The Effect of Environmental Orientation on Green Innovation: Do Political Ties Matter?

Abstract

Although the importance of environmental orientation has been recognized, how and under what conditions it influences green innovation is limited. To extend the research on green innovation, our research examines the impacts of two dimensions of environmental orientation on two types of green innovation, as well as the moderating role of political ties. Drawing upon stakeholder theory and resource-based view, we propose research hypotheses. We perform hierarchical regression analysis to validate the hypotheses that is based on survey data collected in 253 Chinese manufacturing companies. Our findings indicate that internal environmental orientation and external environmental orientation are positively linked with both green product innovation and green process innovation. The effect of internal environmental orientation on green process innovation is stronger than that of green product innovation. In addition, political ties strengthen the positive impacts of internal environmental orientation on green product innovation and green process innovation, while attenuating the positive impact of external environmental orientation on green process innovation. These findings contribute to theory and practice by enriching our understanding of how two dimensions of environmental orientation affect two types of green innovation.

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