Determinants And Consequences Of Green Innovation Adoption: A Study On Iso 14001 Manufacturing Firms In Malaysia

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Date
2015-07
Authors
MOHD ZAHARI, FADHILAH
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Abstract
The fact that the sustainability agenda is becoming a central focus globally, Malaysia also is not without exception. Eventually, the country’s aspiration to steer a balance in its development plan and economic growth has triggered the main interest in this research. Following the wisdom of ecological modernization theory that suggests the preventive technological innovation as a powerful means to mitigate the detrimental effect of industrialization on the environment, this study sets to examine the determinants and outcomes of green product and process innovation among ISO 14001 manufacturing firms in Malaysia. Little is known about the determinants of green product and process innovation in the existing literature, despite its significant impact towards environmental sustainability. In doing so, the study integrates both external and internal perspective to enrich the discussion. The study also identifies specific firm capabilities for green innovation, which have not well attended so far, along the other determinants such as institutional pressures and environmental orientation. Further, this study incorporates the moderating effect of business environment context in understanding the conflicting results of green innovation on firm performance. A mail survey approach was used to collect data from ISO 14001 manufacturing firms in Malaysia. The analysis was done using SmartPLS 2.0 to examine the direct and moderating hypotheses. Concerning the determinant factors, results failed to support the hypothesized relationship between institutional pressures and green innovation adoption. Indeed, firms’ environmental orientation and capabilities show some relationships, thus reflects the significance of self regulating policy in ISO 14001 certified firms. On the outcomes part of green innovation adoption, the result strongly affirms the positive implications on environmental performance, while the economic and competitive advantage measures compile mixed findings. Likewise, the moderating relationships were also partially supported. Specifically, only complexity and uncertainty in business environment context has a sound effect in enhancing the implications of green innovation on firm performance. The insights forwarded through this study brings some implications to both theoretical and practical advancements, particularly in the promotion of green innovation in Malaysia. Besides, several potential avenues for future research were identified and proposed. In short, this research provides a more enriching picture of the determinants and outcomes of green innovation adoption, which remains lacking in the current literature.
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Determinants And Consequences Of Green Innovation Adoption , A Study On Iso 14001 Manufacturing Firms In Malaysia
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