Why is institutional pressure insufficient to develop green innovation in manufacturing firms? The role of green high-performance work systems and managerial environmental concern

Abstract

The existing literature points to contradictory empirical data on the relationship between institutional environmental pressure and firm performance in green innovation which leads to firm’s uncertain environmental management practices. To address the paradoxes and ambiguities surrounding this relationship, the current study proposes and empirically analyses an integrated mediated and moderated model. Drawing upon the theory of planned behavior and ability-motivation-opportunity theory, the study examines the mediating role of a green high-performance work systems and the moderating role of managerial environmental concern between institutional pressure and green innovation. Further, in this association, the study also empirically examines a moderated mediation relationship. The data were collected through a structured questionnaire from 260 manufacturing firms from Pakistan. A disjointed two-stage approach in PLS-SEM was used to test the hypotheses in the hierarchal component model The results confirm that the green HPWS partially mediates the association between institutional pressure and green innovation, and this association is also strengthened by managerial environmental concern as a contextual mechanism. However, unexpectedly, the study results did not confirm the conditional mediation hypothesis. The novel findings of this integrated mediated and moderated model have practical implications for managers and policymakers in the manufacturing industry to reform strategies for pursuing green innovation in their products and processes.