Exploring corporate environmental ethics and green creativity as antecedents of green competitive advantage, sustainable production and financial performance: empirical evidence from manufacturing firms

Abstract

PurposeEnvironmental degradation in emerging economies has induced stakeholder pressures on diverse firms to ensure sustainable business performance. Consequently, firms are adopting environmentally ethical cultures and reinforcing green creativity to satisfy stakeholders' environmental needs while attaining green competitive advantage, sustainable production and higher financial performance. The purpose of this study is to investigate whether corporate environmental ethics and green creativity serve as antecedents to higher competitiveness, sustainable production and financial performance, and also examine if green competitive advantage and sustainable production mediate the relationships between corporate environmental ethics, green creativity and financial performance in the context of an emerging economy.Design/methodology/approachThis study using a survey approach examined data from 290 manufacturing small and medium-sized enterprises. Data were analyzed and interpreted using SmartPLS 3.0 software, a variance-based structural equation modelling technique. This modelling technique was adopted due to its suitability for predictive research models.FindingsThe findings show that corporate environmental ethics and green creativity are critical antecedents to green competitive advantage, sustainable production and financial performance. The results connote that while corporate environmental ethics and green creativity directly and robustly influence green competitive advantage, sustainable production and financial performance, their effect on financial performance is strengthened via the indirect effects of green competitive advantage and sustainable production. Contrasting past findings, corporate environmental ethics negatively related to financial performance in this study context. The findings indicate that the integration of environmental ethics and green creativity can be a unique strategy for mitigating environmental negative risks while improving green competitive advantage, sustainable production and financial performance.Originality/valueThe study is among the few that draws insights from organizational ethics and the natural resource-based view (NRBV) to examine the interactions between corporate environmental ethics, green creativity, green competitive advantage, sustainable production and financial performance. Drawing insights from the findings, the study provides suggestions for managers, academicians, policymakers and governments as well as highlights implications and directions for future research.

Green marketing strategy, technology implementation and corporate performance: the role of green creative behaviour and institutional isomorphism

“…This finding is inconsistent with the similar work of Luu ( 2022), which affirmed that employees' green creativity was needed for sustainable tourism services. In addition, Baah et al (2023) also revealed that green creativity was a pivotal precursor to green competitive advantage and financial performance in the manufacturing SME sector. Notwithstanding, our finding supports Gull et al's (2023) argument that organisations' green performance depends on top management's green commitment and adaptability to corporate culture.…”

“…This finding is inconsistent with the similar work of Luu (2022), which affirmed that employees’ green creativity was needed for sustainable tourism services. In addition, Baah et al. (2023) also revealed that green creativity was a pivotal precursor to green competitive advantage and financial performance in the manufacturing SME sector.…”

“…Luu's study also supported employee green creativity to mediate such a link. Indeed, Baah et al (2023) attested that businesses ought to foster green creativity to address the environmental needs of stakeholders while achieving improved financial performance. Meanwhile, the work of Mejia (2019) revealed that green enabling environments and formal green leadership were the main drivers impacting green technology use behaviour in the hotel industry.…”

“…Indeed, Baah et al. (2023) attested that businesses ought to foster green creativity to address the environmental needs of stakeholders while achieving improved financial performance.…”

Fostering environmental preservation: exploring the synergy of green human resource management and corporate environmental ethics

“…On the other hand, Baah et al (2023) posit based on the ethical theory of organizing that CEE not only potentially increases sustainable production but also ensures financial dominance through the continuous accumulation of advantages derived from minimizing negative environmental risks, which enhances green competitive advantage. In accordance with Yazdani and Murad (2015), it is essential to deploy an ethical culture within the firm so that profitability becomes a byproduct under the dominance of ethics, to enhance firm performance.…”