Do Environmental Strategy and Awareness Improve Firms’ Environmental and Financial Performance? The Role of Competitive Advantage

Drawing upon the natural-resource-based view (NRBV), this study assesses the role of environmental strategy (ENS) and environmental awareness (ENA) in enhancing firms’ environmental and financial performance. Additionally, we hypothesize a mediating role of firms’ competitive advantage among these a...

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Bibliographic Details
Published in:Sustainability 2022-09, Vol.14 (17), p.10600
Main Authors: Tan, Kang, Siddik, Abu Bakkar, Sobhani, Farid Ahammad, Hamayun, Muhammad, Masukujjaman, Mohammad
Format: Article
Language:English
Subjects:
Business competition
Climate change
Competition
Competitive advantage
Economic growth
Emissions
Environmental aspects
Environmental auditing
Environmental awareness
Environmental conditions
Environmental management
Environmental protection
Environmental sustainability
GDP
Gross Domestic Product
Managers
Manufacturing
Multivariate statistical analysis
Natural resources
Small & medium sized enterprises-SME
Small and medium sized companies
Small business
Strategy
Surveys
Sustainability
Sustainable development
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Summary:Drawing upon the natural-resource-based view (NRBV), this study assesses the role of environmental strategy (ENS) and environmental awareness (ENA) in enhancing firms’ environmental and financial performance. Additionally, we hypothesize a mediating role of firms’ competitive advantage among these associations. We analyze several hypothesized relationships using survey data from 240 Bangladeshi manufacturing SMEs. The partial least squares structural equation modeling (PLS-SEM) findings suggest that environmental strategy strongly affects organizational competitive advantage and environmental performance. We also observe that environmental awareness substantially affects competitive advantage and environmental and financial performance. Finally, our statistical findings reveal that competitive advantage mediates the linkage between ENS and ENP as well as ENA and ENP. However, ENS was found to have an insignificant effect on firms’ financial performance. These crucial findings extend the NRBV, ENS, and ENA literature. Our research provides managers of manufacturing organizations and policymakers with a valuable model for managing environmental strategy and environmental awareness to enhance environmental and financial performance. It may assist manufacturing SME managers in strengthening their internal resources, such as ENS and ENA, to improve their competitive advantage and organizational outcomes.
ISSN:2071-1050
2071-1050
DOI:10.3390/su141710600