Exploring Institutional Pressures, Green Innovation, and Sustainable Performance: Examining the Mediated Moderation Role of Entrepreneurial Orientation

Abstract

This study aims to understand the multifaceted role of entrepreneurial orientation between institutional pressures, green innovation, and sustainable performance by using institutional theory and the entrepreneurship perspective as a comprehensive theoretical lens. To be more specific, this study not only analyzes the impact of institutional pressures consisting of regulatory, normative, and cognitive pressures on green innovation and the mediating effect of entrepreneurial orientation but also examines the moderating effect of entrepreneurship between green innovation and sustainable performance. Empirical results based on survey data from 483 listed firms in China indicate a positive effect between institutional pressures and green innovation and confirm the mediating effect of entrepreneurial orientation. Meanwhile, between green innovation and sustainable performance, entrepreneurial orientation showed a significant negative moderating effect. Our findings show that institutional pressures can drive corporate green innovation and suggest that entrepreneurial orientation can help achieve green innovation by encouraging them to challenge more innovative environmental practices based on institutional pressure. On the other hand, in firms that have not had enough green innovation, a high entrepreneurial orientation can undermine sustainable performance because it can increase risk.