Abstract
This study aims to investigate the mediation effect of green product and green process innovation by focusing on the role of internal and external environmental orientation over firm performance to expand researches on environmental orientation. With this aim, a conceptual model has been recommended by unifying institutional theory and natural resource-based view. Data collected from 315 firms who have ISO14001 Environmental Management Certificate and took part in Turkey’s first and second ISO 500 Industrial Enterprises list in 2018 have been tested by using SmartPLS 3 software as part of Structural Equation Modelling. Empirical proofs show that internal and external environmental orientation has a positive effect on both green product innovation and green process innovation. Additionally, it has been concluded that internal environmental orientation has a direct positive effect on firm performance, while external environmental orientation has an indirect effect, which is through green product and green process innovation. The reason could be rooted in the ecological responsibility feeling of internal environmental orientation. External environmental orientation, though, could be limited only with fulfilling legal requirements with legitimacy acquiring desire. Firms strategically directed to the green product and green process innovation by doing more than the laws require and taking the lead could increase their firm performance. These findings contribute to theory and practice, enriching our understanding of how two dimensions of environmental orientation affect firm performance. 
Highlights
Recent issues like global warming, ozone layer spoil, air and water pollution, soil erosion and desertation which are price of industrial development for a time over a century stare us in the face as global environmental problems that require urgent solutions
This study aims to enrich the present literature by investigating the mechanism underlying internal and external environmental orientation – firm performance relationship
It has been found that external environmental orientation has a significant positive effect on both green product innovation (EEO→ GPT β; 0.556, t; 12.395, p; 0,000) and green process innovation (EEO→ GPI β; 0.182, t; 4.577, p; 0,000), according to these findings, H1b and H2b hypothesis have been supported
Summary
Recent issues like global warming, ozone layer spoil, air and water pollution, soil erosion and desertation which are price of industrial development for a time over a century stare us in the face as global environmental problems that require urgent solutions. Zehir & Ozgul, International Journal of Research in Business & Social Science, 9(5)(2020) 13-25 and ten critical steps to fight with epidemic diseases have been listed These ten steps underline that business world should turn towards environmentally sustainable investments (energy efficiency and renewable resources etc.), shouldn’t support investments that harm nature (consumption, pollution), and should cooperate with local authorities, governments and individuals to prevent climate change and bio-diversity loss (Gurbuz, 2020). This study aims to enrich the present literature by investigating the mechanism underlying internal and external environmental orientation – firm performance relationship With this aim, green product and green process innovation is being suggested as mediator for the effect of internal and external environmental orientation over firm performance. With this research that investigates the effects of internal and external environmental orientation over both green product and green process innovation, and firm performance, contributions are provided for the literature. We discuss theoretical contributions and provide implications that may be useful for both researchers and managers
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