Innovation Capabilities, Environmentally Sustainable Practices and Export Competitiveness: An Exploratory Study of Firms From India

Abstract

India — the land of frugal innovation — is striving hard to catch up on its innovation capabilities. However, its inability to achieve balances on multiple fronts even 74 years after its independence indicates the presence of some underlying problems of competitiveness —both at the macro- as well as micro-levels. In this study, we build upon and extend the competitiveness Assets–Processes–Performance (APP) framework and try to diagnose such problems at the micro-level (i.e. firm level). We specifically try to understand the effect of environmentally sustainable practices (ESPs) on the relationship between innovation capabilities and export competitiveness (EC) of firms. Methodologically, we draw insights from both the theoretical (extant literature) as well as the observational (comprised of a purposive sample of select firms) realms. Our findings indicate that firms of Indian origin (FIOs) which are ahead of the rest in terms of their ESPs, fare better in terms of their EC. We propose a conceptual framework, wherein we posit that ESPs can moderate the relationship between innovation capabilities and EC. We also draw implications for theory and practice and discuss the avenues for future research.