The Moderating Role of IT Capability on Green Innovation and Ambidexterity: Towards a Corporate Sustainable Development

Abstract

Green innovation (GI) is widely regarded as a strategy for pursuing sustainable corporate development. Drawing from the organisational information processing theory, this study investigates the moderation effect of information technology (IT) capability in shaping the impacts of ambidexterity and two types of GI practices, green product innovation (GPDI) and green process innovation (GPCI). Using a selective sampling of 368 firms in China, this study validates a 30-item measurement scale and approves the proposed theoretical model. The data obtained were then analysed using the structural equation modelling (SEM) executed by the AMOS 23 application. The results confirm the vital role of two sides of ambidexterity, namely, exploitation and exploration, in improving GI and the positive effects of GI on sustainable corporate development (i.e., environment, social, and financial sustainability). More importantly, IT capability only positively moderates the relationship between GI and one side of ambidexterity, i.e., exploitation. This study contributes to the strategies to better prepare companies in developing markets to achieve GPDI and GPCI as core competencies. Findings also provide evidence for practitioners to invest in GI to facilitate better corporate sustainability.