Green competitive advantage: Examining the role of environmental consciousness and green intellectual capital

Partiwi Dwi Astuti,Luh Kade Datrini

doi:10.5267/j.msl.2020.11.025

Abstract

The purpose of this study was to examine the role of environmental consciousness and green intellectual capital (GIC) for green competitive advantage. The association between environmental consciousness and each component of GIC—green human capital, green relational capital, green structural capital—is tested in this study. Tests are also carried out to examine the association of each GIC element with green competitive advantage. Data were collected using an online questionnaire. A total of 237 questionnaires were sent to the CEOs of medium manufacturing companies in Bali Province, Indonesia. There were 72 returned questionnaires that could be analyzed (a 30.37% usable response rate). Data analysis was performed using variance-based structural equation modelling with the partial least square (SEM-PLS) approach with WarpsPLS 7.0. The findings show that there is a positive and significant association between environmental consciousness and each component of GIC: environmental consciousness with green human capital, environmental consciousness with green relational capital and environmental consciousness with green structural capital. The findings also demonstrate that each component of GIC has a significant positive association with green competitive advantage: green human capital with green competitive advantage, green relational capital with green competitive advantage and green structural capital with green competitive advantage. This research implies that going green through the adoption of green practices can contribute to green competitive advantage.

Highlights

The emergence of various regulations regarding the environment makes environmental issues cannot be underestimated, especially for companies that have the potential to threaten environmental sustainability
The findings demonstrate that each component of green intellectual capital (GIC) has a significant positive association with green competitive advantage: green human capital with green competitive advantage, green relational capital with green competitive advantage and green structural capital with green competitive advantage
This research has succeeded in proving the existence of a relationship between environmental consciousness and GIC—green human capital, green relational capital, green structural capital—which in turn is related to the achievement of green competitive advantage

Summary

Introduction

The emergence of various regulations regarding the environment makes environmental issues cannot be underestimated, especially for companies that have the potential to threaten environmental sustainability. Companies in the manufacturing industry face high green pressure as non-compliance with environmental regulations has many negative impacts (Sharma & Henriques, 2005). Companies in the industry are expected to be more proactive with environmental issues and have a high commitment to sustainability strategies According to Lin and Chen (2016), green competitive advantage is an important factor for organisations to increase the achievement of sustainable development. The application of the concept of sustainable development in the manufacturing industry emphasizes the need for strategical thinking regarding environmental problems. IC is becoming more important than tangible resources in a knowledge-based economy (Allameh, 2018) and is a new approach to solving environmental problems (Omar et al, 2017)

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Conclusion