Exploring corporate environmental ethics and green creativity as antecedents of green competitive advantage, sustainable production and financial performance: empirical evidence from manufacturing firms

Abstract

Purpose

Environmental degradation in emerging economies has induced stakeholder pressures on diverse firms to ensure sustainable business performance. Consequently, firms are adopting environmentally ethical cultures and reinforcing green creativity to satisfy stakeholders' environmental needs while attaining green competitive advantage, sustainable production and higher financial performance. The purpose of this study is to investigate whether corporate environmental ethics and green creativity serve as antecedents to higher competitiveness, sustainable production and financial performance, and also examine if green competitive advantage and sustainable production mediate the relationships between corporate environmental ethics, green creativity and financial performance in the context of an emerging economy.

Design/methodology/approach

This study using a survey approach examined data from 290 manufacturing small and medium-sized enterprises. Data were analyzed and interpreted using SmartPLS 3.0 software, a variance-based structural equation modelling technique. This modelling technique was adopted due to its suitability for predictive research models.

Findings

The findings show that corporate environmental ethics and green creativity are critical antecedents to green competitive advantage, sustainable production and financial performance. The results connote that while corporate environmental ethics and green creativity directly and robustly influence green competitive advantage, sustainable production and financial performance, their effect on financial performance is strengthened via the indirect effects of green competitive advantage and sustainable production. Contrasting past findings, corporate environmental ethics negatively related to financial performance in this study context. The findings indicate that the integration of environmental ethics and green creativity can be a unique strategy for mitigating environmental negative risks while improving green competitive advantage, sustainable production and financial performance.

Originality/value

The study is among the few that draws insights from organizational ethics and the natural resource-based view (NRBV) to examine the interactions between corporate environmental ethics, green creativity, green competitive advantage, sustainable production and financial performance. Drawing insights from the findings, the study provides suggestions for managers, academicians, policymakers and governments as well as highlights implications and directions for future research.

Citation

Baah, C., Agyabeng-Mensah, Y., Afum, E. and Lascano Armas, J.A. (2024), "Exploring corporate environmental ethics and green creativity as antecedents of green competitive advantage, sustainable production and financial performance: empirical evidence from manufacturing firms", Benchmarking: An International Journal, Vol. 31 No. 3, pp. 990-1008. https://doi.org/10.1108/BIJ-06-2022-0352