Why diverse boards are market game-changers: driving the sustainable future from the lens of proactive eco-innovation for firm market performance

Md. Abu Toha (), Satirenjit Kaur Johl (), Parvez Alam Khan () and Mohd Salim ()
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Md. Abu Toha: National University
Satirenjit Kaur Johl: Universiti Teknologi PETRONAS
Parvez Alam Khan: Universiti Teknologi PETRONAS
Mohd Salim: Aligarh Muslim University

Quality & Quantity: International Journal of Methodology, 2025, vol. 59, issue 2, No 21, 1253-1282

Abstract: Abstract Reactive Eco-innovation (REI) has gained considerable attention due to its potential to mitigate sustainability issues. However, post-COVID, there is a need to unlearn reactive behavior and relearn proactive behavior in innovative activities. Proactive eco-innovation (PEI) is hope or hype for the firm is yet to be explored. The prime objective of this study is to examine the impact of proactive eco-innovation on firm market performance (FMP). This research also investigated the moderation role of independent directors (ID) and women's diversity in provocative eco-innovation. This study bridges the gap by developing a proactive eco-innovation index for the energy sector to outperform the five (5) years of panel data of 31 listed firms at Bursa Malaysia. The findings showed that proactive eco-innovation has a direct relationship with FMP. The findings also found that independent directors moderate the relationship between proactive eco-innovation and FMP. In contrast, women's diversity has no moderating effect on the relationship above. The findings suggest corporations and policymakers should adopt proactiveness in eco-innovation practices due to their cost advantage and pollution-prevention potential.

Keywords: Eco-Innovation; Proactive eco-innovation; Board of directors (BOD); Firm financial progression; Market performance (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11135-025-02059-0

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