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Corporate environmental responsibility and innovation: empirical evidence from Vietnam

Van Ha Nguyen (Faculty of Finance and Banking, Foreign Trade University, Hanoi, Vietnam)
Nam Hoang Vu (Faculty of International Economics, Foreign Trade University, Hanoi, Vietnam) (IPAG Business School, Paris, France)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 31 January 2022

Issue publication date: 21 November 2023

336

Abstract

Purpose

This study aims to examine the relationship between corporate environmental responsibility (CER) practices and different types of innovation carried out by small- and medium-sized enterprises (SMEs) in Vietnam.

Design/methodology/approach

The authors employ the bivariate probit model and the two-stage least squares regression model to estimate the effects of CER on process innovation and product innovation of SMEs.

Findings

The findings show that while CER is not significantly related to product innovation, it has a positive and significant effect on process innovation. Further analysis indicates that CER engagement increases labor productivity and financial performance of SMEs.

Practical implications

Corporate managers should view implementation of environmental responsibility practices as a strategy to foster process innovation and boost labor productivity and financial performance. For policy makers, government support for firms proactively engaging in CER practices could encourage firms to pursue innovative activities, which are vital to their long-term success as well as to the society's prosperity.

Originality/value

This study makes several important contributions. First, the authors provide new empirical evidence regarding the different effects of engaging in environmentally friendly practices on firm innovation in an under-examined emerging market setting. Second, the authors enrich our understanding of potential benefits of CER implementation. Third, the findings suggest that firm innovation may play a mediating role in the CER–firm performance association.

Keywords

Acknowledgements

Funding: This research is funded by the Ministry of Education and Training Vietnam, under the project number B2021-NTH-05.

Citation

Nguyen, V.H. and Vu, N.H. (2023), "Corporate environmental responsibility and innovation: empirical evidence from Vietnam", International Journal of Emerging Markets, Vol. 18 No. 10, pp. 4524-4544. https://doi.org/10.1108/IJOEM-05-2021-0689

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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