Example 03_Tariq, Badir, 2019, green innovatin and performance

Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) European Journal of Innovation Management Green innovation and performance: moderation analyses from Thailand Adeel Tariq, Yuosre Badir, Supasith Chonglerttham, Article information: To cite this document: Adeel Tariq, Yuosre Badir, Supasith Chonglerttham, (2019) \"Green innovation and performance: moderation analyses from Thailand\", European Journal of Innovation Management, https:// doi.org/10.1108/EJIM-07-2018-0148 Permanent link to this document: https://doi.org/10.1108/EJIM-07-2018-0148 Downloaded on: 03 January 2019, At: 18:46 (PT) References: this document contains references to 74 other documents. To copy this document: [email protected] Access to this document was granted through an Emerald subscription provided by Token:Eprints:N84cRSZXXPM9ZUg2YNB4: For Authors If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services. Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. *Related content and download information correct at time of download.

The current issue and full text archive of this journal is available on Emerald Insight at: www.emeraldinsight.com/1460-1060.htm Green innovation and Green performance: moderation innovation and analyses from Thailand performance Adeel Tariq, Yuosre Badir and Supasith Chonglerttham Received 13 July 2018 Revised 16 October 2018 School of Management, Asian Institute of Technology, Bangkok, Thailand Accepted 29 November 2018 Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) Abstract Purpose – The purpose of this paper is to investigate the influence of green product innovation performance (GPIP) on a firm’s financial performance (i.e. a firm’s profitability and risk). In addition, it has adopted the resource-based view and contingency theory to explore how GPIP and a firm’s financial performance relationship is manifested when subject to the moderating role of a firm’s market resource intensity and certain environmental factors, such as technological turbulence and market turbulence. Design/methodology/approach – Data were collected from 202 publicly listed Thai manufacturing firms. This research has used hierarchical regression analyses to empirically test the proposed research hypotheses. Findings – The findings reveal that GPIP exerts a significant influence on a firm’s financial performance, i.e. higher the GPIP, higher the firm’s profitability and lower the firm’s financial risk. Moreover, findings support the theoretical assertions that the higher level of market resource intensity, market turbulence and technological turbulence further strengthens GPIP and a firm’s financial performance relationship. Originality/value – By considering the independent moderating role of market resource intensity, market turbulence and technological turbulence, this research has contributed to reconcile the previously disparate findings regarding the GPIP and a firm’s financial performance relationship. Moreover, this research has highlighted the role of the essential moderators that business managers must understand and adjust to capitalize on and achieve superior financial performance. Keywords Technological turbulence, Green product innovation performance, Market resource intensity, Market turbulence, Firm’s financial performance Paper type Research paper Introduction European Journal of Innovation In response to the increase in environmental concerns, firms have incorporated Management sustainability into their innovation strategy – i.e. green innovation – to remain competitive and mitigate any harmful effect on the environment. However, incorporating © Emerald Publishing Limited green innovation needs to align with a firm’s strategic objectives to remain adequately 1460-1060 profitable (Li, 2014). Firms need to address the critical question of whether involvement in green innovation enhances the financial performance (Cronin et al., 2011). Even though DOI 10.1108/EJIM-07-2018-0148 researchers have extensively investigated green innovation and firms’ financial performance relationship, the relevant literature has offered only mixed results (Przychodzen and Przychodzen, 2014; Grewatsch and Kleindienst, 2017), and falls short of resolving the managerial concerns regarding the green innovation and financial performance relationship. For example, a compelling body of literature has reported the presence of a positive relationship between green innovation and financial performance (Li, 2014; Przychodzen and Przychodzen, 2014; Doran and Ryan, 2012; Kam-Sing Wong, 2012), while others have suggested a negative, insignificant or U-shaped relationship (Trumpp and Guenther, 2015; Testa and D’Amato, 2017). Because of these mixed findings, green innovation and its relationship with financial performance remain a question for debate, and thus require further investigation (Dangelico, 2015; Tariq et al., 2017; Molina-Azorín et al., 2009). We argue that the following possible reasons may explain the inconsistency The authors are thankful to Dr Mir Dost for his help to improve earlier version of the manuscript.

EJIM in the previous research results regarding green innovation and a firm’s financial performance relationship. Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) First, mostly earlier research did not differentiate clearly between the different types of green innovation (Tariq et al., 2017). For instance, research shows that there are different types of innovation (e.g. product, service, process, management and business model innovation); each type has a different antecedent (Murat Ar and Baki, 2011; Dost et al., 2016) and performance consequences (Damanpour et al., 2009). Therefore, studies concerning green innovation have not generated congruent findings. To deepen the knowledge and provide fine-grained results, it is imperative to reflect on particular types of green innovation (Amores-Salvadó et al., 2014). Therefore, this research focuses on green products’ innovation performance (GPIP), as this is a more precise measure to reflect a firm’s overall environmental management effort (Albertini, 2013). Second, the inconclusive findings reported in previous literature could be attributed to the different measures applied to financial performance (Przychodzen and Przychodzen, 2014). Selection of the suitable financial measures can influence the level of green innovation and a firm’s financial performance relationship, as each of these measures has specific advantages and disadvantages. In line with Hart and Ahuja (1996) and Albertini (2013), we have adopted accounting measure (i.e. the return on assets (ROA) and the return on equity (ROE)) to measure a firm’s profitability, as these are better indicators to examine the green innovation and a firm’s profitability relationship. Furthermore, the majority of studies investigating GPIP and firm’s financial performance relationship have exclusively focused on a firm’s profitability rather than the risk (Amores-Salvadó et al., 2014; Chan et al., 2016), whereas researchers have argued that a firm’s true performance manifests itself in terms of both higher profitability and reduced risk (Orlitzky and Benjamin, 2001). Therefore, this research has analyzed the influence of GPIP on a firm’s profitability and risk. Third, inconclusive results suggest that to examine the influence of GPIP on a firm’s financial performance, it is integral to scrutinize the potential moderating role of a firm’s internal resources and the external environmental factors. Exploring the moderating role of a firm’s internal resources and external environmental factors may help to resolve the inconsistency between the GPIP and a firm’s financial performance relationship. Literature has acknowledged the significance of a firm’s internal resources to translate green innovation effort into improved environmental and financial performance (Li, 2014). Therefore, this research has been grounded on the resource-based view to explore the potential moderating role of a firm’s market resource intensity. We have focused on the market resource as it communicates a firm’s GPIP efforts to customers and other stakeholders, as this is likely to augment the GPIP influence on a firm’s financial performance (Fisman et al., 2006). In addition, the performance impact of the internal resources becomes more significant when they are deployed according to a firm’s environmental context (Lippman and Rumelt, 2003). This requires researchers to go beyond the resource-based view to understand how a firm can attain better performance, while subject to certain external environmental factors (Kraaijenbrink et al., 2010). In this regard, researchers have claimed that the external environment of a firm has a significant influence on the firm’s strategy and the financial performance relationship (Tsai and Yang, 2013; Jaworski and Kohli, 1993; Hung and Chou, 2013); therefore, a firm’s survival is contingent on its ability to face and align with a variety of external environmental factors (Miller and Friesen, 1983). Likewise, Aragón-Correa and Sharma (2003) proposed that the green innovation positive impact on a firm’s competitiveness depends on the environmental factors that influence each firm differently. Thus, this research drew on the contingency theory to analyze the potential moderating role of various external environmental factors regarding the GPIP and a firm’s financial performance relationship, which, with the

exception of Chan et al.’s (2016) environmental dynamism, most of the previous studies Green have not considered in terms of GPIP and a firm’s financial performance relationship. innovation and This research has emphasized the independent moderating role of market turbulence and technological turbulence because scholars consistently highlight their importance in performance examining a firm’s strategy and performance relationship ( Jaworski and Kohli, 1993; Hung and Chou, 2013; Tsai and Yang, 2013). Therefore, this research has addressed two research questions: RQ1. What is the influence of GPIP on a firm’s profitability and risk? RQ2. How does the influence of the GPIP on the firm’s profitability and risk vary across the influences of market resource intensity, market turbulence and technological turbulence? Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) The present research contribution to green product innovation literature is threefold. First, unlike previous literature on green innovation, this research adds value to the literature by considering the influence of GPIP on two distinct facets of a firm’s financial performance, i.e. a firm’s profitability and risk. Although researchers have investigated the GPIP influence on a firm’s profitability, the empirical evidence examining the influence of GPIP on a firm’s risk is limited. It is imperative to account for a firm’s risk, since higher risk could result in numerous unpleasant events, including layoffs, which are relevant to a firm’s management in their decision-making process (Miller and Bromiley, 1990). Therefore, this research offers further insight and additional clarity concerning the ongoing debate of “Does it pay to be green?” Second, this research contributes by highlighting the importance of the potential moderators in response to recent environmental management scholars who call to investigate the extent that potential moderators have influence on GPIP and a firm’s financial performance relationship (Dangelico, 2015; Tariq et al., 2017; Grewatsch and Kleindienst, 2017). Chan et al. (2016) considered the combined effect of the environmental factors (market turbulence and technological turbulence) on GPIP and a firm’s profitability relationship; however, their findings have not considered the independent effect of these environmental factors which may not necessarily be combined in the real corporate environment. In addition, Turulja and Bajgoric (2018) claimed recently that environmental factors do not moderate the innovation and a firm’s performance relationship. These studies have improved understanding of the topic, but inconsistent findings and a lack of systematic attention to better understand the independent moderating influence of market turbulence and technological turbulence are paramount, as they are likely to facilitate a firm’s superior financial performance based on GPIP. Third, this research contributes to the literature by incorporating the moderating role of a firm’s critical market resources. To the authors’ best knowledge, this research is the first to examine the influence of both a firm’s internal market resources and the external market turbulence and technological turbulence on GPIP and a firm’s financial performance, which are important to provide feedback and information to the management’s decision makers. Thus, this research bridges the theoretical and empirical research gap, and permits business managers to comprehend the effect of the potential moderating factors in order to capitalize on and achieve superior financial performance. This research is conducted in an emerging industrialized economy of Thailand. Taking additional evidence from emerging economies is important as majority of the existing studies on green innovation are largely restricted to western firms, and industrialized economies of Asia such as China (Grewatsch and Kleindienst, 2017); moreover, being heavily industrialized, emerging economies can pose a serious threat to environmental sustainability (Chaowanapong et al., 2018). Existing research findings from western countries provide useful insights, but it is required to test whether they are generalizable in the context of emerging economy.

EJIM Literature review and research hypotheses Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) Green product innovation performance Due to its increasing importance, research on green product innovation has increased remarkably over the past few decades (Tariq et al., 2017). GPIP is defined as “performance in product innovation that is related to environmental innovation, including innovation in the product that are involved in the energy-saving, pollution prevention, waste recycling, no toxicity or green products design” (Chen et al., 2006, p. 334). This research focuses on GPIP for several reasons: recently, many manufacturers have adopted the concept of green into their product innovation performance to reduce undesired waste, increase input efficiency and to be more competitive (Chen et al., 2006); product performance in terms of usage and disposal has a more extreme impact on the environment, rather than their production (Kammerer, 2009); and, moreover, GPIP ensures that green firms products are “new” enough to differentiate themselves from rival products and “green” enough to ensure eco concerns (Amores-Salvadó et al., 2014). GPIP and firm’s financial performance Literature has produced mixed findings regarding green innovation and financial performance relationship (Przychodzen and Przychodzen, 2014). Based on a critical review, Grewatsch and Kleindienst (2017) documented that 59 percent studies find a positive relationship and 41 percent studies report insignificant or mixed results between firm green efforts and a firm’s financial performance. Literature supporting a positive relationship suggests that addressing environmental concerns improves a firm’s competitive position because environmental improvement efforts reduce compliance and production cost (Porter and Van der Linde, 1995). Effective execution of GPIP positively influences a firm’s financial performance, as it increases productivity, creates differentiated advantage and establishes a firm’s good reputation (Przychodzen and Przychodzen, 2014; Lin et al., 2013; Kam-Sing Wong, 2012). Researchers reporting a negative relationship claim that a firm faces a trade-off between green innovation and performance relationship because environmental efforts are an additional cost burden for the firm, and could add to its economic disadvantage (Walley and Whitehead, 1994). Researchers have claimed that the GPIP and financial performance direct relationship cannot be established due to difficulty in measuring green product innovation and different measures used for operationalization (King and Lenox, 2001), the selection of different measures for financial performance (Albertini, 2013) and failure to integrate potential moderators role (Grewatsch and Kleindienst, 2017). This research addresses the highlighted lacking in the literature, and for this, it specifically focuses on GPIP to address the inconclusive findings (Tariq et al., 2017; Albertini, 2013). This research adopts theoretical underpinnings of Porter and Van der Linde’s (1995) hypothesis to substantiate the impact of GPIP on firm’s financial performance. This hypothesis states that the effective execution of GPIP counterbalances a firm’s implementation costs and competitive advantage because pollution is a form of inefficient utilization of resources, and addressing such inefficiency can enhance competitiveness, which subsequently leads to improve financial performance. Literature has identified different advantages a firm can avail from GPIP: improve productivity through the efficient utilization of input resources (Aguado et al., 2013); differentiation advantage resulted from environmental friendly and improved product attributes (Albertini, 2013); and establishing a strong firm environmental friendly reputation (Chen et al., 2006). Therefore, we argue that GPIP is a source to improve profitability and shall not be taken as an additional burden for the firm and, thus, we expect a positive relationship between GPIP and firm’s profitability: H1. Higher performance of green product innovation is positively related to a firm’s profitability.

Literature on GPIP and firm’s financial performance relationship has extensively Green investigated the influence of GPIP on a firm’s profitability; thus, we have added innovation and empirical evidence to literature by arguing and investigating the GPIP and a firm’s risk relationship. It is pertinent to emphasize on a firm’s risk as managers may be more performance concerned about risk incurred by their firm, as it could impair forecasting and planning activities, and increase variability in a firm’s profitability (Miller and Bromiley, 1990). We argue that higher GPIP permits green firm to have a lower financial risk due to its stable relationship with government, customers, employees, financial institutions and other environmentally concern stakeholders. For example, firms with higher GPIP do not need to worry about increasingly government penalties and fines for poor environmental performance and customer actions to boycott a firm’s products for non-sustainable practices. Moreover, green firms compelling reputation improve their ability to avail constant supply of capital from a financial institution, which also lower a firm’s risk and stabilize their cash flows. This argument is in line with Sharfman and Fernando (2008), who claimed that the mitigation of pollution and hazardous substances leads to reduced Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) litigation risk and enhances a firm’s profitability and lowers a firm’s risk. Contrary to this, a firm with lower GPIP can suffer from higher risk because it could be subject to government penalties, customers’ boycott of their non-sustainable products and the financial institution can decline capital supply to them. Drawing on above argument, we hypothesize that: H2. Higher performance of green product innovation is negatively related to a firm’s risk. Firm resources This research relied on resource-based view to investigate the moderating role of market resource intensity. Resource-based view argues that firms with unique and non-imitable resources are likely to outperform their competitor and sustain a competitive position (Barney, 1991). Firms earn heterogeneous performance due to the difference in resources, and it subsequently leads to a better competitive position (Amores-Salvadó et al., 2014). We focus on market resource intensity to investigate GPIP and a firm’s financial performance relationship because it is likely to magnify a firm’s environmental friendly reputation and differentiation advantage. Moderating role of market resource intensity Market resource intensity explains the extent to which a firm invests in drawing customer attention toward its strategy (Slotegraaf et al., 2003). It is regarded as an effective means to augment GPIP beneficial effects because it communicates green firms’ differentiation advantage based on environmental friendly product attributes (Fisman et al., 2006). It also signals a positive message to customers and other concern stakeholders about a firm’s GPIP efforts which ultimately strengthen a firm’s reputation and improve financial performance (De Boer, 2003). Wagner (2010) evaluated the market resource intensity moderation effect on the firm sustainability and firm performance linkages but specific evidence pertaining to the effect of market resources intensity on GPIP and a firm’s financial performance (specifically a firm’s risk) relationship is lacking which necessities examining its further potential moderating role. We argue that although GPIP improves firm’s financial performance through improved productivity, differentiation advantage and strong reputation, without committed market resources, firms are less likely to signal a positive message to draw a customer’s attention toward its green efforts. GPIP needs committed market resources to promote firm green engagements, and signal its differentiated products attributes to extend customer base. In the same vein, to stress the importance of market resource intensity, Wagner (2010) argued that by relying on committed market resources, firm can capture customers’

EJIM attention and willingness to pay extra for the firm’s sustainability performance. In addition, by communicating firm green engagements, firm can attain legitimacy from various Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) environmental concern stakeholders. Thus, committed market resources facilitate to signal a firm’s GPIP efforts, draw customers’ attention, increase customers’ willingness to pay extra for a firm’s green products, strengthen a firm’s reputation, stabilize its relationship with various stakeholders and differentiate green firms, which consequently lead to lower firm risk and improve profitability. Therefore, we hypothesize that: H3a. Firms committed market resource intensity strengthens the positive relationship between GPIP and a firm’s profitability. H3b. Firms committed market resource intensity strengthens the negative relationship between GPIP and a firm’s risk. Environmental factors Scholars have postulated that “successful innovation requires focus on the external environment” (Droge et al., 2008, p. 275), as the external environment can create uncertainty and influence the opportunities that a firm can avail (Tidd, 2001). Firms are therefore required to integrate external environmental conditions into their understanding to produce the desired financial results from GPIP. Accordingly, this research builds on contingency theory which argues that firm performance improvement is a result of the proper alignment of a firm’s endogenous variables (e.g. GPIP efforts) with exogenous variables (for instance, market turbulence) (Lawrence and Lorsch, 1967). Thus, pursuing contingency theory to integrate certain environmental factors is instrumental in understanding the GPIP and s firm’s financial performance relationship. In this regard, we conceptualized environmental factor, i.e. market turbulence and technological turbulence, as a critical impetus to strengthen the GPIP influence on a firm’s financial performance. Moderating role of market turbulence Market turbulence reflects “changes in the composition of customers and their preferences and implies changing strategies in the face of changing customer needs” (Slater and Narver, 1994, p. 51). Based on the vital role of market turbulence, the existing literature has examined its role as a moderator between a firm’s strategy and competitive outcomes (Hung and Chou, 2013; Jaworski and Kohli, 1993). Recently, Chu et al. (2018) examined green innovation and a firm’s profitability relationship with the moderating role of market turbulence and reported that green innovation can magnify a firm’s profitability in a turbulent market environment. Thus, the integral role of market turbulence necessitates further investigation as an independent moderator in the GPIP and a firm’s financial performance relationship. First, we argue that in turbulent markets, there are more opportunities for a firm to incorporate sustainability into their strategic decision making (Cohen, 2006), and a firm can use GPIP as a strategic response to a turbulent market environment. In this context, Amores-Salvadó et al. (2014) argued that GPIP can be the main factor to meet requirements of conscious customers who especially value a product’s environmental performance. As in a highly turbulent market, the customer can react with extreme aggressiveness and can boycott products of a firm engaged in non-sustainable practices. On the other hand, customers appreciate firms that are going green and build their reputation through environmental friendly conduct (Ayuso et al., 2006). Therefore, highly turbulent market environment facilitates firms with GPIP to amplify benefit of their improved reputation, which subsequently leads to a superior financial performance.

Second, we argue that higher GPIP improves product quality, reliability and offers Green unique sustainability attributes that are more effective and persuasive against competing innovation and products (Chen et al., 2006). These unique attributes create a differentiation advantage and signal message to the customer that green firms’ offerings are more valuable than other performance firms (Lankoski, 2008). In the turbulent market environment, the firm can secure best industry performance and reduce uncertainty through differentiation based on environmental friendly offerings (Aragón-Correa and Sharma, 2003), as these green firms are more innovative and have an opportunity to establish a competitive advantage (Russo and Fouts, 1997). Thus, high market turbulence reinforces the green firm differentiation advantage based on GPIP to generate a superior financial performance. In contrast, in cases of low market turbulence, firms have limited opportunities to translate GPIP into FFP because a stable marketplace environment does not require significant changes. Building on the above arguments, we assert that market turbulence is likely to strengthen the GPIP and a firm’s financial performance relationship since it magnifies a firm’s strong green reputation and differentiation advantage. Therefore, it can be hypothesized that: Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) H4a. Higher market turbulence strengthens the positive relationship between GPIP and a firm’s profitability. H4b. Higher market turbulence strengthens the negative relationship between GPIP and a firm’s risk. Moderating role of technological turbulence Technological turbulence reflects “the extent to which technology in an industry was in a state of flux” ( Jaworski and Kohli, 1993). Similar to market turbulence, existing literature has used technological turbulence as a moderator to understand a firm’s strategy and performance relationship (Hung and Chou, 2013). Researchers argue that responding to technological turbulence is essential as non-responding firms can suffer in terms of technological obsolescence (Christensen, 1997). We argue that firms with higher GPIP are more successful in a high technological turbulent environment as it requires firms to equip with sustainable technology which improves production efficiency and effectiveness, product quality and environmental performance. In this regard, Hofmann et al. (2012) documented that firms need to adopt sustainable technology for a greater environmental performance and modernize their facilities. Thus, a firm adopting GPIP could have more state-of-the-art technology and likely to build a capacity for technological breakthroughs, which is more advantageous in a highly technological turbulent environment. Furthermore, firms lacking technological knowledge are likely to miss market opportunities created by a technological turbulent environment because they have limited knowledge to anticipate customers’ new product needs. To emphasize the importance of updated technological knowledge, Hung and Chou (2013) stated that firms require replenishing their current technological knowledge with updated knowledge to remain profitable and to outperform rivals. With GPIP, firms can acquire updated technological knowledge and can anticipate customer’s needs to capture new opportunities brought by a technological turbulent environment. Therefore, we hypothesized that: H5a. Higher technological turbulence strengthens the positive relationship between GPIP and a firm’s profitability. H5b. Higher technological turbulence strengthens the negative relationship between GPIP and a firm’s risk. This research investigates the influence of GPIP on a firm’s financial performance (i.e. firm profitability and firm risk) relationship. It draws on resource-based view and contingency

EJIM theory to explore how GPIP and a firm’s financial performance relationship is manifested when subject to the moderating role of market resource intensity, market turbulence and Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) technological turbulence. Figure 1 shows the conceptual framework. Methodology Thailand as a study site To test the proposed hypotheses in this research, this research collected data from public-listed manufacturing firms in Thailand for several important reasons. First, Thailand is an emerging industrialized economy and its manufacturing sector has grown many folds over the past few decades. Second, since Thai economy heavily relies on manufacturing sector export, Thai government is taking several initiatives to make manufacturing sector greener to ensure the acceptance of its products in other countries, particularly Europe. Third, Thai manufacturing sector also acknowledges the significance of going-green and hence is increasingly engaged in sustainable efforts such as GPIP. Evidently, 17 Thai publicly listed firms make their marks internationally and are included in Dow Jones Sustainability Index 2017, which is highest among Association of South East Asian Nations. In nutshell, both Thai government and industrial sectors efforts to go green make Thailand an important context for this research. Sample and data collection Relying on purposive sampling, this research surveyed publicly listed manufacturing firms across various industries in Thailand. In order to find relevant listed firms, we targeted firms meeting the following criteria: firms that had attained green industry certification, or attained green label products certification; firms that advertised their involvement in environmentally friendly initiatives on their websites; and/or firms that are ISO 14001 certified. Accordingly, 425 firms out of 630 listed firms met the above-mentioned criteria and were considered in this research for the data collection. This research collected data for GPIP, market turbulence and technological turbulence through a questionnaire survey. Questionnaire accompanied with cover letter and stamped return envelopes were sent to 425 targeted firms’ middle- and senior-level managers with knowledge of their firms’ green innovation performance efforts. After follow-up process and gentle reminders, 202 usable responses were received in total, yielding a 47.5 percent final response rate. Questionnaire data were collected during January 2016–April 2016; therefore, following literature, we employed one year ahead firm’s profitability and firm’s risk Market Resource Market Technological Intensity Turbulence Turbulence H5a H5b H4a H4b Firm’s H3a H3b profitability Figure 1. Green Product H1 Firm’s Risk Conceptual framework Innovation H2 Performance Moderating Effect: Direct Effect:

measures data as GPIP may not produce desired results immediately (Leyva-de la Hiz et al., Green 2018). Financial statements data were collected from SETSMART[1] database for innovation and responding 202 firms. This research relied on two different data sources (i.e. questionnaire survey and financial statements) as it could help to avoid common method bias, since in the performance same data source, respondents could present a desirable positive image of their firm (Lichtenthaler, 2009). Although this research collected data for independent and dependent variables from different sources, the use of self-reported data collected through cross-sectional design could have the possibility of common method bias. It is necessary to take into account common method bias problem as it could enlarge the relationship between variables; therefore, this research tested whether common method bias exists between the three constructs, namely, GPIP, market turbulence and technological collected through questionnaire. This research adopted Harman’s single factor test and forced all items of three constructs to load on a single unrotated factor (Podsakoff and Organ, 1986). It extracted only 36 percent of the variance, which explains that single factor does not explain major variance between the Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) variables and this research does not suffer from common method bias. This research accounted for non-response bias and late respondent bias, as suggested by Armstrong and Overton (1977). We compared research constructs and demographic variables for early respondents and late respondents and did not find any significant difference. In addition, we compared responding firm’s characteristics such as annual sale volume with randomly selected non-responding firms and it recommends that non-response bias was not a concern in this research. Table I explains the characteristics of responding firms, where construction and food industry firms are highest in the sample. In terms of the number of years operating, the majority of the firms are in operation between 20 and 40 years, while only 10 firms are operating more than 60 years, and the majority of the firms have annual sales more than 1,000m Thai Baht. Industry Frequency % Table I. Packaging Characteristics of Industrial 10 4.95 Electronics 5 2.48 responding firm Automotive 17 8.42 Consumer products/fashion 15 7.43 Electricity/energy 21 10.40 Construction 27 13.37 Food 40 19.80 Chemical 35 17.33 Steel 12 5.94 20 9.90 Number of years operating Less than 20 25 12.38 20–40 120 59.41 40–60 47 23.27 More than 60 10 4.95 Annual sales volume 32 15.84 Less than 1,000m Thai Baht 63 31.19 1,000–5,000m Thai Baht 60 29.70 5,000–20,000m Thai Baht 47 23.27 More than 20,000m Thai Baht Note: n ¼ 202

EJIM Measurement of constructs This research adopts measurement scales from the previously validated research, as Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) shown in Table AI. Changes in the measurement scales were made to suit the Thai context. In addition, we translated questionnaire from English to Thai with the help of two bilingual Thai experts and ensured abstract similarity by applying the reverse-translation procedure (Cai et al., 2010). Since wordings of the measurement scales were modified to fit the purpose of this research, a pilot test was performed to confirm the relevancy and reliability of the scales. We establish questionnaire wording clarity and adequacy with the help of five scholars and practitioners and appropriate changes were made to improve the relevancy of our survey instrument. The refined questionnaire was pilot tested on 30 relevant senior-level managers of green firms and was found satisfactory. All respondents to the research answered questions using a Likert scale, from 1 (strongly disagree) to 7 (strongly agree). Dependent variables Dependent variables used in this research are firm’s profitability and firm’s risk. For a firm’s profitability, we relied on accounting-based measures, namely ROA and ROE, as they tend to demonstrate the stronger relationship between GPIP and a firm’s profitability (Hart and Ahuja, 1996; Albertini, 2013). Moreover, these are preferable measures as they reflect firm internal capabilities and management performance (Hart and Ahuja, 1996; Albertini, 2013). In order to be consistent with the literature, this research employed two measures of firm’s risk as the standard deviation of ROA (SDROA) and long-term debt scaled by equity (Miller and Bromiley, 1990; Habib and Hasan, 2017), where SDROA is the standard deviation of net income scaled by total assets over the last three years (Miller and Bromiley, 1990). We used SDROA as it shows variance in the firm’s earning and is most relevant to management of the firm (Fiegenbaum and Thomas, 1988), and a higher SDROA shows higher variance in earnings and it could be due to a firm’s non-sustainable behavior. Moreover, long-term debt scaled by equity captures a firm’s changing financial leverage strategies, and it is relevant for managers and different concern stakeholders (Miller and Bromiley, 1990). Independent variables and moderators In line with the established literature, GPIP was measured using four items taken from a scale used by Chen et al. (2006), e.g. “Your company chooses materials for products that produce the least amount of pollution in conducting product development or design or packaging.” Cronbach’s α coefficients for components of the GPIP construct reached 0.92. This research measured market resources intensity as selling, general and administrative expenses (SG&A) scaled by total assets (Lee and Chen, 2009). We adopted technological turbulence measure from Jaworski and Kohli (1993) and market turbulence from Luca and Atuahene-Gima (2007). All scales were internally consistent and reliable (technological turbulence, α ¼ 0.96 and market turbulence, α ¼ 0.94). Control variables Following literature recommendations, this research included several control variables as they can influence the implementation of GPIP. Since firms in our sample are from different industries, we included three industrial dummy variables as manufacturing, electricity and construction, as per Thailand Standard Industrial Classification: TSIC- 2009, using two-digit coding. Thus, manufacturing dummy consists of: packaging, industrial material, electronics, automotive, consumer products, food, chemical, steel; electricity dummy: energy industry; and construction dummy: construction industry,

where manufacturing is used as a baseline dummy. This research measured the firm size Green by taking the natural logarithm of the net annual sales. Moreover, we accounted for the innovation and firm’s age and calculated it as the number of years from the firm’s establishment. performance Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) Analysis strategy Given the nature of the hypotheses to test the incremental contribution of the moderators in terms of variance in R2, this research has used hierarchical multiple regression analyses. The hierarchical multiple regression analysis allows to evaluate the incremental contribution of predictors after controlling other variables, and such incremental contribution is assessed through the incremental variance in R2 of the model (Pedhazur, 1997). Furthermore, hierarchical multiple regression is suitable to assess the moderators’ incremental contributions in the analyses that are above and beyond the previously entered variables (Lewis, 2007). In addition, this statistical technique is advantageous, as it allows the researchers to determine the order of the predictor’s entry into the analysis based on the theory and literature (Lewis, 2007). Moreover, to test the moderation effect, the use of hierarchical regression is well documented across contemporary business and management literature (Byun et al., 2018; Shao, 2018; Hernandez-Espallardo et al., 2012; Bysted, 2013; Herdman et al., 2017; Woods et al., 2018). We used SPSS 21.0 software to test hypotheses of this research and AMOS 21.0 to perform confirmatory factor analysis (CFA). Empirical results After data collection, first, this research assessed explanatory factor analysis to check construct validity of all the measures. We did not find any construct validity issues, and each item loaded on the relevant factor. Second, to ensure dimensionality, reliability and validity of the scales, we conducted CFA. This research also conducted composite reliability (CR) and average variance extracted (AVE). CR and the AVE for all constructs exceeded 0.7 and 0.5, respectively, confirming adequate convergent validity and reliability. Table II provides all values for the standardized loadings from CFA, Cronbach’s α, CR and AVE, which suggest sufficient convergent validity. Moreover, the overall measurement model in CFA demonstrates a good fit to the data (CMIN ¼ 277.910, df ¼ 129, CFI ¼ 0.958, IFI ¼ 0.958 and RMSEA ¼ 0.076), showing undimensionality of the constructs. Factor loading: it comes from Confirmatory factor analysis CFA (measure The items reflect the construct). EFA (exploratory Factor Analysis… to measure items when we develop our own items) Construct Label Loadings Cronbach’s α CR AVE Green product innovation performance GPIP1 0.87 0.92 0.92 0.74 GPIP2 0.84 GPIP3 0.86 GPIP4 0.88 Market turbulence MT1 0.85 0.94 0.94 0.79 MT2 0.88 MT3 0.92 MT4 0.91 Technological turbulence TT1 0.89 0.96 0.96 0.84 TT2 0.9 TT3 0.94 TT4 0.93 Table II. TT5 0.91 Convergent validity Notes: CR, composite reliability; AVE, average variance extracted analyses This is to check the internal reliability and validaty of constructs (not related to results). Cronbach: It looks at the items to measure a construct and how internal consistent the items/measure. Alfa should > 0.7

EJIM Descriptive statistics and correlations Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) Table III summarizes descriptive statistics and correlations of all variables. As Table III shows, correlation provides some preliminary support for H1 and H2, as GPIP has a significant correlation with the firm’s financial performance indicators (e.g. GPIP and ROA t+1 correlation, r ¼ 0.34, p o0.001). This research did not find multicollinearity issue as VIF value of all variables ranged between 1.026 and 1.235. In addition, to avoid multicollinearity issue, this research mean centered the variables before creating the interaction terms, as multicollinearity issue could be a serious problem in regression models (Aiken et al., 1991). Hypotheses testing To investigate proposed hypotheses, this research ran hierarchical moderated regression analysis and employed firm’s profitability and firm’s risk measures as the dependent variables for each regression model. First, we introduced control variables, then we included main effect variable, i.e. GPIP along with market resource intensity, market turbulence and technological turbulence, and, finally, we entered interaction terms in the third step. Table IV shows the results for the twelve models, separated according to the firm’s financial performance measures: firm’s profitability; ROA t+1 (model 1–3), ROE t+1 (model 4–6) and firm’s risk; SDROA t+1 (model 7–9) and D/E t+1 (model 10–12). Main effects of GPIP on firm’s profitability are displayed in model 2 for ROA t+1 ( β ¼ 1.864, p o0.01) and model 5 for ROE t+1 ( β ¼ 2.092, p o0.01), which are positively significant and support H1. Similarly, GPIP influence on firm’s risk is investigated in model 8, SDROA t+1 ( β ¼ −0.740, p o0.01) and model 11 for D/E t+1 ( β ¼ −0.259, po 0.01) which are negatively significant. These results indicate that higher GPIP enhances the firm’s profitability and lowers risk. To test H3a, H3b, H4a, H4b, H5a and H5b about market resource intensity, market turbulence and technological turbulence moderating role in the relationship between GPIP and a firm’s financial performance, this research added their interactions in models 3, 6, 9 and 12. Interaction terms in all models add the significant additional power, such as model 3: ΔR2 ¼ 0.145, po 0.001, model 6: ΔR2 ¼ 0.100, p o 0.001, model 9: ΔR2 ¼ 0.123, p o 0.001 and model 12: ΔR2 ¼ 0.168, p o0.001, which demonstrates the significant influence of interactions moderating role. The β coefficient for GPIP and market resource intensity moderating role is positively significant for the firm’s profitability (i.e. ROA t+1 (model 3: β ¼ 1.270, p o0.01) and ROE t+1 (model 6: β ¼ 2.019, p o0.01)) and negatively significant for the firm’s risk (i.e. SDROA t+1 (model 9: β ¼ −0.387, p o0.05) and D/E t+1 (model 12: β ¼ −0.133, p o0.05)); thus, it supports H3a and H3b. Moreover, β coefficient for GPIP and market turbulence moderating role is also positively significant for the firm’s profitability (i.e. ROA t+1 (model 3: β ¼ 0.924, p o0.10) and ROE t+1 (model 6: β ¼ 1.353, p o0.10)) and negatively significant for the firm’s risk (i.e. SDROA t+1 (model 9: β ¼ −0.534, p o0.01) and D/E t+1 (model 12: β ¼ −0.208, p o0.01)); therefore, it establishes support for H4a and H4b. Finally, technological turbulence interactive role supports H5a and H5b as it has a significant and positive influence on the firm’s profitability (i.e. ROA t+1 (model 3: β ¼ 2.181, p o0.05) and ROE t+1 (model 6: β ¼ 1.468, p o0.05)) and a negative significant influence on the firm’s risk (i.e. SDROA t+1 (model 9: β ¼ −0.690, p o0.01) and D/E t+1 (model 12: β ¼ −0.359, p o0.01)). Specifically, market resource intensity more strongly moderates GPIP and a firm’s profitability relationship, and market turbulence and technological turbulence are more influential to reinforce GPIP and a firm’s risk relationship. Overall, the research results support the proposed hypotheses. The findings have demonstrated that a higher GPIP enhances a firm’s profitability and reduces risk, and this supports H1 and H2. Market resource intensity strongly moderates GPIP and a firm’s financial performance relationship, which implies that committed market resources enhance a firm’s ability to translate GPIP into improved financial performance; thus, it is in line with H3a and H3b. In addition, this research has found that market and

Downloaded by 110.77.182.7 A Mean SD 1 2 34 5 1. Manufacturing 0.66 0.47 1 1 1 1 1 2. Electricity 0.14 0.35 −0.20*** 0.12* −0.06 3. Construction 0.20 0.40 −0.56*** −0.12* 0.06 0.35 4. Age 34.93 14.46 −0.70*** 0.12* 0.05 5. Ln Size 3.68 1.13 −0.01 0.20*** 0.07 0.13* −0.14 6. GPIP 5.02 1.08 −0.20*** 0.02 0.08 −0.10 7. MRI 0.13 0.12 −0.19*** 0.11 −0.05 0.10 −0.03 8. MT 4.68 1.23 −0.002 0.02 9. TT 4.84 1.19 0.10 −0.22*** 0.01 0.04 0.32 10. ROA t+1 6.11 7.67 −0.14** −0.11 −0.10 11. ROE t+1 7.18 10.35 0.09 −0.04 0.18** −0.07 0.35 12. SDROA t+1 3.38 2.99 −0.25 13. D/E t+1 1.24 1.13 0.07 0.13** −0.23 −0.09 0.17** −0.13* −0.12* 0.18*** 0.01 −0.16** Notes: GPIP, green product innovation performance; MRI, market resource intensi ***p o 0.01 Table III. Descriptive statistics and correlations

At 18:46 03 January 2019 (PT) 6 7 8 9 10 11 12 5*** 1 1 1 1 1 1 1 4** −0.10 0.22*** 0.07 −0.06 0.88*** 0.35*** 0 0.18*** 0.12* −0.06 −0.33*** −0.31*** 3 0.08 −0.04 0.12* −0.54*** −0.49*** 2*** 0.12* −0.10 −0.07 0.13* 5*** 0.34*** 0.07 −0.18** turbulence. 5*** 0.32*** 0.10 0.04 3*** −0.33*** −0.28*** turbulence; ity; MT, market TT, technological *p o 0.1; **p o 0.05; Green innovation and performance

Downloaded by 110.77.182.7 A Table IV. Results of hierarchical moderated regression analysis Electricity Model 1 ROA t+1 Model 3 1.577 (1.01) Model 2 0.743 (0.52) Construction −0.257 (−0.19) 1.401 (0.91) −2.130 (−1.17)* 0.027 (0.74) −0.922 (−0.71) 0.003 (0.11) Age 2.072 (4.41)*** 0.019 (0.55) 1.268 (2.85)*** 1.528 (3.17)*** 1.653 (3.59)*** Ln Size 0.107 1.864 (3.71)*** −0.604 (−0.15) 0.107 −0.356 (−0.80) 0.761 (1.95)** GPIP 5.873*** 0.834 (1.99)** −0.628 (−1.58) −0.643 (−1.49) 1.270 (2.76)*** MRI 0.924 (1.85)* 0.193 2.181 (4.43)*** MT 0.086 5.753*** 0.338 TT SDROA t+1 0.145 GPIP × MRI 8.803*** GPIP × MT GPIP × TT R2 ΔR2 F Electricity Model 7 Model 8 Model 9 −0.953 (−1.55) −0.761 (−1.26) Construction −0.784 (−1.49) −0.491 (−0.96) −0.485 (−0.85) −0.023 (−1.60) −0.022 (−1.6) −0.057 (−0.12) Age −0.601 (−3.25)*** −0.366 (−1.93)* −0.015 (−1.18) −0.740 (−3.74) *** −0.252 (−1.41) Ln Size 0.091 −0.673 (−3.63)*** 0.091 0.834 (0.48) GPIP 4.987*** −0.198 (−1.20) 1.167 (0.707) MRI 0.402 (2.38)** −0.146 (−0.93) 0.372 (2.34)** MT 0.178 0.087 −0.387 (−2.10)** TT 5.242*** −0.534 (−2.66)*** GPIP × MRI −0.690 (−3.50)*** GPIP × MT GPIP × TT 0.301 R2 Δ R2 0.123 F 7.432*** Notes: GPIP, green product innovation performance; market resource intensity; MT, m ΔR2 means the increase in R2 from the model to the previous model. *p o 0.1; **p o 0

At 18:46 03 January 2019 (PT) EJIM Model 4 ROE t+1 Model 6 3.217 (1.55) Model 5 2.63 (1.33) −0.009 (−0.01) 3.036 (1.47) −1.88 (−1.11) 0.050 (1.043) −0.740 (−0.43) 0.021 (0.47) 2.999 (4.800)*** 0.042 (0.88) 2.084 (3.38)*** 2.391 (3.70)*** 1.822 (2.86)*** 0.133 2.092 (3.11)*** −2.455 (−0.43) 0.133 −2.187 (−0.37) 1.000 (1.85)* 7.566*** 1.242 (2.23)** −0.653 (−1.19) −0.775 (−1.35) 2.019 (3.18)*** 1.353 (1.96)* 0.204 1.468 (2.16)** 0.071 6.168*** 0.304 D/E t+1 0.1 7.561*** Model 10 Model 11 Model 12 0.304 (1.32) 0.369 (1.65) 0.508 (2.50)** 0.635 (3.24)*** 0.712 (3.78)*** 0.915 (5.35)*** −0.008 (−1.42) −0.007 (−1.35) −0.004 (−0.89) −0.264 (−3.82)*** −0.181 (−2.58)*** −0.133 (−2.09)** * −0.259 (−3.54)*** −0.232 (−3.53)*** 1.141 (1.76)* 1.281 (2.19)** −0.171 (−2.81)*** −0.159 (−2.86)*** 0.072 (1.15) 0.066 (1.17) −0.133 (−2.04)** * −0.208 (−2.91)*** * −0.359 (−5.13)*** 0.107 0.21 0.378 0.107 0.103 0.168 5.896*** 6.416*** 10.492*** market turbulence; TT, technological turbulence. t-values are given in parentheses. 0.05; ***p o 0.01

technological turbulences strongly moderate the GPIP and a firm’s financial performance Green relationship. Our research provides strong support for the proposed H4a, H4b, H5a and innovation and H5b, whereby turbulence in terms of the customers changing their preferences combined with technological changes can provide an effective means for a firm to improve its performance financial performance. Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) Discussion and implications GPIP has been recognized as an effective mechanism to mitigate any negative influence on the environment and remain competitive in business at the same time. This research analyzed the influence of GPIP on a firm’s financial performance in terms of both firm’s profitability and risk. In addition, it relies on the resource-based view and contingency theory to explore how a firm’s market resource intensity and certain environmental factors, such as technological turbulence and market turbulence, moderate the GPIP and a firm’s financial performance relationship. First, the research findings demonstrate that GPIP is conducive to influence favorably a firm’s financial performance. Although GPIP effort involves an extra cost, the monetary investment is worthwhile, GPIP, if managed well, can offset such investment cost through improve profitability. This research also documents that a higher GPIP level reduces a firm’s additional financial risk due to government penalties, the customers’ and other stakeholders’ boycotts against a firm and its products and any vulnerability accessing capital from financial institutions due to poor environmental performance. These findings are consistent with green innovation literature that has investigated GPIP and a firm’s financial performance relationship (Chen et al., 2006; Amores-Salvadó et al., 2014; Lin et al., 2013). Thus, GPIP helps firms improve their product differentiation and establish their environmentally friendly reputation through the reduction of valuable input resources, mitigation of harmful substance emissions and being a good citizen within society. Thus, pursuing GPIP can provide both environmental benefits and a superior financial performance. Second, market resource intensity moderating influence on GPIP and a firm’s financial performance relationship is found significant. This supports the resource-based view, and is in accordance with earlier research by Wagner (2010), who demonstrated that committed market resource intensity can proliferate a firm’s sustainability performance influence on its financial performance. Particularly, market resource intensity more strongly influences the GPIP effect relative to a firm’s profitability compared to the risk. A possible explanation could be that committed market resources play a crucial role to promote and market a firm’s GPIP effort to the customers and other stakeholders, and this results in increased revenue and better profitability. In fact, it symbolizes that a higher GPIP effort coupled with committed market resources does create an impression that a firm’s GPIP effort is well communicated and received by the market. Third, by using the framework based on the contingency theory, this research has found that the independent roles of both technological turbulence and market turbulence have significantly moderated the GPIP and a firm’s financial performance relationship. Market and technological turbulences more strongly influence GPIP and a firm’s financial risk relationship compared to GPIP and a firm’s profitability relationship. A possible explanation is that firms’ applying GPIP can differentiate themselves from their competitors and meet the challenges of varying customers’ preferences, while responding effectively to the changing environmental and key critical stakeholders’ demands to reduce risk. Such firms also take the advantage of green technology and new knowledge resources to address the stakeholders’ various concerns, resulting in reduced risk. Thus, firms implementing GPIP prosper within turbulent technological and market environmental settings. These findings lend more support to the earlier claims that a turbulent environment facilitates the

EJIM firm’s environmental management and competitive advantage relationship (Aragón-Correa and Sharma, 2003), and this is in line with the contingent theory-based claims by several Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) scholars (e.g. Atuahene-Gima et al., 2005) that influence firms’ strategic choices regarding performance outcomes that are contingent on the relevant environmental factors. The findings of this research supplement the extant body of literature with several theoretical and practical implications. This research has sought to advance existing evidence and debate that echo the GPIP and a firm’s financial performance link, which indicates that besides reducing any harmful environmental effect, a higher GPIP improves a firm’s profitability and reduces risk. This research does not limit a firm’s financial performance in terms of profitability, as it has also provided fine-grained evidence pertaining to the relationship between GPIP and a firm’s risk; thus, it has provided additional evidence pertaining to the ongoing debate of “Does it pay to be green?” In addition, this research has relied on the resource-based view that suggests a firm equipped with committed market resources can substantially promote its GPIP effort. Due to committed market resources, firms with a higher GPIP can achieve and enhance environmentally friendly reputation and differentiation advantage. Thus, this research contributed by analyzing the moderating role of market resource intensity on GPIP and a firm’s financial performance relationship; particularly, it contributes novice evidence in terms of a market resources intensity moderating role in GPIP and a firm’s financial risk relationship. Finally, this research has recognized the configurational environmental factors that strengthen the influence of GPIP on a firm’s financial performance. Using the framework based on the contingency theory, this research has provided results that demonstrate the independent role of technological turbulence and market turbulence that positively moderate the GPIP and a firm’s financial performance relationship. Furthermore, a firm’s adoption of an effective GPIP policy helps it prosper within a turbulent technological and market environment setting. This research provides vital managerial implications for practitioners seeking to gain competitive advantage through GPIP. Since GPIP favorably influences a firm’s financial performance, the management should recognize that investment in GPIP is an avenue to develop new market opportunities, increase sales, stabilize its relationship with critical stakeholders and gain a financial advantage, without an additional cost or extra burden on the firm (Li, 2014). The results indicate that GPIP tends to improve financial performance and is beneficial for the stockholders and other stakeholders in their interpretation to achieve better performance through GPIP. Moreover, our research results have implications for business managers in understanding that a firm’s internal resources, particularly market resource intensity, are both pivotal and an effective means to amplify the positive effect of the GPIP effort. Thus, business managers need to recognize the role in order to signal to the market about GPIP’s beneficial effects and generate a higher economic performance. Finally, the research results suggest that business managers should adjust GPIP to the changing market and technological conditions to achieve attain a better financial performance. Firms that fail to consider the effective role of the market and technological turbulence may not generate the results desired by implementing GPIP. “Only if internal competencies and external opportunities are matched is success likely” (Simon, 1996, p. 136). This research has recommended that the GPIP effort should not be decoupled from any environmental factors, since taking advantage of the market and technological turbulences is managerially relevant and a noticeable concern, and green firms must promote GPIP to generate the desired financial results. Limitations and future research This research’s findings are subject to some limitations. First, this research uses a sample of publicly listed manufacturing firms in Thailand, but did not incorporate the service sector.

However, since the importance of the service sector’s contribution to the overall economy is Green pivotal and highly acknowledged, future studies are highly encouraged to incorporate the innovation and service sector in empirical settings to gather more generalizable findings. Furthermore, a probable future research prospect could be to compare the level GPIP effort across listed vs performance non-listed firms, in order to understand which firms contribute more to environmentally friendly initiatives and subsequently reap greater financial advantages. Second, this research collected data from ten industries. Each sector has its unique characteristics, and a collective investigation of various sectors of the industry could mask industry-specific issues (Griffin and Mahon, 1997). For better managerial implications, future studies should specifically focus on a particular industry. Third, this research considered the moderating role of market resource intensity, market turbulence and technological turbulence regarding the GPIP and a firm’s financial performance relationship. There are many other internal and external factors affecting firms, such as the organizational culture, which are likely to moderate the influence of GPIP on a firm’s financial performance. Thus, it is suggested to incorporate the firm’s other Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) internal and external factors in future research settings. Finally, this research’s findings are limited to publicly listed manufacturing firms in Thailand. This country is aware of the environmental challenges and is implementing a number of green initiatives to ensure sustainable progress. However, it may not be representative of other countries that may be subject to different regulations, organizational structures or economic challenges. Therefore, it may be beneficial to replicate the framework of this research within other settings to measure the generalizability of the results and add more empirical evidence to verify the major findings of this study. Conclusions This research has addressed several overarching research questions related to GPIP, and how firms can reap higher financial benefits accordingly. First, previous literature explored GPIP’s influence on a firm’s financial performance with a specific focus on profitability. This research advances GPIP research by considering the influence of GPIP on both facets of a firm’s financial performance, i.e. the firm’s profitability and risk. This research’s findings demonstrate that the successful implementation of GPIP can favorably influence a firm’s financial performance in terms of both higher profitability and lower financial risk. Although GPIP effort requires additional investment, this can be offset through improved profitability and reduced financial risk. Consequently, by considering a firm’s profitability and risk, this research’s findings contribute by adding additional clarity to the ongoing debate of “Does it pay to be green?” Second, this research relies on resource-based view as its theoretical perspective to understand the moderating role of committed market resources on GPIP and a firm’s financial performance relationship. In line with this hypothesis, the research findings reveal that market resource intensity significantly moderates the relationship between GPIP and firm’s financial performance. Therefore, this research has revealed that firms need committed market resources to capture new markets through the GPIP differentiation advantage, and thus enhance the firm’s financial performance. Third, this research has relied on the contingency theory to elaborate and test the independent moderating role of market turbulence and technological turbulence. The findings support the claim that the influence of a firm’s strategic choices on performance outcomes is contingent on the market and technological turbulence. Thus, this research’s findings highlight the importance of market and technological turbulence to achieve a superior financial advantage through GPIP efforts. By considering the independent moderating role of market resource intensity, market turbulence and technological turbulence, this research contributes to reconcile the previously disparate

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EJIM Appendix Table AI. Scale Labels Items Source Items in scale Green product GPIP 1 Our company chooses the materials of the product that Chen et al. (2006) innovation produce the least amount of pollution for conducting the performance product development or design or packaging GPIP 2 Our company chooses the materials of the product that consume the least amount of energy and resources for conducting the product development or design or packaging GPIP 3 Our company uses the fewest amounts of materials to comprise the product for conducting the product development or design or packaging GPIP 4 Our company produces the product that is easy to recycle, reuse, and decompose for conducting the product Downloaded by 110.77.182.7 At 18:46 03 January 2019 (PT) development or design or packaging Market MT1 Customer needs and product preferences changed quite Luca and Atuahene- turbulence rapidly in our industry Gima (2007) MT2 Customer product demands and preferences were highly uncertain in our industry MT3 It is difficult to predict changes in customer needs and preferences in our industry MT4 Market competitive conditions were highly unpredictable in our industry Technological TT1 Technology in our industry is changing rapidly Jaworski and Kohli turbulence (1993) TT2 Technological changes provide big opportunities in our industry TT3 It is very difficult to forecast technology developments in our industry TT4 A large number of new product ideas have been made possible through technological breakthroughs in our industry TT5 Technologically, our industry has a very complex environment Corresponding author Adeel Tariq can be contacted at: [email protected] For instructions on how to order reprints of this article, please visit our website: www.emeraldgrouppublishing.com/licensing/reprints.htm Or contact us for further details: [email protected]