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Environmental Science and Pollution Research
https://doi.org/10.1007/s11356-023-29583-6
RESEARCH ARTICLE
Why green absorptive capacity andmanagerial environmental
concerns matter forcorporate environmental entrepreneurship?
LahceneMakhlou1 · JingZhou2· AbuBakkarSiddik3
Received: 31 May 2023 / Accepted: 25 August 2023
© The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature 2023
Abstract
Balancing environmental sustainability and green business growth is one of the primary goals of corporate environmental
entrepreneurship, while green entrepreneurship orientation (GEO) represents balanced approaches to maximize green busi-
ness value-added and maintain environmental performance (EP). Green innovation (GI) strengthens green business effi-
ciencies and drives GEO achievements. Building on the natural resource-based view (NRBV) and dynamic capability view
(DCV), this research addressed the critical role of GEO and GI on EP. In addition, the effect of green absorptive capacity
(GAC) and managerial environmental concern (MEC) on EP is estimated. The results indicated that GEO significantly affects
MEC and GI. While GI positively influences MEC, the relationship between GI and GAC was insignificant. Additionally,
GAC and MEC positively and greatly influenced EP. As GAC partially mediates the effect of GEO and GI on EP, MEC also
partly mediates the relationship between GI and EP. In the context of the environment, this study presents three quantita-
tive achievements, namely (1) it confirms the vital role of green dynamic capabilities such as GAC to balance GEO’s green
business agenda and maintain environmental performance, (2) GAC converts knowledge creation to knowledge applications
focusing on the development of eco-friendly products and processes to reduce environmental pollution, and (3) MEC deter-
mine and focus on GI core competencies to support GEO strategies, (4) GAC level up firms green dynamic capabilities to
the level of GEO, and thus maintaining ecosystem and eco-business sustainability. In light of the study outcomes, theoretical
and managerial implications were highlighted.
Keywords Green entrepreneurship orientation· Green innovation· Environmental performance· Green absorptive
capacity· The natural resource-based view· Dynamic capability theory
Introduction
The natural resource-based view (NRBV) believes that cor-
porations should track and capture green business opportu-
nities to sustain competitive advantages and level up eco-
system sustainability (Bresciani etal. 2023; Shafique etal.
2021). Environmental business opportunities fundamentally
aim to capture eco-friendly opportunities to tackle increasing
environmental degradation (Rehman etal. 2022). This study
identifies GEO as a dynamic pro-environmental behavior
that emphasizes ecological responsibilities. It responds and
is based on three central pillars, namely (1) pollution issues,
(2) environmental products, and (3) sustainable development
(Rehman etal. 2021a).
By extending the NRBV perspective, this research
regarded GEO as green dynamic capabilities and a pro-
active green strategy that enhances the capacities of an
organization to track green opportunities and sustain
Responsible Editor: Arshian Sharif
* Jing Zhou
282423738@qq.com
Lahcene Makhloufi
lahcene.mak@mfu.ac.th
Abu Bakkar Siddik
ls190309@sust.edu.cn
1 School ofManagement, Mae Fah Luang University, 333
Moo 1 Tasood, Muang, ChiangRai57100, Thailand
2 Guizhou Communications Polytechnic,
GuiyangCity551400, GuizhouProvince, China
3 School ofEconomics andManagement, Shaanxi University
ofScience andTechnology, Xi’an710021, Shaanxi, China
Environmental Science and Pollution Research
1 3
environmental performance (EP). This can be achieved
by (1) leveraging eco-practices to increase the quality of
environmental activities, (2) using clean technologies to
foster eco-friendly business activities, (3) deploying green
knowledge, and (4) applying green organizational knowl-
edge to improve employee’s green behavior, which in turn
leads to firms’ environmental performance.
The study seeks to advance green entrepreneurship
and eco-innovation as the leading green business solu-
tions aiming to reduce environmental impacts (Makhloufi
etal. 2021d) and climate change (Potluri and Phani 2022)
through the greening and reengineering industry (Xin
etal. 2022). This, in turn, leads to enhanced resource
efficiencies on the one hand and decreased use of natural
resources on the other hand. This implies that ecosystem
degradation and climate change must be a management’s
top priority. In addition, the core focus is to achieve the
three major green strategies GEO covers and match the
NRBV approach. Given the crucial issues raised by the
NRBV (Makhloufi etal. 2021c; Mishra and Yadav 2021)
and the government’s green policy, GEO is the new prom-
ising approach to applying and allocating green solutions
to reduce natural resource use, increase business growth,
and maintain ecosystem performance (Soomro etal. 2023).
Indeed, GEO’s primary objective is to enhance ecological
and economic sustainability (Makhloufi etal. 2020). Thus,
GEO is aware of the importance of green technologies,
engineering, chemistry and practices (Tang etal. 2018).
By doing so, it led to improving waste hazardous, reduc-
ing CO2 emissions, increasing resource efficiencies, deliv-
ering eco-friendly products, restructuring business pro-
cesses and driving a green brand reputation (Shafique etal.
2021). To conclude, this study stands on the notion that
responding to the NRBV lens means achieving the three
main green strategies; hence, GEO is one of the leading
solutions that cover the NRBV triple green strategies. The
study contributed to the NRBV and DCV by addressing
the contribution of GEO, GAC, and GI’s in sustainability
and climate change improvement.
GEO is a modern business journey that aims to enhance
firms’ financial and environmental benefits (Jiang etal.
2018). By emphasizing external ecological issues and
eco-friendly practices (Guo etal. 2020), GEO responds
to external environmental pressures from the government,
customers, the environment, and society (Chen and Chang
2013). Also, GEO views the eco-workplace environment as
necessary to level up employees’ green mindset and behav-
ior toward reducing hazardous waste and promoting eco-
friendly products and job satisfaction among employees
(Makhloufi etal. 2021d). The more fabulous GEO tracks
environmental business opportunities and the influence
of green practices leveling up EP (Shafique etal. 2021).
Building on the NRBV, this study investigates whether GEO
responds to the external environment via green technical
productions, green knowledge, or clean technologies.
Green Innovation (GI) assists firms strategically in resolv-
ing environmental pressures and consolidating GEO in pro-
moting clean technologies, eco-practices, and eco-work-
place environment (Kraus etal. 2020). Technology-based
eco-innovation helps and advances eco-industry practices
and improves environmental performance (Raza and Murad
2014). Therefore, GI can be described as an eco-strategic
solution that firms can use to spread green production sys-
tems and services to drive green value-added and reduce
ecosystem degeneration (Bresciani etal. 2023). Firms’ green
behavior is the hallmark of a corporation’s responsiveness
to external environmental pressures (Makhloufi etal. 2020).
Hence, this research acknowledged GI as a corporation’s
green capability aimed at increasing environmental innova-
tion businesses, in line with the concerns highlighted by
the NRBV to preserve the external natural environment
(Shehzad etal. 2023). According to the NRBV, GI includes
techniques and strategies that prioritize strategic solutions to
reducing pollution, environmental products, and a sustaina-
ble environment (Appiah etal. 2023), consequently support-
ing firms’ environmental performance (Corrocher and Solito
2017). From the extant literature, practical and theoretical
gaps exist on GEO, GI, and EP. Therefore, the present study
attempts to fill this gap and offers significant implications for
academics, researchers, entrepreneurs, and societies.
Firms GI aims to deliver environmental products, green
business processes, reduce CO2 emissions and develop eco-
engineering (Rehman etal. 2021b). Green absorptive capac-
ity (GAC), on the other hand, is the corporation’s capability
to create green knowledge and leverage environmental prac-
tices to overcome external environmental concerns and to
capture ecofriendly business opportunities (Makhloufi etal.
2021d). In doing so, GAC, seen as the key driver of green
organizational culture, generates knowledge accumulated
over long years of experience and practices. It ultimately
results in GEO reorganizing the entire eco-business process
(Rehman etal. 2022). Thus, GAC is a dynamic environmen-
tal capability that restructures business processes, supports
the GEO’s pro-environmental actions, and improves EP.
DCV lens asserted that absorptive capacity is associated
with EO and drives green business value-added (Rodrigo-
Alarcón etal. 2020). Scholars Hughes etal. (2018) suggest
that firms with high AC enhance the EO effect on several
performance measures. Given the green business environ-
ment, Zhang etal. (2020) argued that GAC improves the
relationship between firms’ EO and innovation outcomes.
As a result, it fosters eco-innovation strategies to improve
environmental performance. This study intends to answer
whether coupling GAC with GEO and GI initiatives can
improve firms’ ecological performance, as suggested in the
NRBV. Importantly, this study applied the NRBV to advance
Environmental Science and Pollution Research
1 3
the body of knowledge by explaining GAC’s crucial sup-
portive role in overcoming environmental issues in the light
of green entrepreneurs’ mindset.
GAC leads firms to develop and create green knowledge
to maintain EP by greening business processes, spreading
green learning, and leveraging green training programs to
respond to ecosystem pollution (Qu etal. 2022). Moreover,
an empirical investigation by Tang etal. (2018) revealed
a strong association between MEC and firms engaging in
eco-practices that resulted in business performance. Addi-
tionally, Xue etal. (2019) claim that MEC improves eco-
practices and remains EP. The theory emphasized that to
advance EP; an organization should rely on triple key pillars:
reduction of pollution, prioritization of eco-products, and
enhancement of sustainable development. This recognized
the primary responsibility of corporations to avoid ecosys-
tem degeneration. Based on the theory applied, this paper
focused on MEC as a key that supports firms’ environmental
activities, thus complementing earlier studies on the associa-
tion effect of GEO, MEC and GI on EP.
Resting on the NRBV and DCV theories, this research
emphasizes how GAC and MEC coupled to level up GI prac-
tices and GEO to improve firms’ EP. Moreover, this research
advances entrepreneurship and environmental innovation
research streams. Supporting the NRBV and overcoming
the shortage seen in the DCV, this paper aims to outline the
five research questions: (1) Does GAC level up GI activities,
and GEO enhances EP? (2) Does MEC support GI activi-
ties and GEO to enhance EP? (3) To what extent does GEO
increase firms’ GAC? (4) Is MEC the core focus of firms’
GEO? (5) To what extent do GAC and MEC influence EP?
Based on the above questions, this study intends to achieve
the following objectives: (a) to determine the role of GAC
and MEC in assisting GEO and GI to drive EP, (b) to antici-
pate whether GAC would be able to level up GI to fit GEO
agenda, (c) to examine the crucial role of MEC to facilitate
GEO strategies, and (d) to validate the role of MEC and
GAC on determining the core competencies of firms GI as
the leading sources of EP.
The novelty of this study is seen as the first empirical
research responding to the NRBV arguments by incorporat-
ing four significant factors (GEO, GI, GAC, and MEC) driv-
ing the three vital environmental strategies suggested by the
NRBV in a single model. The DCT advocates that GAC is
the core driver of GEO’s proactive eco-strategy to guarantee
the equilibrium of environmental restrictions and eco-busi-
ness growth in an uncertain business environment (Teece
2016). In contrast, GEO’s primary objective is to enhance
EP while continuously tracking ecofriendly opportunities
(Jiang etal. 2018). The study has seen GEO and GAC as a
dynamic green strategy helping firms to sustain the exter-
nal natural environment. This research extends the DCV
theory by incorporating the NRBV viewpoint to explain the
importance of green entrepreneurship, eco-innovation, and
ecosystem performance. Besides, this research advances the
NRBV theory by testing it in entrepreneurship studies. This
study emphasizes the strategic impact of managerial envi-
ronmental concerns in promoting green practices and EP. In
addition, this study developed and tested the first theoretical
model that addresses three distinct drivers of environmental
strategies in a single model. In doing so, the study’s findings
support the NRBV and extend the theory of DCT by demon-
strating the crucial role of the interrelationships highlighted
in the research model.
Theoretical background andhypotheses
development
Green entrepreneurship orientation (GEO),
green absorptive capacity (GAC), andmanagerial
environmental concern (MEC)
Entrepreneurship-based green strategic behavior intends to
capture green business opportunities, reduce pollution and
maintain EP sustainability. GEO is the pro-environmental
behavior that tracks new opportunities and addresses threats
(Patel 2019), and its core focuses are environmental prod-
ucts and processes (Demirel etal. 2019). GEO can key into
environmental markets by leveraging clean technology,
advanced systems, green training programs, and employees’
behavior to advance environmental performance (Rehman
etal. 2021b). Further, GAC assists firms in deploying new
green knowledge and focuses on environmental activities
that should be prioritized (Makhloufi etal. 2021d). This
includes using clean technologies and advanced processes
to increase resource efficiencies, yielding green energies,
and improving EP (Kong etal. 2016). Teece (2014) argued
that firms’ AC is one of the fundamental driving forces of
entrepreneurs’ success. It supports creating new knowledge,
developing practices, enhancing agility, and promoting eco-
business opportunities (Qu etal. 2022).
In addition, Wang, Zhang, and Teng (2022) suggest that
GAC helps entrepreneurs track, grasp and mobilize green
capabilities to invest in emerging environmental opportuni-
ties. In contrast, other studies advocate that GAC strengthens
GEO to stabilize eco-business growth by deploying green
solutions and leveling eco-practices (Meirun etal. 2020).
Therefore, AC can play a core role in generating new green
knowledge to support entrepreneurs’ environmental strate-
gies. Ultimately, GAC scanned environmental businesses,
searched for opportunities, and comprehended rivals’ reac-
tions (Qu etal. 2022). Firms possessing high GAC can
speedily develop green knowledge by combining accessed
with actual knowledge, thus encouraging the transformation
of established knowledge into products and processes (Wang
Environmental Science and Pollution Research
1 3
etal. 2023). Eventually, it leads to upgrading eco-practices
and green organizational culture (Shafique etal. 2021).
A recent empirical study by Mao etal. (2021) stated that
entrepreneurial orientation improves the firm’s absorptive
capacity. Based on the dynamic environmental capabilities
point of view and dynamic capability theory, entrepreneurs
face solid pressures of rare natural resources, regulations,
and increased institutional constraints. They are required to
leverage eco-friendly strategies and practices to foster envi-
ronmental performance. By doing so, GEOs are necessary
to enforce firms’ green dynamic capabilities, such as GAC,
to be reconfigured and upgraded to the level where firms can
respond to environmental pressures and external environ-
mental requirements. Green-orientated firms use advanced
green knowledge to grasp eco-opportunities and enhance the
green capability to drive commercial value (Meirun etal.
2020).
Green entrepreneurship with sufficient AC would facili-
tate eco-market opportunities, information access, and
understanding and estimating customers’ behavior and
preferences (Patel etal. 2015). Thus, aiding in the develop-
ment and adoption of clean technologies to support environ-
mental performance (Zahra etal. 2009). Overall, absorptive
capacity upgrade firms to leverage green technique innova-
tion. An empirical study by Patel (2019) examined how AC
stimulates entrepreneurs’ cognitive skills to determine eco-
opportunities during the new product development stage.
Sciascia etal. (2014) stated that AC-EO strengthened and
drove business performance. At the same time, Engelen
etal. (2014) argued that AC is essential to support GEO’s
firm performance in an uncertain environment. These stud-
ies asserted that AC is an outstanding dynamic capability
(Makhloufi etal. 2021a, b, c, d) that pushes an entrepreneur
to control and achieve higher environmental performance.
Although numerous studies exist on GEO, GAC, MEC,
and EP, further investigation into the effect of GEO on GAC,
MEC, and EP is needed. Also, how GEO levels GAC to
emphasize EP is still ambiguous and thus requires further
attention. The GEO’s key responsibility is to respond to eco-
system degeneration by deploying environmental solutions
and utilizing eco-processes to improve the external envi-
ronment (Nordin and Hassan 2019). Aside from that, GEO
and GAC aim to achieve the following MEC objectives: (1)
the development of eco-friendly products (Makhloufi etal.
2021d), (2) the management of hazardous waste and CO2
emissions, (3) improvement of green workplaces (Makhloufi
etal. 2021b; Makhloufi etal. 2020) and (4) enhancement
of firm’s green image. GEO is a pro-environmental behav-
ior supported by GAC and MEC (Guo etal. 2020). In
light of those mentioned above, we advance the following
hypotheses:
H1: GEO positively influences green absorptive capacity.
H2: GEO positively influences managerial environmental
concerns.
In the context of green entrepreneurship and eco-inno-
vation, previous studies (Lin etal. 2020; Makhloufi etal.
2021d; Qu etal. 2022; Wang etal. 2023; Zhang etal. 2020)
recognized GAC as a predictor and intermediary constructs
in the relationship between GEO-GI and EP. Emphasizing
EP from a GI point of view in the presence of GAC is neces-
sary for the existing literature. Prior studies have separately
studied the impact of AC on the association between EO and
innovation measures. The above studies argued that meas-
uring innovation outcomes from different points of view
yielded inconclusive findings, which extend the debates
on the potential role of GAC in the relationship between
environmental entrepreneurship and its consequences on
individuals, firms, and the external environment. Studies
(Makhloufi etal. 2020; Saudi etal. 2019; Xue etal. 2019)
used GAC as a moderator variable to estimate the effect of
green innovation on different measures of sustainable EP.
However, a dearth of studies links GAC-GEO and GAC-GI
to enhance environmental performance. Hence, GAC needs
to address the role of leveling up entrepreneurs’ knowledge
and skills to capture green opportunities.
Managers’ green behavior significantly balances firms’
eco-business opportunities with environmental degradation
(Jang etal. 2017). Managers’ exhibition of green behav-
ior and GEO’s connectedness foster firms to leverage and
develop green dynamic capabilities to estimate future eco-
opportunities (Van Doorn etal. 2017). The environmental
manager’s core role is to be sensitive toward environmen-
tal degradation (Ahmed etal. 2021; Raza and Khan 2022),
and as a result, green practices will be augmented. Eventu-
ally, this would enrich the firm’s green culture and foster
environmental product development (Rehman etal. 2022).
Hence, GEO can deploy proactive environmental strategies
focusing on environmental concerns to solve and support
the sustainability of EP (Shafique etal. 2021). Many stud-
ies (Makhloufi etal. 2021d; Rehman etal. 2021a; Rehman
etal. 2022; Rehman etal. 2023; Shafique etal. 2021; Wang
etal. 2023) have stated that GEO is aware and influenced
much more by environmental degeneration. Moreover, these
green issues usually determine the success of entrepreneurs’
green mindset.
This study argued that firms’ green knowledge support
entrepreneurs’ proactive green mindset to leverage green
practices, green culture, and green human behavior, which
help firms spread a green image reflecting their sustainability
responsibilities. However, this can be achieved when green
innovation is aligned with green entrepreneurs’ behaviors.
In this regard, GAC is the critical driver that balances the
need to leverage green practices and entrepreneurs’ green
behavior. Hence, this study seeks to bridge this critical gap
Environmental Science and Pollution Research
1 3
by examining the association between GEO-GAC and EP.
The study aimed to open new research rooms in environmen-
tal entrepreneurship and eco-innovation studies. This paper
considers GEO a primary green capability that stimulates
firms’ alertness to capture eco-opportunities. Based on the
preceding, the following hypotheses are proposed:
H1a: Green absorptive capacity mediates the relationship
between green entrepreneurship orientation and environ-
mental performance.
H1b: Green absorptive capacity mediates the relation-
ship between green innovation and environmental per-
formance.
GI refers to the firm’s capability to spread eco-practices
to upgrade eco-products and eco-processes (Makhloufi
etal. 2023), thereby supplying environmental products that
consume less energy and have less environmental impact
(Chen etal. 2006; Makhloufi etal. 2021d). Firms’ green
strategy relies on eco-innovation practices to reduce eco-
system degradation and deliver green value-added (Chen
2008). GI improves the capacity to respond to societal and
governmental pressures and customer adaptability, leading
to addressing green issues (Wang etal. 2023).
Studies on managers’ environmental concerns (Makhloufi
etal. 2021d) acknowledged that MEC is the primary deter-
minant of green capability that level up eco-businesses and
prioritize environmental sustainability performance. MEC
focuses on environmental problems by addressing firms’
business activities contributing to ecosystem problems
(Piwowar-Sulej etal. 2023; Xue etal. 2019). This could
encourage GEO to track and invest in eco-businesses. DCV
advocates that top managers prioritizing green issues are
responsible for tracking eco-businesses markets (Teece
2016), while the NRBV asserted that it is crucial to bal-
ance business growth, business demands and the external
environment to sustain environmental performance (Hart
and Dowell 2011). By applying these theories, top manag-
ers’ commitment is paramount (Ali etal. 2022; Raza and
Khan 2022). Managers’ primary responsibility is reducing
environmental degradation (Meirun etal. 2020; Urom etal.
2021) and empowering GEOs to search for green opportuni-
ties (Shafique etal. 2021). This suggests that environmental
impacts should resolve green opportunities tracked by GEO.
As a result, MEC is seen as the backbone of a firms’ envi-
ronmental capabilities that support GEO to explore green
business markets (Tze San etal. 2022).
This study contributes to and covers sustainability issues
highlighted by the NRBV and supported by the DCV. It
means that an entrepreneur’s green mindset’s primary
objective is to align sustainable development with a green
business agenda. This can happen when applying and inno-
vating green practices, developing products that produce
less environmental impact, enhancing energy consumption,
decreasing CO2 emissions and advancing green processes.
The literature shows that past studies (Alvarado etal. 2021)
have analyzed the environmental degradation associated
with the ecological footprint in Latin America. The study
found that inappropriate use of natural resources dramati-
cally impacts ecological degradation. Another study by
Dagar etal. (2021) focuses on agriculture sustainability and
the use of agro-climatic zones. Despite the vital relationship
and impact of agriculture sustainability on socio-economic
sustainability, the study advises farmers and policymakers
to find the best solutions to enhance sustainable agricultural
production. This suggests that farmers should rely on green
innovation practices to boost production performance and
maintain sustainability in agriculture. At the same time, a
study by Zhang etal. (2022) emphasized the vital impact of
advanced information technologies on CO2 emissions, which
means the contribution of clean technologies and techno-
logical innovation to sustainable development. To conclude,
green technological innovation is the leading driver of sus-
tainable development and product stewardship. This, in turn,
matches the NRBV triple green concerns.
Furthermore, top management considered GI a green key
to advance businesses and maintain ecosystem degeneration
(Makhloufi etal. 2021d). Thus, mobilizing valuable capa-
bilities can potentially influence eco-practices and EP (Wang
etal. 2023), in line with the proposition of NRBV. In this
study, MEC refers to the manager’s cognitive awareness and
encourages GEOs to apply environmental strategies. This
paper advocates that the greater MEC is incorporated into
environmental innovation, the more GEO can balance the
seizure of eco-opportunities and EP. Indeed, researchers
Makhloufi etal. (2021d) saw MEC as an essential resource
that improves GI’s impact on EP. Although the role of MEC
in driving GEO initiatives to improve EP is poorly exam-
ined, there exists evidence of the impact of MEC on the
association between GEO, GI, and EP. Hence, we proposed
the following hypotheses:
H2a: Managerial environmental concern mediates the
relationship between green entrepreneurship orientation
and environmental performance.
H2b: Managerial environmental concern mediates the
relationship between green innovation and environmen-
tal performance.
Green innovation (GI), GAC andMEC
The NRBV theory argues that corporations must identify
green core activities to maintain EP (Hart and Dowell 2011).
This can be reached when corporations address three key
environmental pillars, namely (1) pollution, (2) environ-
mental products, and (3) sustainable development. Based
Environmental Science and Pollution Research
1 3
on this theory, this research views GI as a dynamic eco-
strategic solution to achieve the three pillars above. GI can
be regarded as a firm green policy seeking to rationalize the
use of natural resources and sustain the EP by fostering the
efficiency of resources (Shafique etal. 2021).
On the other hand, GAC is the firm’s capacity to track,
grasp and integrate accessed new knowledge into the actual
firm’s knowledge processes (Pacheco etal. 2018). This
leads to enhancing knowledge, practices, skills, routines,
and know-how, which, in turn, level up the business pro-
cess (Xue etal. 2019) and create distinct green capabilities
that can afford unlimited advantages (Grimpe and Kaiser
2010). Thus, it can be claimed that GI strongly predicts
GAC. Green innovation is about deploying new ideas, updat-
ing green programs, adopting eco-practices, and fostering
green employees’ workplaces to improve the efficiencies of
green resources, reduce pollution and maintain environmen-
tal performance (Rehman etal. 2021b). Meanwhile, GAC
represents the ultimate solution to achieving eco-practices
(Zhang etal. 2020). Accordingly, this research agrees with
the NRBV propositions that GI and GAC are the core focus
of EP (Rehman etal. 2022). In other words, the study pro-
poses that GI and GAC will enhance ecosystem sustainabil-
ity and empower GEO’s proactive environmental behavior.
Absorptive capacity literature acknowledged the poten-
tial impact of AC in developing green innovation techniques
and the driving outcomes on GEO and EP. However, the
estimation of eco-opportunities has not received any atten-
tion in the eco-entrepreneurship literature. Thus, this study
will contribute new knowledge to the environmental entre-
preneurship literature by highlighting how both GI improve
managerial concern and tackle environmental problems. To
do so, by emphasizing the role of green innovation to enforce
and motivate firms to upgrade green dynamic capabilities,
GAC, as a result, is one of the significant environmental
capabilities that firms rely on to facilitate GI and enhance
the eco-business environment.
As modern manufacturers regard GI as a green capability
to sustain EP (Yan and Zhang 2021), it is crucial to identify
the key factors that enable corporations to upgrade GI. Wang
etal. (2023) suggested that empowering GI is paramount for
firms to generate green business value and is the main eco-
resources that improve managerial environmental concerns
(Xue etal. 2019). However, understanding how and under
which conditions MEC will help GI to drive EP and busi-
ness growth remains an unanswered question. To fill this
gap, this research investigates the relationship between GI,
GAC, and MEC to polish environmental performance. Thus,
we hypothesize the following:
H3: Green innovation positively influences GAC.
H4: Green innovation positively influences MEC.
Green absorptive capacity (GAC), MEC,
andenvironmental performance (EP)
Green absorptive capacity is the firm’s capacity to advance
newly developed knowledge and incorporate it into the actual
knowledge database (Zhang etal. 2020), thereby enriching
firms’ knowledge resources (Cohen and Levinthal 1990).
The developed knowledge helps firms to update processes
and product innovation (Makhloufi etal. 2021d). As firms
are under environmental and customer pressures, leverag-
ing green knowledge is crucial to transform their business
management from a traditional to a pro-environmental inno-
vation approach (Albort-Morant etal. 2018). Hence, GAC
is a dynamic key driver of green knowledge, which consists
of information about eco-market demands, customer eco-
friendly product needs, governmental regulations and social-
environmental concerns (Pacheco etal. 2018). Subsequently,
the acquired green knowledge can be assimilated into green
policies and strategies for firms (Zhao etal. 2019). Firms
rely on GAC to upgrade their eco-business process, influ-
encing top-management decision-making (Cao and Chen
2019). In addition, GAC may influence managers to polish
their green knowledge and behavior (Van Doorn etal. 2017).
This will, in turn, lead to the improvement of green practices
and their deployment within activities that tend to generate
negative environmental impacts (Gebauer etal. 2012). GAC
focuses on tackling activities that contribute to pollution
and environmental problems by enabling firms’ eco-busi-
ness strategies (e.g., eco-business processes and products)
to reduce energy consumption, hazardous waste and CO2
emission (Chang etal. 2013). In other words, it facilitates
firms’ environmental business strategies responding to envi-
ronmental concerns (Patel etal. 2015), and strengthening
the triple pillars of the NRBV (Makhloufi etal. 2021d). In
addition, GAC assists firms with valuable information to
track eco-friendly business opportunities, respond to green
markets demands, advance eco-processes techniques, sup-
ply eco-products, reduce energy use and forecast external
environment problems (Zhang etal. 2020). Given those
described above, we hypothesize the following:
H5: Green absorptive capacity positively influences
MEC.
H6: Green absorptive capacity positively influences envi-
ronmental performance.
Managerial environmental concern
andenvironmental performance (EP)
Eco-opportunities and EP are the primary core expertise
of MEC. Meanwhile, entrepreneurs recognized eco-prac-
tices as the primary source of eco-opportunities (Meirun
etal. 2020). MEC is the backbone of a firm environmental
Environmental Science and Pollution Research
1 3
dynamic capability that addresses environmental prob-
lems (Ebrahimi and Mirbargkar 2017), as the commit-
ment of top management to environmental restrictions
can promote green organizational culture (Haldorai etal.
2022). However, managers must acquire enough skills to
address environmental threats (Jiang etal. 2018). Van
Doorn etal. (2017) suggested that top managers struggle
to support GEO due to the high uncertainty about their
business environment. As a result, this research questions
how top environmental managers can utilize the GEO
core environmental focus to maintain ecosystem perfor-
mance. Meanwhile, studies (Appiah etal. 2023; Shehzad
etal. 2023; Skordoulis etal. 2022) realized that corpora-
tions’ capacities still differ in assisting GEO to drive EP.
As such, the literature indicates that there were miss-
ing practical and theoretical gaps in analyzing the poten-
tial role of top managers’ capacities to level up entre-
preneurs’ alertness and cognitive skills in exploiting
potential emerging green opportunities (Fig.1) (Soomro
etal. 2023). Top managers are critical for determining
and exploiting profitable eco-business opportunities and
reconfiguring eco-entrepreneurial strategies (Nguyen
etal. 2023; Soomro etal. 2023). Studies such as Saudi
etal. (2019) and Tang etal. (2018) claimed that man-
agers’ possessing valuable environmental responsibil-
ity tends to impact firms’ EP (Ahmed etal. 2020). In
comparison, Cao and Chen (2019) argued that managers
acquiring substantial knowledge would develop new ways
of GI that polish EP. This means a relationship exists
between MEC and environmental entrepreneurship, albeit
via an ambiguous mechanism. According to the NRBV,
MEC is essential for the success of GI, GEO and EP.
Considering the abovementioned, we hypothesis:
H7: Managerial environmental concern positively
influences environmental performance.
Methodology
Sampling, respondents, anddata collection
To achieve the study’s objectives and predict the different
paths between constructs, the study paid special attention
to the data provided by the respondents. The study used a
random sampling technique to select respondents from a
population of 11,140 petrochemical firms registered with
the State Administration for Industry and Commerce of the
People’s Republic of China. By applying Krejcie and Mor-
gan (1970) formula, the study determined a sample size of
370 participating firms. Israel (2003) suggested that the sam-
ple size should be increased or doubled to avoid the issues
of missing surveys and low-response rates. Consequently,
the study approached 580 respondents from different depart-
ments handling middle to upper-managerial executive posi-
tions to complete the questionnaire.
The study questionnaire was formulated in a dual lan-
guage (English and Chinese versions) and sent to appropri-
ate respondents. Afterward, the researcher contacted them
via phone and email, explaining the study objectives and
clarifying the confidentiality of their information. From
March to July 2019, out of 520 questionnaires distributed,
the researcher collected 234 questionnaires, indicating a
43.6% response rate in 5 months.
Measurement ofstudy variables
To ensure the accuracy of the research questions (items),
specific items were designed for each group of questions to
form one construct among others. The study conducted an
in-depth content validity to enrich the content of measure-
ment tool (questions) by inviting two professors in the entre-
preneurship and innovation field and three petrochemical
industry experts. The constructive feedback returned by the
academics and professionals was considered to furnish the
Fig. 1 Theoretical framework
Environmental Science and Pollution Research
1 3
questionnaire items and subsequently create the final draft.
Moreover, we conducted a pilot study to validate the ques-
tionnaire (items) and confirm the final draft.
Using past literature, appropriate measurements were
adapted to predict this study’s constructs. This study meas-
ured GAC by adopting items from Pacheco etal. (2018).
Furthermore, the study adopted four items from Xue etal.
(2019) and Meirun etal. (2020) to measure MEC. The study
adopted items from studies of Chen etal. (2006) and Pacheco
etal. (2018) to estimate GI, while GEO items were culled
from the study of Jiang etal. (2018). Lastly, items measuring
environmental performance were adapted from the studies of
Makhloufi etal. (2021d) and Jiang etal. (2018). The ques-
tionnaire was measured using a 7-point Likert scale, ranging
from 1 (strongly disagree) to 7 (strongly agree).
The study used control variables (Tang etal. 2018) to
ensure the firms share the same power of acquiring capabili-
ties or differentiation. A number of employees were applied,
and identifying firms’ age was selected to distinguish
between firms’ capacity to acquire substantial resources and
impacting strategic decisions which would influence the out-
comes (exogenous constructs).
Data analysis
To achieve the study objectives and for better predictabil-
ity, the Partial Least Square Structural Equation Modeling
(PLS-SEM) was performed to assess the measurement
(convergent and discriminant validity) and structural mod-
els (Henseler etal. 2015). The PLS technique was favored
mainly because it (a) allows maximization of the predic-
tive precision of endogenous constructs while maintaining
more items for each construct, (b) fits studies whose sample
data is not normally distributed (Chin 1998), (c) fits studies
with small sample size, and (d) is suitable for complicated
research model (mediation and moderation path) (Makhloufi
etal. 2021a, b, c, d). This study begins with testing the meas-
urement model and then predicts the structural model’s rel-
evance through different tests discussed below.
To assess whether the study contained any non-response
bias, an independent samples t-test was conducted. The study
findings indicate that Levene’s test for equality of variance
was higher than 0.05 of all constructs, fulfilling the signifi-
cance level requirement highlighted by Pallant (2011), which
suggests that this study is free of non-response bias. In addi-
tion, by applying a full collinearity test, the study checked
for the existence of Common Method Variance (CMV) to
ascertain the safety and validity of the measurement model.
The estimated observed values of Variance Inflation Factors
(VIFs) generated for all constructs must be below 3.3 (Kock
2015); the results indicated that the model was free of CMV.
Measurement model: validity andreliability
The study assesses the measurement model in two stages,
namely convergent validity and discriminant validity. The
PLS software was used to examine convergent validity
tests of the indicator’s outer loading, factor loading, com-
posite reliability, and Average Variance Extracted (AVE).
Table1 below shows that all item loadings exceeded 0.50
(Hair etal. 2014). In addition, the composite reliability of
all constructs was larger than 0.70 (Chin 1998), while AVE
values were bigger than 0.450 (Hair etal. 2017).
Furthermore, the study tested the discriminant valid-
ity by applying the Fornell and Larcker criterion. Table2
shows that the diagonals’ bolded values were more sig-
nificant than those in their respective row and column,
suggesting that the items applied in this research were dis-
criminant. The second test examined the cross-loading cri-
terion, and the results showed that outer loading exceeded
cross-loading for all constructs, suggesting that the results
are valid. The third test of discriminant validity was the
Heterotrait-Monotrait (HTMT) ratio, developed by Hense-
ler etal. (2015). Table2 shows that the parentheses values
are less than 0.85; the HTMT criterion (Kline etal. 2012)
advises that the discriminant validity was succeeded.
Structural model ofthestudy
Figure2 and Table3 present the structural path results and
indicate a positive and significant relationship between
GEO and GAC (β = 0.465, t = 9.825, p < 0.000), thus
supporting H1. The GEO path was positive and statisti-
cally significant on MEC (β = 0.112, t = 1.684, p < 0.039),
validating H2. Next, green innovation recorded a posi-
tive relationship with GAC but was not statistically sig-
nificant (β = 0.071, t = 1.436, p < 0.073), denoting that
H3 is rejected. Meanwhile, the results showed that green
innovation positively and significantly influenced MEC
(β = 0.411, t = 7.312, p < 0.000), thus supporting H4.
Furthermore, GAC recorded a positive and significant
impact on MEC (β = 0.097, t = 1.769, p < 0.004) and EP
(β = 0.522, t = 12.415, p < 0.000), signifying that H5 and
H6 were supported. Lastly, MEC exhibits a significant
and positive effect on EP (β = 0.113, t = 2.309, p < 0.012);
hence, H7 is upheld. The study addressed the effect of
a firm’s age (years of operation) and size (number of
employees) as control variables. Results revealed firm size
(β = 0.103, t = 2.134, p > 0.000) and firm age (β = 0.156,
t = 2.072, p < 0.000) recorded significant impact on envi-
ronmental performance, indicating that these firms own
enough experiences and resources to support environmen-
tal innovation initiatives.
Environmental Science and Pollution Research
1 3
The effect size ofthemodel
The effect size (f2) of endogenous factors on certain exog-
enous factors explains how these factors are connected. The
relationship between GAC, MEC, and EP shows the model’s
strength (Joe F Hair Jr etal., 2014). Meanwhile, the f2 values
of 0.02, 0.15, and 0.35 are considered small, medium, and
large effect sizes, respectively (Cohen 1988). As shown in
Table3, GEO’s effect size on GAC and MEC was medium
and weak, respectively, whereas green innovation’s effect
size on GAC and MEC was weak and medium. In addi-
tion, the effect size of GAC on MEC and EP was weak and
large, respectively. Last but not the least, MEC recorded a
Table 1 Measurement model
results
CA, Cronbach’s alpha; CR, composite reliability; AVE, average variance extracted
Construct Item Loading CA CR AVE
Green innovation GI 1 0.598 0.838 0.860 0.472
GI 2 –
GI 3 0.522
GI 4 –
GI 5 –
GI 6 0.726
GI 7 0.770
GI 8 0.730
GI 9 0.717
GI 10 0.711
Green entrepreneurship orientation GEO 1 0.599 0.805 0.864 0.563
GEO 2 0.831
GEO 3 0.787
GEO 4 0.777
GEO 5 0.737
Green absorptive capacity GAC 1 0.657 0.943 0.932 0.625
GAC 2 0.694
GAC 3 0.745
GAC 4 0.889
GAC 5 0.781
GAC 6 0.887
GAC 7 0.862
GAC 8 0.845
GAC 9 0.835
GAC 10 0.663
Managerial environmental concern MEC 1 0.898 0.941 0.958 0.850
MEC 2 0.933
MEC 3 0.944
MEC 4 0.913
Environmental performance EP 1 0.933 0.960 0.967 0.832
EP 2 0.921
EP 3 0.914
EP 4 0.903
EP 5 0.875
EP 6 0.926
Table 2 Fornell-Larcker criterion and Heterotrait-Monotrait ratio
(HTMT)
Variable MEC EP GAC GEO GI
MEC 0.922
EP 0.228
(0.23) 0.912
GAC 0.684
(0.71)
0.223
(0.22) 0.791
GEO 0.263
(0.27)
0.501
(0.55)
0.335
(0.37) 0.75
GI 0.531
(0.50)
0.458
(0.58)
0.564
(0.52)
0.541
(0.69) 0.687
Environmental Science and Pollution Research
1 3
weak effect size on EP. Moreover, these endogenous fac-
tors (e.g., GEO and GI) explain and contribute high-value
variance (R2 = 25.2%) on GAC and MEC (R2 = 26.8%) and
EP (R2 = 31.7%), indicating that they possess the most reli-
able impacts on exogenous factors. In addition, this research
examined the effects of both firms’ age and size as control
variables. The results indicated that firms’ size (β = 0.163,
t = 3.28, p > 0.002) and age (β = 0.357, t = 2.46, p < 0.000)
were statistically significant on environmental performance.
Since both control variables positively and significantly
impact EP, these firms may have acquired enough experience
and capabilities to deliver and level up their environmental
innovation practices.
Testing mediation effect
GAC’s mediation effect between GEO and GI on EP was
tested by using Preacher and Hayes (2004, 2008) approach
and the bootstrapping procedure. The result presented in
Table4 shows that GEO and GI indirect effect on EP has a
β value of 0.243 and a t-value of 6.70. As recommended by
Hair etal. (2013), we calculated the Variance Accounted For
(VAF) to determine the indirect effect size in relation to the
total effect. Accordingly, the VAF (direct effect/total effect)
has a value of 0.522 (0.243/0.465), indicating that 52.2% of
the GEO effect on EP is explained via the existence of the
mediation effect of GAC. Since the VAF is greater than 20%
Fig. 2 Results of the structural
model
Table 3 Results of structural
model analysis H Relationships B STDEV t-value p-value R2ƒ2Decision
H1 GEO –- > GAC 0.465 0.047 9.825 0.000 25.2% 0.226 Supported
H2 GEO –- > MEC 0.112 0.064 1.684 0.039 0.083 Supported
H3 GI –- > GAC 0.071 0.048 1.436 0.073 0.097 Rejected
H4 GI –- > MEC 0.411 0.053 7.312 0.000 26.8% 0.179 Supported
H5 GAC –- > MEC 0.097 0.055 1.769 0.004 31.7% 0.094 Supported
H6 GAC –- > EP 0.522 0.041 12.415 0.000 0.369 Supported
H7 MEC –- > EP 0.113 0.05 2.309 0.012 0.072 Supported
Table 4 Indirect effects in the
mediation model
GAC , green absorptive capacity; MEC, managerial environmental concern; GI, green innovation; GEO,
green entrepreneurship orientation; EP, environmental performance
Relationship Beta STDEV t-value p-value Confidence
interval
5% 95%
H1a GEO –- > GAC –- > EP 0.243 0.036 6.708 0.000 0.182 0.298
H1b GI –- > GAC –- > EP 0.037 0.025 1.446 0.074 0.003 0.079
H2a GEO –- > MEC –- > EP 0.098 0.011 1.108 0.13 0.00 0.038
H2b GI –- > MEC –- > EP 0.193 0.021 2.21 0.014 0.014 0.083
Environmental Science and Pollution Research
1 3
but less than 80%, it can be claimed that GAC exhibits a par-
tial mediation effect; hence, H1a is supported. Furthermore,
the indirect effect of GI on EP has the following indicators:
β = 0.037, t = 1.44, and VAF = 0.037/0.071 = 0.521. This
indicates that MEC’s mediation effect explains 52.1% of the
GI effect on EP via GAC. Thus, the relationship between GI
and EP is partially mediated, in agreement with H1b.
Moreover, the indirect effect of MEC on EP
has recorded a value of β = 0.098, indicating that
VAF = 0.098/0.112 = 87.5%, which infers that H2a
(GEO- > MEC- > EP) fully mediates the relationship
between GEO and EP. In other words, H2a is supported.
On the other hand, H2b was 46.9%, suggesting that MEC
partially mediated the relationship between GI and EP. Thus,
H2b is supported (see Tables4 and 5).
The study examined the structural model’s predictive rel-
evance (Q2) by applying the blindfolding procedures (Geis-
ser 1975). Q2 values greater than zero suggest that the model
is relevant, and when the Q2 values are near 1, it indicates
greater appropriateness of the model (Chin 1998). Refer-
ring to Table6, the Q2 values for GAC, MEC, and EP were
0.252, 0.268, and 0.317, respectively. The result indicates
that the connectedness among these exogenous constructs is
more relevant. In other words, green entrepreneurship and
innovation augment GAC and MEC’s association to enhance
EP. Cohen (1988) noted that R2 values above 0.26 are con-
sidered substantial, while values between 0.13 and 0.26 are
considered moderate. However, values between 0.02 and
0.13 are deemed weak. The R2 values of endogenous latent
constructs in Table6 are substantial for both MEC and EP
but moderate for GAC.
Discussion
The NRBV theory argues that firms should stand on three
key drivers, pollution reduction, product stewardship, and
EP sustainability, to ensure sustained ecosystem perfor-
mance and competitive advantages. This study, therefore,
aims to explain how environmental entrepreneurship and
green innovation can level up top-management awareness
to address environmental concerns and improve ecosystem
performance. The study also seeks to predict and examine
how GAC enhances the green entrepreneurship mindset to
harness green business opportunities in solving environmen-
tal challenges. In addition, the study emphasizes the impact
of GAC on individual and organizational green practices
toward better EP. More importantly, this research exhibits
novelty in estimating the combined effects of MEC-GEO
and MEC-GI in rescinding environmental degradation.
Last but not the least, this research contributes to the
existing literature on green entrepreneurship and innova-
tion while advancing the NRBV and DCV arguments. In
response to the NRBV, this study viewed GEO and GAC as
dynamic capabilities embedded within a firm’s green cul-
ture to enhance the entrepreneurial ecosystem. This can be
succeeded by leveraging green practices and focusing on
environmental activities to save natural resources (Hart and
Dowell 2011). Green innovation is a strategic solution with
environmental rejuvenation as its ultimate concern. Hence,
this study extends dynamic capability theory by incorpo-
rating the NRBV lens that emphasizes the need to respond
to environmental degradation by leveling up entrepreneurs’
green mindset to track eco-friendly business opportunities.
In advancing the NRBV, the study estimated the crucial
impact of GEO on the development of GAC and MEC. The
sorted findings indicate that GEO had a positive and sig-
nificant direct effect on GAC and MEC. A recent empiri-
cal study by Makhloufi, Laghouag, Meirun, etal. (2021)
found that GAC assists GEO in improving EP. Similarly,
this study also predicted the impact of GEO in developing
firms’ GAC. From the past literature (Hughes etal. 2018;
Makhloufi etal. 2021a, b, c, d; Patel 2019), green entre-
preneurship was observed to emphasize the development
of GAC as one of the critical sources of green knowledge,
practices, skills, and routine, all of which are necessary for
better outcome of green entrepreneurship on environmental
impacts. These findings agree with our study, thus validating
the first hypothesis. In addition, as expected, our findings
(see Table4) indicate that GEO has a positive and significant
impact on MEC, which means that green entrepreneurship
mainly emphasizes green business opportunities to reduce
Table 5 Variance accounted for (VAF) of the mediator variable for
GAC and MEC
GAC , green absorptive capacity; MEC, managerial environmental
concern; GI, green innovation; GEO, green entrepreneurship orienta-
tion; EP, environmental performance
Independ-
ent vari-
able
Mediator
variable
Depend-
ent vari-
able
Indirect
effect
Total
effect
VAF (%)
GEO GAC EP 0.243 0.465 52.25%
GI GAC EP 0.037 0.071 52.11%
GEO MEC EP 0.098 0.112 87.5%
GI MEC EP 0.193 0.411 46.95%
Table 6 Results of variance explained and predictive relevance
Construct Variance
explained
(R2)
Predictive
relevance
(Q2)
Green absorptive capacity (GAC) 25.2% 24.7%
Managerial environmental concern (MEC) 26.8% 25.9%
Environmental performance (EP) 31.7% 31.3%
Environmental Science and Pollution Research
1 3
the environmental effects (Ruiz-Ortega etal. 2013). This
view represents the typical entrepreneur’s culture and objec-
tive. The study findings align with the NRBV perspective
and respond to the three environmental criteria of the theory
(Meirun etal. 2020), thus validating the second hypothesis.
In addition, the study examined the role of green innova-
tion on firms’ MEC and GEC. Table4 shows that GI posi-
tively affects MEC while failing to influence firms’ GAC.
This means that H3 was supported, while H4 was rejected.
Based on the NRBV, firms deploying green practices, skills,
knowledge, and routines representing green organizational
culture would encourage managers to address environmen-
tal problems and improve their green behavior and ability
(Rehman etal. 2021b). Although the results revealed a posi-
tive association between GI and GAC, it was not statisti-
cally significant. This means that firms’ green processes and
products should be aligned with the existence of GAC. The
more gaps between GI and GAC, the more firms struggle to
enhance their green practices and knowledge (Cohen and
Levinthal 1990), thereby truncating their response to envi-
ronmental challenges. On the contrary, other studies found
that GAC positively and significantly influences firms’ GI
(Meirun etal. 2020).
Besides, the findings indicate that GAC is significantly
and positively associated with MEC and EP, thus supporting
H5 and H6. Literature suggests that green absorptive capac-
ity plays a crucial role in delivering green knowledge and
upgrading firms’ actual knowledge and practices (Gebauer
etal. 2012), which in turn allows firms to level up their
managerial environmental awareness, human resources prac-
tices, employees’ green behavior and production processes
(Pacheco etal. 2018). This also improves top-management
green behavior, knowledge, and practices, eventually
improving environmental and organizational performance
(Rehman etal. 2021b). Moreover, the study found that
MEC positively and significantly impacts EP; thus, H7 is
supported. Prior studies (Cao and Chen 2019; Jang etal.
2017) argued that top management is mainly responsible for
driving green practices to reduce hazardous waste and CO2
emissions and encourage clean technology and green culture
among employees, managers, and executives responding to
environmental degradation. In this regard, the present find-
ings concur with the past studies. Hence, managers should
seek knowledge and raise awareness about the importance
of green processes and products to improve the ecosystem
and firm performance (Van Doorn etal. 2017).
From the DCV lens, GEO is seen as a green dynamic
capability to track and capture entrepreneurial green oppor-
tunities to respond to environmental degradation (Hart and
Dowell 2011). The core objective of GAC is to emphasize
GEO strategies. Thus, the interaction between GAC and
GEO is expected to be high (Engelen etal. 2014). Several
studies (Patel 2019; Patel etal. 2015; Sciascia etal. 2014)
stated that GAC enhances GEO’s impact on environmen-
tal and organizational performance, which agrees with
H1a. Furthermore, the study discovered that GI practices
coupled with GAC positively impact firms’ environmental
performance (Albort-Morant etal. 2018). This suggests
that GAC introduced valuable green knowledge, skills, and
approaches to firms to fulfill environmental entrepreneurship
(Engelen etal. 2014), which supports H1b. Indeed, the find-
ings indicate that GAC partially mediates the relationship
between GEO and GI on environmental performance, sug-
gesting that GAC plays a strategic role in facilitating GEO
and GI to address environmental concerns (Albort-Morant
etal. 2018; Aljanabi and Mohd Noor 2015; Pacheco etal.
2018; Xie etal. 2015). Scholars (Cohen and Levinthal 1990;
Zhang etal. 2020) argued that GAC is the primary driver
of firms’ transformation, reconfiguration, and advancement
of their dynamic capabilities to respond to environmental
changes and uncertainties, especially those related to the
environment.
Additionally, the study’s findings support H2b, albeit
partially, MEC mediates the relationship between GI and
EP. This signifies that the firm’s top management pays spe-
cial attention to promoting green processes and products
to fulfill the firm’s environmental objectives. According to
our findings, H2a was recorded as a full mediation effect,
denoting that MEC fully mediates the relationship between
GEO and EP. This finding is at variance with the outcome
of past studies (Van Doorn etal. 2017), which argued that
GEO initiatives and top management focus on improving
managerial environmental concerns. In other words, when
GEO prioritizes environmental matters, top management
will stimulate to develop and leverage green practices to
drive EP. From the NRBV perspective, MEC facilitates
the GEO-GI relationship on EP and is mainly responsible
for reducing environmental pollution and supporting eco-
business practices. Thus, MEC is expected to leverage GEO
strategies to achieve superior EP (Makhloufi etal. 2021d).
Importantly, numerous studies (Engelen etal. 2014;
Hughes etal. 2018; Sciascia etal. 2014) have previously
used GAC as an intermediary construct (mediator/modera-
tor) to support environmental entrepreneurship and promote
eco-innovation practices’ response to environmental threats.
This study has introduced GAC as a mediator factor of GEO
and green innovation in seizing GEO eco-business opportu-
nities and fostering environmental performance (Patel 2019).
In this regard, the higher the influence of GAC in GEO strat-
egies (Sciascia etal. 2014) and eco-innovation practices
(Chen etal. 2014), the better, the greener practices (Zhang
etal. 2020) and ultimately the more the environmental eco-
business opportunities (Pacheco etal. 2018). To conclude,
GAC is a critical bridge that empowers GEO and GI to
exploit entrepreneurial opportunities. Also, GAC is explor-
ing and exploiting capabilities to reconfigure eco-business
Environmental Science and Pollution Research
1 3
processes and products to deliver eco-product, save energy
and ultimately reduce environmental impacts (Pacheco etal.
2018). Furthermore, we can find a solid theoretical justifica-
tion for MEC’s role in fostering environmental entrepreneur-
ship (Hart and Dowell 2011; Rehman etal. 2021b) and green
innovation (Tang etal. 2018). Most prior studies (Saudi
etal. 2019; Tang etal. 2018; Xue etal. 2019) have mainly
introduced MEC as an enabler of eco-innovation practices
while failing to establish its indirect impact on GEO. The
prominent role of MEC is to support GEO in improving
environmental activities, emphasizing external environmen-
tal opportunities, and responding to environmental threats.
This can be achieved when managers are engaged in GEO
initiatives.
Conclusion
The study, underpinned by the theories of NRBV and DCV,
empirically evidenced the necessity to combine GAC and
MEC to fulfill GEO and eco-innovation strategies and ulti-
mately enhance environmental performance. The study
extends the NRBV literature by emphasizing the key driv-
ers (e.g., GAC and MEC) of environmental entrepreneur-
ship and eco-innovation to achieve superior environmental
performance. The present study findings align with the argu-
ments of NRBV and DCV. Concerning the NRBV theory,
this study is the first empirical attempt that responds to the
external natural environment conditions by considering the
triple environmental pillars: (a) pollution issues, (b) envi-
ronmental products, and (c) sustainable development. These
triple pillars are the core focus of corporate environmen-
tal entrepreneurship, GI and EP. This study linked these
three pillars (GEO, GI, and EP) in a single model to test the
NRBV theory and identifies the strategic role of firms’ GAC
in supporting GEO and eco-innovation practices to address
environmental concerns. Aside from that, this might also
encourage entrepreneurs to capture eco-opportunities. This
study aimed to combine and estimate GEO’s green strategic
behavior in maintaining EP.
The study aims to contribute to understanding eco-busi-
ness strategies responding to external environmental chal-
lenges. It seeks to examine links between GEO GI and GAC
toward better environmental performance. It also provides
evidence of the importance of acquiring new knowledge,
upgrading eco-practices, and deploying green management.
This research is essential for developing entrepreneurs’ eco-
mindset, managers’ green behavior, human resource green
practices, and firms’ green culture. This study offers valu-
able insights into the conditions that should be afforded and
deployed for firms’ GAC to level up GEO strategies and eco-
innovation practices towards better competitive advantages
and environmental performance.
Furthermore, this study also highlights the vital role of
MEC in addressing the core focus of green entrepreneur-
ship and eco-innovation. MEC proactively leveraged green
practices to reduce environmental performance and improve
entrepreneurs’ eco-business opportunities capability. Moreo-
ver, the study shows solid evidence of the need to align GAC
and MEC with entrepreneurs’ green initiatives and firms’
environmental concerns to drive sustainable environmental
entrepreneurship.
This research extends past studies (Makhloufi etal. 2020;
Meirun etal. 2020; Saudi etal. 2019; Tang etal. 2018; Xue
etal. 2019) by introducing MEC as the strategic platforms to
drive GEO and firms’ eco-innovation strategies to enhance
EP. MEC strategically focused on exploiting those activi-
ties that contribute to pollution, thus helping GEO and eco-
innovation reduce all associated environmental impacts. The
NRBV advocates that firms should respond to the external
natural environment. In this regard, managers must acquire
eco-practices and skills in addressing environmental con-
cerns. Moreover, these results clarified the crucial role of
managers in tackling environmental issues by incorporat-
ing these issues into eco-business strategies. In other words,
managers possessing environmental awareness with suffi-
cient green knowledge are more involved in environmental
activities as they integrate their tasks, efforts, and skills to
enhance eco-practices and ecological performance.
The implication forpractice andenvironmental
policy
Dynamic capability theory argues that GAC is a crucial
pillar upon which GEO and eco-innovation stand to level
up firms’ capability to transform and enhance green organi-
zational culture toward better environmental management
(Xue etal. 2019; Zhang etal. 2020). The GAC promotes the
development of a GEO mindset to understand environmental
changes (Engelen etal. 2014) and supports firms in upgrad-
ing their eco-business processes and products to address
environmental concerns (Pacheco etal. 2018; Zhang etal.
2020). With the significant influence of GAC on GEO and
GI, firms will also deliver eco-friendly products, advance
eco-processes, enhance eco-system performance and extend
eco-business growth. This study found that GAC indirectly
polishes the influence of GEO and GI on EP, which means
that GAC supports the role of GEO and eco-innovation in
environmental sustainability. GAC successfully helps entre-
preneurs track eco-opportunities and tackle environmental
problems, thus aiding firms to achieve superior environmen-
tal performance.
The NRBV suggests that firms adopting three distinct
environmental strategies can maintain competitive advan-
tages (Hart 1995; Hart and Dowell 2011). These advantages
can be attained when GEO and eco-innovation are adopted
Environmental Science and Pollution Research
1 3
to foster activities that respond to external environmental
challenges (Rehman etal. 2021b). GAC and MEC aim to
tackle environmental problems and upgrade eco-innovation
capabilities, and this can also stimulate entrepreneurs to
explore eco-business opportunities and reduce ecological
degradation.
This research focuses on three major concepts: green
entrepreneurship orientation, green innovation, and envi-
ronmental performance in the presence of green absorptive
capacity and managerial environmental concerns. Environ-
mental performance is the ultimate focus of the study. It is
viewed as one of the emerging issues in the modern world
owing to its association with increasing global warming and
climate change. Due to the rapidly growing environmental,
governmental, and institutional pressures, firms’ green stra-
tegic decision-making has been influenced to consider eco-
business strategies. This includes the deployment of GEO,
such as green engineering, ISO 14001, green chemistry, and
advanced technologies to reduce environmental problems. In
addition, the GEO mainly aims to leverage eco-practices and
promote employees’ green behavior, processes, and leader-
ship to improve environmental performance. To conclude,
GEO represents a primary channel for tackling environmen-
tal pollution and a core driver of ecosystem sustainability
and business performance.
Recent empirical studies (Aboelmaged and Hashem
2019; Gast etal. 2017; Piwowar-Sulej etal. 2021; Takalo
and Tooranloo 2021; Trapp and Kanbach 2021) have focused
on different relationships between green entrepreneurship,
green innovation, and environmental performance but failed
to explore the effect of each other and how to complement
one to another in a single model, and in the existing of both
absorptive capacity and managerial environmental concern
to facilitate these interrelationships in the light of environ-
mental degradation. Therefore, this study extends the scope
of GEO, GI, and EP by examining the role of GAC and
MEC in tackling environmental problems that might have
resulted from poor entrepreneurs’ green mindsets. In addi-
tion, the study advances the NRBV lens scope by empha-
sizing questions regarding pollution and environmental
degradation from an entrepreneurship and eco-innovation
point of view. The study of Takalo and Tooranloo (2021)
shows that mathematical modeling has had the most meth-
odological approach applied. This present research covers
the methodological gap that emerged in innovation manage-
ment literature.
Moreover, this research responds to the call by Piwowar-
Sulej etal. (2021) to examine environmental entrepreneur-
ship and the driving factors to solve environmental sustain-
ability. This study advances past systematic review studies
(Gast etal. 2017). It provides crucial empirical evidence
highlighting the importance of conducting business in a
greener approach or sustainability-related entrepreneurship
to level up entrepreneurs’ green mindset, employees’ green
behavior, and environmental performance.
Furthermore, the study extends and supports past research
findings Úbeda-García etal. (2022) by focusing on the
importance of integrating managerial green behavior pro-
grams into green practices to polish external environment.
A study by Qiu etal. (2020) found that green innovation
improves green dynamic capability and achieves competi-
tive advantage. Since the study has seen GEO as a green
dynamic capability, thus, this research highly supports and
extends past study findings to ensure the crucial role of GEO
as a green strategic solution to foster environmental per-
formance. Moreover, authors Shafique etal. (2021) argued
and found that the increasing environmental pressures can
be reduced through leveraging green exploration and green
exploitation innovation. Additionally, the study indicated
that GEO plays a strategic role in minimizing pressures
derived by governmental and institutional environment.
Another study by Yu etal. (2022) examined and argued that
SMEs green innovation capabilities are less focusing on
social and ecosystem responsibility rather than large firms
due to the power of acquiring and using green capabilities
and resources. Overall, this study provides a significant plat-
form to advance research on environmental and sustainabil-
ity core focus as evidenced by previous studies linking green
innovation and green entrepreneurship in different perspec-
tives measured by variety of constructs to estimate SMEs
and large firms to ecosystem responsibility.
The present study findings offer practical implications to
advance eco-business strategies from three points of view,
namely ethical (social responsibility), ecological (pollution),
and economic perspectives. From an economic perspective,
the research findings encourage firms to leverage eco-busi-
ness based on three primary practices, i.e., (1) green prod-
ucts, (2) green processes, and (3) green management. By
adopting these eco-business strategies, firms are expected
to save energy, improve agriculture, minimize soil pollu-
tion, and reduce carbon emissions. Developing eco-products
requires green strategies, which are necessary to foster green
entrepreneurs’ image, customer environmental awareness,
and firms’ green brand value. Another environmental busi-
ness strategy that aims to tackle pollution-related activities
is eco-innovation processes. Improvement of eco-innova-
tion processes can promote energy conservation, reduce
hazardous waste, prevent air and soil pollution, increase
resource efficiency, and impede further natural degrada-
tion. By leveling up eco-processes innovation, problems
of climate change and ecological sustainability (decay) can
be addressed. The third eco-business strategy practice is
eco-innovation management which refers to the firm GEO
towards development environmental policies, such as “cor-
porate social responsibility, environmental management
systems, risk management approach, and product life cycle
Environmental Science and Pollution Research
1 3
management.” These prestigious policies can support firms’
eco-business strategies to prevent pollution of three funda-
mental elements: water, air, and soil. Globally, China is the
biggest contributor to global warming and climate change.
Hence, this research provides essential global implications,
particularly for Chinese policymakers and other factories
worldwide, to develop, deploy and incorporate eco-policies
and eco-practices within their eco-business strategies to pro-
tect, conserve and sustain the ecosystem.
The novelty ofthestudy andtheoretical
implications
This is the first study to empirically respond to the NRBV
arguments by incorporating four significant factors (GEO,
GI, GAC, and MEC) driving the three vital environmental
strategies suggested by the NRBV in a single model. The
DCT advocates that GAC is the core driver of GEO’s pro-
active eco-strategy to guarantee the equilibrium of environ-
mental restrictions and eco-business growth in an uncertain
business environment (Teece 2016). In contrast, GEO’s
primary objective is to enhance EP while continuously
tracking ecofriendly opportunities (Jiang etal. 2018). The
study has seen GEO and GAC as a dynamic green strategy
helping firms to sustain the external natural environment.
This research extends the DCV theory by incorporating
the NRBV viewpoint to explain the importance of green
entrepreneurship, eco-innovation, and ecosystem perfor-
mance. Besides, this research advances the NRBV theory
by testing it in entrepreneurship studies. This study empha-
sizes the strategic impact of managerial environmental con-
cerns in promoting green practices and EP. In addition, this
study developed and tested the first theoretical model that
addresses three distinct drivers of environmental strategies
in a single model. In doing so, the study’s findings support
the NRBV and extend the theory of DCT by demonstrating
the crucial role of the interrelationships highlighted in the
research model.
Practical implications
Firms looking to keep and develop green competitive
advantages tend to receive more pressure from individuals,
markets, and governments. Therefore, the present research
findings offer several practical implications for these firms
to respond to environmental concerns. To promote envi-
ronmental performance, firms need to adopt GEO and GI.
Environmental managers need to leverage environmental
strategies that fulfill three key eco-business strategies: the
reduction of pollution, product stewardship, and sustain-
able development. Furthermore, to track market eco-oppor-
tunities, firms should pay more attention to environmental
problems, as suggested by the NRBV. Firms’ GEO can track
eco-friendly opportunities enabled by GAC, a process that
bridges the existing knowledge and skills gap between GEO
and the pressures of the external environment. Moreover,
environmental awareness of managers increases their sup-
port for GEO towards achieving superior entrepreneurial
eco-opportunities.
This research informs practitioners of the need to improve
eco-business practices such as eco-processes, eco-products,
and green culture. By leveraging these eco-practices, GEO
can fulfill markets’ eco-friendly products and enhance eco-
system performance. Furthermore, practitioners are encour-
aged to upgrade their green practices from management-
based to pro-sustainable development. GAC is one of the
leading green strategic solutions that help GEO to achieve
green business growth and better environmental perfor-
mance. MEC is the process of facilitating and promoting
GEO to deliver eco-products and protect the external envi-
ronment. Besides, MEC assists firms’ green innovation to
tackle all problems related to the environment.
Future research directions
This study addressed one industry (e.g., petrochemical) in
China, considered the leading contributor to pollution. Sub-
sequent analysis can expand the sampling to include other
sectors to generalize the research findings. Furthermore, this
study suggests that longitudinal research can generate use-
ful findings since tracking GEO, GI, and EP’s development
is desirable over time. Besides, by conducting a longitu-
dinal study, the findings are expected to provide substan-
tial evidence about the relevance of the NRBV and green
dynamic capabilities development point of view. Moreover,
it is advised to deeply examine other potential individual,
organizational, and institutional factors that can promote
GEO, GI, and EP.
Further studies can benefit from examining the role
of GEO and GAC in tackling COVID-19 environmental
impacts. This study assumed that green knowledge and GEO
are critical driving forces for employees’ green behavior
responding to COVID-19. Also, investigating COVID-19
environmental impacts from the perspective of NRBV could
extend GEO, GI, and GAC literature.
Author contribution Conceptualization: Lahcene Makhloufi; For-
mal analysis: Lahcene Makhloufi and Jing Zhou; Investigation: Jing
Zhou and Abu Bakkar Siddik; Methodology: Lahcene Makhloufi and
Jing Zhou; Project administration: Lahcene Makhloufi; Resources:
Jing Zhou and Abu Bakkar Siddik; Software: Lahcene Makhloufi and
Abu Bakkar Siddik; Supervision: Lahcene Makhloufi; Validation:
Lahcene Makhloufi, Abu Bakkar Siddik and Jing Zhou; Visualization:
Abu Bakkar Siddik and Jing Zhou; Writing—original draft: Lahcene
Makhloufi; Writing—review & editing: Lahcene Makhloufi and Abu
Bakkar Siddik.
Environmental Science and Pollution Research
1 3
Data availability The datasets generated and analyzed during the cur-
rent study are not publicly available because they constitute an excerpt
of research in progress but are available from the corresponding author
upon reasonable request.
Declarations
Competing interests The authors declare no competing interests.
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