Does Green Innovation Improve Firm Performance? Testing the Moderating Effect of CEO Tenure

• Autorzy: Kurnia Cahya Lestari , Noorlailie Soewarno
• Języki publikacji: EN

Abstrakty

EN

Nowadays, green innovation has become a concern because of the global pressure to do business without neglecting environmental sustainability. Thus, this study aims to examine the impact of green innovation (both process and product) on improving firm performance and test whether CEO tenure can affect the relationship between green innovation and firm performance. This study uses panel data from the 2016-2021 period for 108 manufacturing firms in Indonesia, for a total sample of 597 firm-years. This study has executed feasible general least squares (FGLS) to examine the relationship between variables and to control for heteroscedasticity and serial correlation in the research model. In addition, we tested the robustness of the model to confirm the results. The results of the study show that green process innovation (both process and product) has a significant relationship with improving the performance of manufacturing firms in Indonesia. Meanwhile, CEO tenure moderates this relationship by weakening it. This finding suggests that CEO tenure plays an important role in green innovation implementation decisions. This study will be useful for researchers, managers, and policymakers in understanding issues related to the implementation of green innovation in firms. (original abstract)

Słowa kluczowe

EN

Economic performance; Sustainable development; Enterprise innovation

PL

Wyniki gospodarcze; Rozwój zrównoważony; Innowacyjność przedsiębiorstw

• Czasopismo: Contemporary Economics
• Rocznik: 2024
• Tom: 18
• Numer: nr 2
• Strony: 192--209

Twórcy

autor

Kurnia Cahya Lestari

• Universitas Airlangga, Surabaya, Indonesia; Universitas Qomaruddin, Indonesia

autor

Noorlailie Soewarno

• Universitas Airlangga, Surabaya, Indonesia

Bibliografia

• Aastvedt, T. M., Behmiri, N. B., & Lu, L. (2021). Does green innovation damage financial performance of oil and gas companies? Resources Policy, 73(July), 1-10. https://doi.org/10.1016/j.resour-pol.2021.102235
• Aguilera-Caracuel, J., & Ortiz-de-Mandojana, N. (2013). Green Innovation and Financial Performance: An Institutional Approach. Organization and Environment, 26(4), 365-385. https://doi.org/10.1177/1086026613507931
• Agustia, D., Sawarjuwono, T., & Dianawati, W. (2019). The mediating effect of environmental management accounting on green innovation - Firm value relationship. International Journal of Energy Economics and Policy, 9(2), 299-306. https://doi.org/10.32479/ijeep.7438
• Aid, G., Eklund, M., Anderberg, S., & Baas, L. (2017). Expanding roles for the Swedish waste management sector in inter-organizational resource management. Resources, Conservation and Recycling, 124(April), 85-97. https://doi.org/10.1016/j.resconrec.2017.04.007
• Albort-Morant, G., Leal-Rodríguez, A. L., & De Marchi, V. (2018). Absorptive capacity and relationship learning mechanisms as complementary drivers of green innovation performance. Journal of Knowledge Management, 22(2), 432-452. https://doi.org/10.1108/JKM-07-2017-0310
• Arundel, A., & Kemp, R. (2009). Measuring eco-innovation. Unu - Merit, 20(2), 146-146. http://www.globe-expert.eu/quixplorer/filestorage/Interfocus/3-Economie/34-Places_Financieres/34-SRCN-L-UNU-MERIT/200903/Measuring_ecoa??innovation.pdf
• Asni, N., & Agustia, D. (2022). Does corporate governance induce green innovation? An emerging market evidence. Corporate Governance (Bingley), 22(7), 1375-1389. https://doi.org/10.1108/CG-10-2021-0389
• Awan, U., & Sroufe, R. (2021). Exploring the effect of buyer engagement on green product innovation : Empirical evidence from manufacturers. Business Strategy and the Environment, 30(1), 463-477. https://doi.org/10.1002/bse.2631
• Barker, V. L., & Mueller, G. C. (2002). CEO characteristics and firm R&D spending. Management Science, 48(6), 782-801. https://doi.org/10.1287/mnsc.48.6.782.187
• Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. https://doi.org/10.1177/014920639101700108
• Barney, J. B. (1995). Looking inside for competitive advantage. Academy of Management Perspectives, 9(4), 49-61. https://doi.org/10.5465/ame.1995.9512032192
• Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: Ten years after 1991. Journal of Management, 27(6), 625-641. https://doi.org/10.1016/S0149-2063(01)00114-3
• Bendell, B. L., & Nesij Huvaj, M. (2020). Does stakeholder engagement through corporate social and environmental behaviors affect innovation? Journal of Business Research, 119(2020), 685-696. https://doi.org/10.1016/j.jbusres.2018.10.028
• Brasil, M. V. de O., Abreu, M. C. S. de, da Silva Filho, J. C. L., & Leocádio, A. L. (2016). Relationship between eco-innovations and the impact on business performance: an empirical survey research onthe Brazilian textile industry. Revista de Administração, 51(3), 276-287. https://doi.org/10.1016/j.rausp.2016.06.003
• Brulhart, F., Gherra, S., & Quelin, B. V. (2019). Do stakeholder orientation and Environmental proactivity impact firm profitability? Journal of Business Ethics, 158(1), 25-46. https://doi.org/10.1007/s10551-017-3732-y
• Burki, U., & Dahlstrom, R. (2017). Mediating effects of green innovations on interfirm cooperation. Australasian Marketing Journal, 25(2), 149-156. https://doi.org/10.1016/j.ausmj.2017.05.001
• Buttol, P., Buonamici, R., Naldesi, L., Rinaldi, C., Zamagni, A., & Masoni, P. (2012). Integrating services and tools in an ICT platform to support eco-innovation in SMEs. Clean Technologies and Environmental Policy, 14(2), 211-221. https://doi.org/10.1007/s10098-011-0388-7
• Cai, W. G., & Zhou, X. L. (2014). On the drivers of eco-innovation: Empirical evidence from China. Journal of Cleaner Production, 79, 239-248. https://doi.org/10.1016/j.jclepro.2014.05.035
• Cainelli, G., Mazzanti, M., & Zoboli, R. (2011). Environmental innovations, complementarity and local/global cooperation: Evidence from North-East Italian industry. International Journal of Technology, Policy and Management, 11(3-4), 328-368. https://doi.org/10.1504/IJTPM.2011.042090
• Castellacci, F., & Lie, C. M. (2017). A taxonomy of green innovators: Empirical evidence from South Korea. Journal of Cleaner Production, 143, 1036-1047. https://doi.org/10.1016/j.jclepro.2016.12.016
• Chen, Y. S. (2008). The driver of green innovation and green image - Green core competence. Journal of Business Ethics, 81(3), 531-543. https://doi.org/10.1007/s10551-007-9522-1
• Chen, Y. Shan., Lai, S. Bao., & Wen, C. T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67(4), 331-339. https://doi.org/10.1007/s10551-006-9025-5
• Chen, Z., & Chen, G. H. (2017). The influence of green technology cognition in adoption behavior: On the consideration of green innovation policy perception's moderating effect. Journal of Discrete Mathematical Sciences and Cryptography, 20(6-7), 1551-1559. https://doi.org/10.1080/09720529.2017.1390839
• Corrocher, N., & Solito, I. (2017). How do firms capture value from environmental innovations? An empirical analysis on European SMEs. Industry and Innovation, 24(5), 569-585. https://doi.org/10.1080/13662716.2017.1302792
• Cosimato, S., & Troisi, O. (2015). Green supply chain management Practices and tools for logistics competitiveness and sustainability. The DHL case study. The TQM Journal, 27(2), 256-276.
• Cyert, R., & March, J. (1963). A behavioral theory of the firm. Englewood Cliffs, NJ: Prentice-Hal.
• Dai, D., & Xue, Y. (2022). The Impact of Green Innovation on a Firm's Value from the Perspective of Enterprise Life Cycles. Sustainability (Switzerland), 14(3). https://doi.org/10.3390/su14031226
• Dangelico, R. M. (2016). Green Product Innovation: Where we are and Where we are Going. Business Strategy and the Environment, 25(8), 560-576. https://doi.org/10.1002/bse.1886
• de Oliveira, J. A. S., Basso, L. F. C., Kimura, H., & Sobreiro, V. A. (2018). Innovation and financial performance of companies doing business in Brazil. International Journal of Innovation Studies, 2(4), 153-164. https://doi.org/10.1016/j.ijis.2019.03.001
• De Souza, W. J. V., Scur, G., & Hilsdorf, W. D. C. (2018). Ecoinnovation practices in the Brazilian ceramic tile industry: The case of the Santa Gertrudes and Criciúma clusters. Journal of Cleaner Production, 199, 1007-1019. https://doi.org/10.1016/j.jclepro.2018.06.098
• Demirel, P., & Kesidou, E. (2012). Stimulating Different Types of Eco-Innovation in the UK: Government Policies and Firm Motivations. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1718708
• Du, L., Zhang, Z., & Feng, T. (2018). Linking green customer and supplier integration with green innovation performance: The role of internal integration. Business Strategy and the Environment, 27(8), 1583-1595. https://doi.org/10.1002/bse.2223
• Dutton, J. E., & Duncan, R. B. (1987). The creation of momentum for change through the process of strategic issue diagnosis. Strategic Management Journal, 8(3), 279-295. https://doi.org/10.1002/smj.4250080306
• Forcadell, F. J., Úbeda, F., & Aracil, E. (2021). Technological Forecasting & Social Change Effects of environmental corporate social responsibility on innovativeness of. Technological Forecasting & Social Change, 162, 120355. https://doi.org/10.1016/j.techfore.2020.120355
• Fu, R., Tang, Y., & Chen, G. (2020). Chief sustainability officers and corporate social (Ir)responsibility. Strategic Management Journal, 41(4), 656-680. https://doi.org/10.1002/smj.3113
• Grimm, C. M., & Smith, K. G. (1991). Research Notes And Communications Management And Organizational Change: A Note On The Railroad Industry. Strategic Management Journ, 12(7), 557-562.
• Guesalaga, R., Gabrielsson, M., Rogers, B., Ryals, L., & Marcos Cuevas, J. (2018). Which resources and capabilities underpin strategic key account management? Industrial Marketing Management, 75(May), 160-172. https://doi.org/10.1016/j.indmarman.2018.05.006
• Hambrick, D. C., & Fukutomi, G. D. S. (1991). The Seasons of a CEO's Tenure. Academy of Management, 16(4), 719-742.
• Hambrick, D. C., & Mason, P. A. (1984). Upper Echelons: The Organization as a Reflection of Its Top Managers. Academy of Management Review, 9(2), 193-206. https://doi.org/10.5465/amr.1984.4277628
• Hansen, E. G., Grosse-Dunker, F., & Reichwald, R. (2009). Sustainability innovation cube - A framework to evaluate sustainability-oriented innovations. International Journal of Innovation Management, 13(4), 683-713. https://doi.org/10.1142/S1363919609002479
• Hart, S. L. (1995). A Natural-Resource-Based View of the Firm Author ( s ): Stuart L . Hart Source : The Academy of Management Review , Oct ., 1995 , Vol . 20, No . 4 ( Oct ., 1995 ), pp . Published by : Academy of Management Stable URL : https://www.jstor.org/stable/258963. 20(4), 986-1014.
• Hellström, T. (2007). Dimensions of Environmentally Sustainable Innovation : the Structure of Eco-Innovation Concepts. Sustainable Development, 15(3), 148-159.
• Herrmann, P., & Datta, D. K. (2002). CEO Successor Characteristics and the Choice of Foreign Market Entry M An Empirical Study. Journal Of International Business Studies, 33(3), 551-569.
• Hizarci-Payne, A. K., İpek, İ., & Kurt Gümüş, G. (2021). How environmental innovation influences firm performance: A meta-analytic review. Business Strategy and the Environment, 30(2), 1174-1190. https://doi.org/10.1002/bse.2678
• Huang, Z., Liao, G., & Li, Z. (2019). Loaning scale and government subsidy for promoting green innovation. Technological Forecasting and Social Change, 144(April), 148-156. https://doi.org/10.1016/j.techfore.2019.04.023
• Jaw, Y. L., & Lin, W. T. (2009). Corporate elite characteristics and firm's internationalization: CEO-level and TMT-level roles. International Journal of Human Resource Management, 20(1), 220-233. https://doi.org/10.1080/09585190802528797
• Kallio, T. J., & Nordberg, P. (2006). The Evolution of organizations and natural environment discourse: Some critical remarks. Organization and Environment, 19(4), 439-457. https://doi.org/10.1177/1086026606294955
• Kammerer, D. (2009). The effects of customer bene fi t and regulation on environmental product innovation . Empirical evidence from appliance manufacturers in Germany ☆. Ecological Economics, 68(8-9), 2285-2295. https://doi.org/10.1016/j.ecolecon.2009.02.016
• Khanra, S., Kaur, P., Joseph, R. P., Malik, A., & Dhir, A. (2022). A resource-based view of green innovation as a strategic firm resource: Present status and future directions. Business Strategy and the Environment, 31(4), 1395-1413. https://doi.org/10.1002/bse.2961
• Klewitz, J., & Hansen, E. G. (2013). Sustainability-oriented innovation of SMEs : a systematic review. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2013.07.017
• Lee, J. W., & Wie, D. (2015). Technological change, skill demand, and wage inequality: Evidence from Indonesia. World Development, 67, 238-250. https://doi.org/10.1016/j.worlddev.2014.10.020
• Lee, K. H., & Kim, J. W. (2011). Integrating suppliers into green product innovation development: An empirical case study in the semiconductor industry. Business Strategy and the Environment, 20(8), 527-538. https://doi.org/10.1002/bse.714
• Li, M., & Yang, J. (2019). Effects of CEO duality and tenure on innovation. Journal of Strategy and Management, 12(4), 536-552. https://doi.org/10.1108/JSMA-04-2019-0049
• Li, Y. (2014). Environmental innovation practices and performance: Moderating effect of resource commitment. Journal of Cleaner Production, 66, 450-458. https://doi.org/10.1016/j.jclepro.2013.11.044
• Lin, R. J., Tan, K. H., & Geng, Y. (2013). Market demand, green product innovation, and firm performance: Evidence from Vietnam motorcycle industry. Journal of Cleaner Production, 40, 101-107. https://doi.org/10.1016/j.jclepro.2012.01.001
• Ling, Y. H. (2019). Examining green policy and sustainable development from the perspective of differentiation and strategic alignment. Business Strategy and the Environment, 28(6), 1096-1106. https://doi.org/10.1002/bse.2304
• Miller, D. (1991). Stale in the saddle: CEO tenure and the match between organization and environment. Management Science, 37(1), 34-52. https://doi.org/10.1287/mnsc.37.1.34
• Miller, D., & Shamsie, J. (2001). Learning across the life cycle: Experimentation and performance among the Hollywood studio heads. Strategic Management Journal, 22(8), 725-745. https://doi.org/10.1002/smj.171
• Muangmee, C., Dacko-Pikiewicz, Z., Meekaewkunchorn, N., Kassakorn, N., & Bilal, K. (2021). Green Entrepreneurial Orientation and Green Innovation in. Social Sciences, 10(4), 1-15. https://doi.org/10.3390/socsci10040136
• Mufidah, I., Jiang, B. C., Lin, S. C., Chin, J., Rachmaniati, Y. P., & Persada, S. F. (2018). Understanding the consumers' behavior intention in using green ecolabel product through Pro-Environmental Planned Behavior model in developing and developed regions: Lessons learned from Taiwan and Indonesia. Sustainability (Switzerland), 10(5), 1-15. https://doi.org/10.3390/su10051423
• Naveen, L. (2006). Organizational complexity and succession planning. Journal of Financial and Quantitative Analysis, 41(3), 661-683. https://doi.org/10.1017/S002210900000257X
• Ogbeibu, S., Jabbour, C. J. C., Gaskin, J., Senadjki, A., & Hughes, M. (2021). Leveraging STARA competencies and green creativity to boost green organisational innovative evidence: A praxis for sustainable development. Business Strategy and the Environment, 30(5), 2421-2440. https://doi.org/10.1002/bse.2754
• Olsen, M. C., Slotegraaf, R. J., & Chandukala, S. R. (2014). Green claims and message frames: How green new products change brand attitude. Journal of Marketing, 78(5), 119-137. https://doi.org/10.1509/jm.13.0387
• Olson, E. L. (2014). Green Innovation Value Chain analysis of PV solar power. Journal of Cleaner Production, 64, 73-80. https://doi.org/10.1016/j.jclepro.2013.07.050
• Palmer, K., Oates, W. E., & Portney, P. R. (1995). Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm? Journal of Economic Perspective, 9(4), 119-132. https://doi.org/10.1257/jep.9.4.119
• Rennings, K., & Rammer, C. (2011). The Impact of Regulation-Driven Environmental Innovation on Innovation Success and Firm Performance The Impact of Regulation-Driven Environmental Innovation on Innovation Success and Firm Performance. Industry & Innovation, 18(3), 255-283. https://doi.org/10.1080/13662716.2011.561027
• Roscoe, S., Cousins, P. D., & Lamming, R. C. (2015). Dveloping eco-innovations : a three-stage typology of supply networks. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2015.06.125
• Roy, M., & Khastagir, D. (2016). Exploring role of green management in enhancing organizational efficiency in petro-chemical industry in India. Journal of Cleaner Production, 121, 109-115. https://doi.org/10.1016/j.jclepro.2016.02.039
• Salim, N., Ab Rahman, M. N., & Abd Wahab, D. (2019). A systematic literature review of internal capabilities for enhancing eco-innovation performance of manufacturing firms. Journal of Cleaner Production, 209, 1445-1460. https://doi.org/10.1016/j.jclepro.2018.11.105
• Seman, N. A. A., Govindan, K., Mardani, A., Zakuan, N., Saman, M. Z. M., Hooker, R. E., & Ozkul, S. (2019). The mediating effect of green innovation on the relationship between green supply chain management and environmental performance. Journal of Cleaner Production, 229, 115-127. https://doi.org/10.1016/j.jclepro.2019.03.211
• Sezen, B., & Çankaya, S. Y. (2013). Effects of Green Manufacturing and Eco-innovation on Sustainability Performance. Procedia - Social and Behavioral Sciences, 99, 154-163. https://doi.org/10.1016/j.sbspro.2013.10.481
• Simsek, Z. (2007). CEO tenure and organizational performance: An intervening model. Strategic Management Journal, 28(6), 653-662. https://doi.org/10.1002/smj.599
• Soewarno, N., & Tjahjadi, B. (2020). Mediating effect of strategy on competitive pressure, stakeholder pressure and strategic performance management (SPM): evidence from HEIs in Indonesia. Benchmarking, 27(6), 1743-1764. https://doi.org/10.1108/BIJ-06-2019-0292
• Szutowski, D. (2021). The impact of eco-innovation on the stock returns of technology-based KIBS: role of eco-innovation type and its degree of novelty. Sustainability Accounting, Management and Policy Journal, 12(1), 130-155. https://doi.org/10.1108/SAM-PJ-10-2019-0375
• Takalo, S. K., Tooranloo, H. S., & Parizi, Z. S. (2021). Green innovation: A systematic literature review. Journal of Cleaner Production, 279, 122474. https://doi.org/10.1016/j.jclepro.2020.122474
• Tate, W. L., & Bals, L. (2018). Achieving Shared Triple Bottom Line (TBL) Value Creation: Toward a Social Resource-Based View (SRBV) of the Firm. Journal of Business Ethics, 152(3), 803-826. https://doi.org/10.1007/s10551-016-3344-y
• Tseng, M. L., Wang, R., Chiu, A. S. F., Geng, Y., & Lin, Y. H. (2013). Improving performance of green innovation practices under uncertainty. Journal of Cleaner Production, 40, 71-82. https://doi.org/10.1016/j.jclepro.2011.10.009
• van der Waal, J. W. H., Thijssens, T., & Maas, K. (2021). The innovative contribution of multinational enterprises to the Sustainable Development Goals. Journal of Cleaner Production, 285. https://doi.org/10.1016/j.jclepro.2020.125319
• Weng, D. H., & Lin, Z. (John). (2014). Beyond CEO Tenure: The Effect of CEO Newness on Strategic Changes. Journal of Management, 40(7), 2009-2032. https://doi.org/10.1177/0149206312449867
• Xie, X., Huo, J., & Zou, H. (2019). Green process innovation, green product innovation, and corporate financial performance: A content analysis method. Journal of Business Research, 101, 697-706. https://doi.org/10.1016/j.jbusres.2019.01.010
• Yousaf, U. Bin, Ullah, I., Wang, M., Junyan, L., & Rehman, A. U. (2022). Does board capital increase firm performance in the Chinese tourism industry? Corporate Governance (Bingley), 22(4), 653-679. https://doi.org/10.1108/CG-04-2021-0165
• Zhang, Q., Zhang, J., & Tang, W. (2017). Coordinating a supply chain with green innovation in a dynamic setting. 4or, 15(2), 133-162. https://doi.org/10.1007/s10288-016-0327-x
• Zhou, K. Z., Brown, J. R., & Dev, C. S. (2009). Market orientation , competitive advantage , and performance : A demand-based perspective. Journal of Business Research, 62(11), 1063-1070. https://doi.org/10.1016/j.jbusres.2008.10.001

Identyfikatory

DOI

10.5709/ce.1897-9254.533