Green business strategy and export performance

Abstract

Purpose Building upon the insights of the resource-based view and contingency theory, the purpose of this paper is to investigate the boundary conditions of green business strategy on the export financial performance of firms from an emerging economy. Design/methodology/approach A quantitative study was conducted to test the conceptual model. In total, 224 questionnaires were collected from exporting manufacturing companies and were analyzed using full information maximum likelihood. Findings The results of the study demonstrate that green business strategy has a strong and positive relationship with export financial performance. Also, environmental orientation and cost leadership play a significant and positive moderating role in this relationship. However, green product differentiation is complementary with green business strategy only when a cost leadership strategy is also maintained. Practical implications The study has practical implications since it identifies green business strategy as an important lever for emerging export managers. More specifically, they have to be aware of the challenges when they operate outside the cost leadership boundaries and should actively seek to develop the environmental orientation of employees and managers. Originality/value This study reveals the relationship between green business strategy and export success for emerging country exporters that are understudied and face unique challenges. In particular, the authors explore the contingency factors that strengthen or weaken the relationship and provide additional insight to the question: “when does it pay to be green?” for exporters from emerging economies.