The nexus of green innovation, cleaner production, and eco-efficiency and their role in environmental sustainability

Abstract

In the current era, the global businesses are more drawn towards concerted efforts on fighting climate change through energy efficiency and environmental sustainability. The manufacturing firms are focusing on innovation practices to develop eco-friendly products and services by improving their dynamic capabilities. This paper compares the mediating effects of closed loop production practices and cleaner production practices on the relationship between product innovation and process innovation with ecoefficiency among firms in the developing region. Based on data collected through surveys from the senior managers of 82 large manufacturing firms, we employed structural equation modelling approach from quantitative analysis to test the four hypotheses based on recent literature. Product and process innovation are both vital for closed loop production and cleaner production practices. Furthermore, closed loop production is observed as a more potent factor as compared to cleaner production practices in achieving eco-efficiency; leading to theoretical extension in RBV meaningful implications for manufacturing management and policy makers.