Green Strategy Effect on Financial and Environmental Performance: A Mediation Analysis of Product Quality

Abstract

The dilemma of firms in developing economies was the crux of this study. In probing whether the adoption of organization-wide green strategy would enhance the product quality and the firm’s financial lifeline, while also improving the environment, we developed a mediation model. The specific objectives were to ascertain the direct effect of green strategy on both environmental and financial performance and its total effect on both environmental and financial performance through product quality. With data collated and analyzed from 648 respondents, using the Hayes mediation approach, results show that while environmental performance is strongly predicted by green strategy and product quality (as a mediator), financial performance is also positively predicted, but by a smaller effect. The import of the findings of this study is that the adoption of green strategy mediated by product quality improves both environmental and financial performance, implying that firms can remain financially viable while adopting product-focused green strategy.

The Influence of Green Culture and Green Strategy on the Circular Economy Implementation: The Moderating Role of Green Intellectual Capital

“…This supports the results from the previous studies such as Ref. [16,20,52,53]. Batik MSMEs need to implement GS which must be integrated with the program, policy, and budget they owned.…”

“…Tjahjadi et al [53] added that choosing and implementing green innovation strategy can have a significant impact on business performance. The results from the study conducted by Olayeni et al [16] also showed that GS can increase environmental and financial performance.…”

“…A number of research have proved that when companies implement green culture (GC) well, it can have positive impact on business sustainability [10][11][12][13][14][15], especially on environmental performance [10]. Others also proved that green strategy (GS) can have an impact on business sustainability [6,[16][17][18][19]. And ecological behavior [20,21].…”

Model Supporting Development Decisions by Considering Qualitative–Environmental Aspects

“…It was possible to support the decision regarding the prediction of the quality of biofuels being product-friendly for the environment. In turn, in [20], the prediction of organization finance results based on product quality and organization ecological strategy was supported. It was shown that the acceptance of a green strategy maintains financial profitability by simultaneously concentrating on product quality.…”

“…It has been shown that the product quality level can be predicted [14][15][16][17][18]. In addition, the impact of products on the natural environment can be predicted [19][20][21][22]. However, a model that allows for the prediction of pro-quality decisions while simultaneously considering qualitative and environmental aspects is lacking.…”