Knowledge Integration, Green Innovation and Financial Performance: A Mediating Model

Developing green products and improving green production processes are important in increasing environmental performance and sustainability. The sophisticated processes involved in green innovations is a learning curve and a complex journey that many companies engaged in green operations must navigate. In this study we establish a mediating framework, arguing that a green company’s internal and external knowledge process integration enhance its environmental performance through green innovations. Drawing on the theories of organizational learning and dynamic capabilities, our empirical analysis of 231 firms based in China suggests that the impact a firm’s knowledge process integration on environmental performance is mediated through its green product innovation and green process innovation. This study contributes to the much-needed efforts in finding ways to improve green innovations and financial performance, and provides helpful managerial implications to practitioners on how to successfully manage resources to improve green innovations and achieve expected benefits.