Why green absorptive capacity and managerial environmental concerns matter for corporate environmental entrepreneurship?

Abstract

Balancing environmental sustainability and green business growth is one of the primary goals of corporate environmental entrepreneurship, while green entrepreneurship orientation (GEO) represents balanced approaches to maximize green business value-added and maintain environmental performance (EP). Green innovation (GI) strengthens green business efficiencies and drives GEO achievements. Building on the natural resource-based view (NRBV) and dynamic capability view (DCV), this research addressed the critical role of GEO and GI on EP. In addition, the effect of green absorptive capacity (GAC) and managerial environmental concern (MEC) on EP is estimated. The results indicated that GEO significantly affects MEC and GI. While GI positively influences MEC, the relationship between GI and GAC was insignificant. Additionally, GAC and MEC positively and greatly influenced EP. As GAC partially mediates the effect of GEO and GI on EP, MEC also partly mediates the relationship between GI and EP. In the context of the environment, this study presents three quantitative achievements, namely (1) it confirms the vital role of green dynamic capabilities such as GAC to balance GEO's green business agenda and maintain environmental performance, (2) GAC converts knowledge creation to knowledge applications focusing on the development of eco-friendly products and processes to reduce environmental pollution, and (3) MEC determine and focus on GI core competencies to support GEO strategies, (4) GAC level up firms green dynamic capabilities to the level of GEO, and thus maintaining ecosystem and eco-business sustainability. In light of the study outcomes, theoretical and managerial implications were highlighted.

Keywords: Dynamic capability theory; Environmental performance; Green absorptive capacity; Green entrepreneurship orientation; Green innovation; The natural resource-based view.