Exploring Environmental Regulation Instruments and Their Impact on Eco-Innovation Practices Among SMEs: The Mediating Role of Environmental Orientation

Khalid Mady, Mohamed Battour (), Sabri Shaker Ashoor Bin-Obaidellah, Maha Khamis Al Balushi () and Rowan Elodie Kennedy ()
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Khalid Mady: College of Business Administration, A’Sharqiyah University, Ibra, Oman, Faculty of Commerce, Kafrelsheikh University, Kafr el-Sheikh, Egypt
Mohamed Battour: College of Business Administration, A’Sharqiyah University, Ibra, Oman, Faculty of Commerce, Tanta University, Tanta, Egypt
Sabri Shaker Ashoor Bin-Obaidellah: Faculty of Administrative Sciences, Seiyun University, Seiyun, Yemen5Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu, Kuala Terengganu, Malaysia
Maha Khamis Al Balushi: Department of Marketing, College of Economics and Political Science, Sultan Qaboos University, Muscat, Oman
Rowan Elodie Kennedy: Department of Marketing, College of Economics and Political Science, Sultan Qaboos University, Muscat, Oman

Journal of Environmental Assessment Policy and Management (JEAPM), 2024, vol. 26, issue 03, 1-32

Abstract: Despite a vast body of eco-innovation literature investigating the assumption that environmental regulations encourage the implementation of eco-innovative practices, previous research on eco-innovation and environmental regulations has yielded inconsistent findings. By considering the heterogeneity of environmental regulation and eco-innovations, this study sheds light on how different environmental regulation instruments can facilitate and enhance eco-innovation practices, along with the role of environmental orientation in mediating the relationships. The study surveyed 188 managers and owners and utilised the partial least squares-structural equation model as the analytical method. Results showed that environmental regulatory mechanisms have no direct impact on eco-innovation. However, the study has found that environmentally oriented SMEs respond to strict environmental policies and regulations by undertaking eco-innovation practices. Furthermore, market-based instruments provide firms with strong environmental orientation and economic incentives to foster eco-process innovations. The study offers practical insights for policymakers and SME managers, in addition to advancing the knowledge base.

Keywords: Eco-innovation; environmental regulation; environmental orientation; command-and-control instrument; market-based instrument (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S1464333224500108

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