The moderating effect of environmental dynamism on green product innovation and performance

Environmental management has been researching extensively in the last two decades. Pressure from environmental regulations or policies plays an important role to boost environmental management practices. Nevertheless, the relationship between such pressure and the ultimate firm performance is not very obvious. Although green product innovation has been recognized as a predictor to improve environment performance, there is a lack of discussion in the literature to examine the mediating effect of green product innovation between the aforementioned pressure and firm performance. Additionally, most previous studies adopted a static view which ignores the implications on external dynamic factors in many empirical studies. In this connection, this study contributes to the field of knowledge by filling these two gaps. More specifically, this study: (i) examines the effect of green product innovation on the relationship between pressure of environmental regulations (or policies) and firm performance; and (ii) evaluates the moderating effect of environmental dynamism on the relationship between green production innovation and firm performance. A questionnaire survey is conducted in an emerging country, China, to verify the hypotheses.