Investor Perception, Green Innovation, and Financial Performance: Insights from Indian Manufacturing Firms

Abstract

In this study the complex relationships between sustainability practices and green innovation in Indian manufacturing firms, focusing on quality management, green process innovation, and green product innovation are examined. The aim of the study was to investigate the impact of green technological advancements and quality management on the financial performance and investor-perceived value of manufacturing firms. The green process and green product innovations implication on financial performance and investor perception was also explored. With the help of Pearson correlation and regression analyses, the study assessed the impact of quality management and green innovations on financial performance and investor perception. The findings revealed a significant positive correlation between green product innovation and investor perception, endorsing environmentally responsible companies to attract higher investments and improve financial prospects. However, no significant positive correlation was found between green process innovation and financial performance, which may be influenced by upfront costs and delayed benefits. Green process innovation moderates the relationship between quality management and investor perception, while green product innovation mediates the relationship between green process innovation and investor perception. These insights highlight the importance of prioritising green product innovation to enhance investor perception and integrate environmental considerations into quality management. The study's results align with Sustainable Development Goal 9, promoting sustainable industrialisation, innovation, and infrastructure in the Indian manufacturing industry, fostering a more resilient and environmentally responsible sector.