The mediating role of green technology practices in enhancing firm performance

Abstract

The manufacturing business activities, operations and decisions are highly influenced by the current trend on green technology practices, which emerged from the sustainability concept. In the interest of enhancing sustainability development, the need to adopt green technology practices (GTP) is crucial for firms to considered. Prominent scholars in the sustainability studies had found a positive relationship between sustainability practices and firm performance. The aims of this paper is to analyse GTP's effects toward firm performance and the mediation effects of GTP through green technology drivers. Data were collected from 280 Malaysian manufacturing firms to empirically examine the relationships that existed among green technology drivers, GTP and firm performance. Utilizing the SEM-AMOS procedures, the study revealed that two green technology drivers (resource availability and market dynamics) have positive effect on GTP and it fully mediated the link between GTP and performance. Thus, the empirical results confirmed the effects of green technology drivers and GTP in enhancing firm performance. Hence, this research urged that firms should strengthen the practices related to green initiatives internally rather than focusing on external environment to improve firm performance. Furthermore, firms should clearly define the types of GTP that fit to their long term strategic goal with concurrent enhancement to the firm's green sustainable competitive advantage.