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Empirical analysis of ESG-driven green innovation: the moderating role of innovation orientation

Bilal Mukhtar (Department of Management and Humanities, Universiti Teknologi PETRONAS, Seri Iskandar, Malaysia)
Muhammad Kashif Shad (Department of Management and Humanities, Universiti Teknologi PETRONAS, Seri Iskandar, Malaysia)
Fong-Woon Lai (Department of Management and Humanities, Universiti Teknologi PETRONAS, Seri Iskandar, Malaysia)
Ahmad Waqas (School of Computing and Information Sciences, Florida International University, North Miami, Florida, USA)

Management & Sustainability: An Arab Review

ISSN: 2752-9819

Article publication date: 30 November 2023

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Abstract

Purpose

The purpose of this study is to examine the influence of ESG practices on green innovation with the moderating effect of innovation orientation in Malaysian manufacturing listed companies.

Design/methodology/approach

This study employed a quantitative research approach by using a well-structured questionnaire for data collection. The questionnaire was distributed to 204 Malaysian manufacturing listed companies in consumer products and services sector. Finally, partial least square-structural equation modeling (PLS-SEM) was utilized to examine the relationship between constructs.

Findings

Based on stakeholder theory, results indicated that environmental, social and governance (ESG) practices significantly improve green innovation. The insignificant moderating effect of innovation orientation was identified between the relationship of environmental and social practices and green innovation. Interestingly, results affirmed the negative moderating effect between the relationship of governance practices and green innovation.

Research limitations/implications

This study is limited to Malaysian manufacturing companies of consumer products and services sector in Bursa Malaysia. Hence, the findings of this study cannot be generalized to manufacturing companies of other geographical contexts.

Practical implications

This work provides constructive implications to management and policymakers of Malaysian manufacturing companies in strategic planning toward enhancing green innovation and developing business competitiveness to achieve sustainable business performance.

Originality/value

This research magnifies valuable insights into the literature through a comprehensive model that simultaneously investigates the relationships between ESG practices, innovation orientation and green innovation. In addition, this is the first attempt to investigate the influence of ESG practices on green innovation with a moderating effect of innovation orientation, which indeed strengthens the originality of this study.

Keywords

Acknowledgements

This research was funded by Ministry of Higher Education (MoHE) of Malaysia through Fundamental Research Grant Scheme (Ref: FRGS/1/2023/SS01/UUM/02/1). The researchers would like to acknowledge the Center of Social Innovation (CoSI) and Management and Humanities Department, Universiti Teknologi PETRONAS, Malaysia for supporting and providing research facilities to conduct this research.

Citation

Mukhtar, B., Shad, M.K., Lai, F.-W. and Waqas, A. (2023), "Empirical analysis of ESG-driven green innovation: the moderating role of innovation orientation", Management & Sustainability: An Arab Review, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MSAR-08-2023-0043

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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