Mediation-moderation model of green absorptive capacity and green entrepreneurship orientation for corporate environmental performance

Abstract

PurposeDrawing upon the natural resource-based view (NRBV), green absorptive capacity (GAC) is the backbone of firm green dynamic capabilities. It converts the developed knowledge into knowledge application. Understanding how GAC could benefit corporation environmental performance (EP) is still ambiguous and debated. Hence, this study introduced three facilitator factors, namely, managerial environmental concern (MEC), green innovation performance (GIP) and green entrepreneurship orientation (GEO), in which GAC can improve EP. The study tested the moderation effect of GAC and GEO on the MEC-GEO and the MEC-EP relationships and predicted the mediation effect of MEC, GEO and GIP on the GAC-EP relationship.Design/methodology/approachThe quantitative study used a self-administered survey and cross-sectional research design; the study collected data from top management employees working in Chinese manufacturing firms.FindingsThe results indicated that GAC positively influences MEC, GEO and GIP, and these last three constructs influence EP. While MEC positively affects GIP, the MEC-GEO relationship was insignificant. The study found that GAC moderates the MEC-GEO relationship, whereas GEO failed to do so between MEC and EP. The results confirm a partial mediation effect between GAC-EP through the three intermediary constructs.Practical implicationsTo promote EP, firms GAC should prioritize developing MEC ad GIP. Firms' GEO can exploit eco-friendly opportunities enabled by GAC, a process that bridges the existing knowledge and skills gap between MEC and GEO. GAC is one of the leading green strategic capabilities that help GEO to achieve green business growth and better EP. MEC is the process of facilitating GIP to deliver eco-products and protect the external environment. When MEC failed to address GEO's green business agenda, GEO could not enhance EP.Originality/valueThe study highlights the necessity of GAC to develop firms' green dynamic capabilities to boost EP. The study confirms GAC's vital role in strengthening the manager's environmental awareness and bridging the knowledge gap between GEO and MEC. In addition, GIP can drive entrepreneurial green opportunities and enhance EP when GAC is involved and converts knowledge creation to knowledge applications. Strategically speaking, given the importance of the triple green pillars of the NRBV, GEO would not balance green business growth and EP unless GAC leveled up MEC to match GEO's green business agenda and drive EP.