Environmental Sustainability as a Source of Product Innovation: The Role of Governance Mechanisms in Manufacturing Firms

Myung Kyo Kim, Chwen Sheu and Jiho Yoon
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Myung Kyo Kim: Department of Management, College of Business Administration, Kansas State University, Manhattan, KS 66506, USA
Chwen Sheu: Department of Management, College of Business Administration, Kansas State University, Manhattan, KS 66506, USA
Jiho Yoon: Department of Management, College of Business Administration, Kansas State University, Manhattan, KS 66506, USA

Sustainability, 2018, vol. 10, issue 7, 1-14

Abstract: Over the past two decades, since the emergence of the triple bottom line philosophy, the relationship between environmental sustainability and corporate performance has received a lot of attention, but has generated mixed or often even contradictory results. A few recent studies have inferred that innovations are the missing link that connects the environmental sustainability of a firm to other performance metrics; however, the evidence of such a proposition has been restricted to being conceptual or anecdotal. Relying on a knowledge governance approach, this study presents exploratory empirical evidence indicating that the impacts of a firm’s sustainability initiatives on its innovation performance originate from the governance mechanism it uses for sustainability, not sustainability outcomes per se. We tested this research proposition by using a subsample of Global Manufacturing Research Group’s global survey data. Our results support the positive impacts of two widely-used environmental sustainability governance mechanisms (i.e., internal monitoring and supplier collaboration) on product innovation capability. The findings further provide more useful and effective options for manufacturing firms and managers, to establish environmental sustainability governance mechanisms that can be converted into product innovation capability.

Keywords: environmental sustainability; governance mechanism; internal monitoring; supplier collaboration; product innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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