., vol. 14, no. 1, pp. 20-37, 2005.
9. K. Rennings, A. Ziegler, K. Ankele, and E. Hoffmann, "The influence of different characteristics of the EU environmental management and auditing scheme on technical environmental innovations and economic performance, " Ecol. Econ., vol. 57, no. 1, pp. 45-59, 2006.
10. P. Berrone and L. R. Gomez-Mejia, "Environmental performance and executive compensation: An integrated agency-institutional perspective, " Acad. Manage. J., vol. 52, no. 1, pp. 103-126, 2009.
11. S. L. Hart, "A natural-resource-based view of the firm, " Acad. Manage. Rev., vol. 20, no. 4, pp. 986-1014, 1995.
12. Y. S. Chen, S. B. Lai, and C. T. Wen, "The influence of green innovation performance on corporate advantage in Taiwan, " J. Bus. Ethics, vol. 67, no. 4, pp. 331-339, 2006.
13. A. King and M. Lenox, "Exploring the locus of profitable pollution reduction, " Manage. Sci., vol. 48, no. 2, pp. 289-299, 2002.
14. R. D. Klassen and D. C. Whybark, "The impact of environmental technologies on manufacturing performance, " Acad. Manage. J., vol. 42, no. 6, pp. 599-615, 1999.
15. A. Presley, J. Sarkis, and D. H. Liles, "A soft-systems methodology approach for product and process innovation, " IEEE Trans. Eng. Manage., vol. 47, no. 3, pp. 379-392, Aug. 2000.
16. X. Xu, S. Zeng, and C. Tam, "Stock market's reaction to disclosure of environmental violations: Evidence from China, " J. Bus. Ethics, vol. 107, no. 2, pp. 227-237, 2012.
17. A. J. Hoffman and J. G. Woody, Climate Change: What's Your Business Strategy? Boston, MA, USA: Harvard Business Press, 2008.
18. D. S. Siegel, "Green management matters only if it yields more green: An economic/strategic perspective, " Acad. Manage. Perspect., vol. 23, no. 3, pp. 5-16, 2009.
19. W. M. Cohen and D. A. Levinthal, "Absorptive capacity: A new perspective on learning and innovation, " Admin. Sci. Quart., vol. 35, no. 1, pp. 128-152, 1990.
20. V. De Marchi, "Environmental innovation and R&D cooperation: Empirical evidence from Spanish manufacturing firms, " Res. Policy, vol. 41, no. 3, pp. 614-623, 2012.
21. S. J. Harrington and T. Guimaraes, "Corporate culture, absorptive capacity and IT success, " Inf. Org., vol. 15, no. 1, pp. 39-63, 2005.
22. P. J. Lane, B. R. Koka, and S. Pathak, "The reification of absorptive capacity: A critical review and rejuvenation of the construct, " Acad. Manage. Rev., vol. 31, no. 4, pp. 833-863, 2006.
23. S. Georg, I. Røpke, and U. Jørgensen, "Clean technology: Innovation and environmental regulation, " Environ. Resour. Econ., vol. 2, no. 6, pp. 533-550, 1992.
24. J. Horbach, "Determinants of environmental innovation: New evidence from German panel data sources, " Res. Policy, vol. 37, no. 1, pp. 163-173, 2008.
25. K. Hussinger, "R&D and subsidies at the firm level: An application of parametric and semiparametric two step selection models, " J. Appl. Econ., vol. 23, no. 6, pp. 729-747, 2008.
26. L. R. Newey and S. A. Zahra, "The evolving firm: How dynamic and operating capabilities interact to enable entrepreneurship, " Brit. J. Manage., vol. 20, pp. 81-100, 2009.
27. Y. N. Li, "Environmental innovation practices and performance: Moderating effect of resource commitment, " J. Clean Prod., vol. 66, pp. 450-458, 2014.
28. A. Triguero, L. Moreno-Mondéjar, and M. A. Davia, "Drivers of different types of eco-innovation in European SMEs, " Ecol. Econ., vol. 92, pp. 25-33, 2013.
29. M. E. Porter, "America's green strategy, " Sci. Amer., vol. 264, no. 4, pp. 97-118, 1991.
30. M. E. Porter and C. van der Linde, "Toward a new conception of the environment-competitiveness relationship, " J. Econ. Perspect., vol. 9, no. 4, pp. 97-118, 1995.
31. M. Frondel, J. Horbach, and K. Rennings, "End-of-pipe or cleaner production? An empirical comparison of environmental innovation decisions across OECD countries, " Bus. Strategy Environ., vol. 16, no. 8, pp. 571-584, 2007.
32. C. C. Chien and C. W. Peng, "Does going green pay off in the long run?" J. Bus. Res., vol. 65, no. 11, pp. 1636-1642, 2012.
33. P. Glavic and R. Lukman, "Review of sustainability terms and their definitions, " J. Clean Prod., vol. 15, no. 18, pp. 1875-1885, 2007.
34. H. Hammar and Å. Löfgren, "Explaining adoption of end of pipe solutions and clean technologies: Determinants of firms' investments for reducing emissions to air in four sectors in Sweden, " Energy Policy, vol. 38, no. 7, pp. 3644-3651, 2010.
35. J. Sarkis and J. J. Cordeiro, "An empirical evaluation of environmental efficiencies and firm performance: Pollution prevention versus endof-pipe practice, " Eur. J. Oper. Res., vol. 135, no. 1, pp. 102-113, 2001.
36. K. A. Zotter, "'End-of-pipe' versus 'process-integrated' water conservation solutions: A comparison of planning, implementation and operating phases, " J. Clean Prod., vol. 12, no. 7, pp. 685-695, 2004.
37. P. D. Zhang, "End-of-pipe or process-integrated: Evidence from LMDI decomposition of China's SO2 emission density reduction, " Front. Environ. Sci. Eng., vol. 7, no. 6, pp. 867-874, 2013.
38. A. L. Leal-Rodríguez, J. L. Roldán, J. A. Ariza-Montes, and A. Leal-Millán, "From potential absorptive capacity to innovation outcomes in project teams: The conditional mediating role of the realized absorptive capacity in a relational learning context, " Int. J. Project Manage., vol. 32, no. 6, pp. 894-907, 2014.
39. C. Y. Tseng, D. C. Pai, and C. H. Hung, "Knowledge absorptive capacity and innovation performance in KIBS, " J. Knowl. Manage., vol. 15, no. 6, pp. 971-983, 2011.
40. J. Pinkse, M. J. Kuss, and V. H. Hoffmann, "On the implementation of a 'global' environmental strategy: The role of absorptive capacity, " Int. Bus. Rev., vol. 19, no. 2, pp. 160-177, 2009.
41. J. Horbach, C. Rammer, and K. Rennings, "Determinants of ecoinnovations by type of environmental impact: The role of regulatory push/pull, technology push and market pull, " Ecol. Econ., vol. 78, pp. 112-122, 2012.
42. Q. Lin, G. Chen, W. Du, and H. Niu, "Spillover effect of environmental investment: Evidence from panel data at provincial level in China, " Front. Environ. Sci. Eng., vol. 6, no. 3, pp. 412-420, 2012.
43. J. Amores-Salvadó, G. M.-D. Castro, and J. E. Navas-López, "Green corporate image: Moderating the connection between environmental product innovation and firm performance, " J. Clean Prod., vol. 83, pp. 356-365, 2014.
44. E. Karahanna and D. Preston, "The effect of social capital of the relationship between the CIO and top management team on firm performance, " J. Manage. Inf. Syst., vol. 30, no. 1, pp. 15-56, 2013.
45. M. Li, and Y. Y. Wong, "Diversification and economic performance: An empirical assessment of Chinese firms, " Asia Pac. J. Manage., vol. 20, no. 2, pp. 243-265, 2003.
46. G. Huang and F. M. Song, "The determinants of capital structure: Evidence from China, " China Econ. Rev., vol. 17, no. 1, pp. 14-36, 2006.
47. A. S. Maiga, A. Nilsson, and F. A. Jacobs, "Assessing the interaction effect of cost control systems and information technology integration on manufacturing plant financial performance, " Brit. Account. Rev., vol. 46, no. 1, pp. 77-90, 2014.
48. F. X. Molina-Morales, "European industrial districts: Influence of geographic concentration on performance of the firm, " J. Int. Manage., vol. 7, no. 4, pp. 277-294, 2001.
49. H. Fujii, S. Managi, and S. Kaneko, "Decomposition analysis of air pollution abatement in China: Empirical study for ten industrial sectors from 1998 to 2009, " J. Clean Prod., vol. 59, pp. 22-31, 2013.
50. D. Grover, "The 'advancedness' of knowledge in pollution-saving technological change with a qualitative application to SO2 cap and trade, " Ecol. Econ., vol. 89, pp. 123-134, 2013.
51. Q. Liu and Q. Wang, "Pathways to SO2 emissions reduction in China for 1995-2010: Based on decomposition analysis, " Environ. Sci. Policy, vol. 33, pp. 405-415, 2013.
52. G. Qi, S. Zeng, J. J. Shi, X. Meng, H. Lin, and Q. Yang, "Revisiting the relationship between environmental and financial performance in Chinese industry, " J. Environ. Manage., vol. 145, pp. 349-356, 2014.
53. R. A. Cuesta, C. K. Lovell, and J. L. Zofío, "Environmental efficiency measurement with translog distance functions: A parametric approach, " Ecol. Econ., vol. 68, no. 8, pp. 2232-2242, 2009.
54. G. He, Y. Lu, A. P. J. Mol, and T. Beckers, "Changes and challenges: China's environmental management in transition, " Environ. Dev., vol. 3, pp. 25-38, 2012.
55. J. He, "What is the role of openness for China's aggregate industrial SO2 emission?: A structural analysis based on the Divisia decomposition method, " Ecol. Econ., vol. 69, no. 4, pp. 868-886, 2010.
56. A. A. King and M. J. Lenox, "Does it really pay to be green? An empirical study of firm environmental and financial performance, " J. Ind. Ecol., vol. 5, no. 1, pp. 105-116, 2001.
57. G. George, S. A. Zahra, K. K. Wheatley, and R. Khan, "The effects of alliance portfolio characteristics and absorptive capacity on performance: A study of biotechnology firms, " J. High Technol. Manage. Res., vol. 12, no. 2, pp. 205-226, 2001.
58. A. Escribano, A. Fosfuri, and J. A. Tribó, "Managing external knowledge flows: The moderating role of absorptive capacity, " Res. Policy, vol. 38, no. 1, pp. 96-105, 2009.
59. C. Böhringer, U. Moslener, U. Oberndorfer, and A. Ziegler, "Clean and productive? Empirical evidence from the German manufacturing industry, " Res. Policy, vol. 41, no. 2, pp. 442-451, 2012.
60. M. Arellano and S. Bond, "Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations, " Rev. Econ. Stud., vol. 58, no. 2, pp. 277-297, 1991.
61. S. X. Zeng, X. H. Meng, H. Yin, C. Tam, and L. Sun, "Impact of cleaner production on business performance, " J. Clean Prod., vol. 18, no. 10, pp. 975-983, 2010.
62. D. Hitchens, S. Thankappan, M. Trainor, J. Clausen, and B. De Marchi, "Environmental performance, competitiveness and management of small businesses in Europe, " Tijdschr. Econ. Soc. Geogr., vol. 96, no. 5, pp. 541-557, 2005.
63. M. V. Russo and P. A. Fouts, "A resource-based perspective on corporate environmental performance and profitability, " Acad. Manage. J., vol. 40, no. 3, pp. 534-559, 1997.
64. M. P. Sharfman and C. S. Fernando, "Environmental risk management and the cost of capital, " Strat. Manage. J., vol. 29, no. 6, pp. 569-592, 2008.
65. S. A. Zahra and G. George, "Absorptive capacity: A review, reconceptualization, and extension, " Acad. Manage. Rev., vol. 27, no. 2, pp. 185-203, 2002.
66. D. Esty and A. Winston, Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage. Hoboken, NJ, USA: Wiley, 2009.
67. Q. H. Zhu, Y. Geng, and J. Sarkis, "Motivating green public procurement in China: An individual level perspective, " J. Environ. Manage., vol. 126, pp. 85-95, 2013.
68. Q. H. Zhu and Y. Geng, "Drivers and barriers of extended supply chain practices for energy saving and emission reduction among Chinese manufacturers, " J. Clean Prod., vol. 40, pp. 6-12, 2013.
69. J. A. Aragon-Correa and S. Sharma, "A contingent resource-based view of proactive corporate environmental strategy, " Acad. Manage. Rev., vol. 28, no. 1, pp. 71-88, 2003.
70. F. E. Bowen, "Organizational slack and corporate greening: Broadening the debate, " Brit. J. Manage., vol. 13, no. 4, pp. 305-316, 2002.
71. S. Xu, C. Zhu, and K. Zhu, "Why do firms adopt innovations in bandwagons? Herding under competition in open standards adoption, " Int. J. Technol. Manage., vol. 59, nos. 1/2, pp. 63-91, 2012.
72. K. Zhu, K. Kraemer, and S. Xu, "The process of innovation assimilation by firms in different countries: A technology diffusion perspective, "Manage. Sci., vol. 52, no. 10, pp. 1557-1576, 2006.