Green Process Innovation and Financial Performance; The Moderating Role of Green Social Capital and Customers’ Tacit Green Needs

Today, with increasing environmental concerns, green process innovation is recognized as a vital strategy to improve the financial performance of companies. However, it is not clear how firms use resources at different levels of green process innovation. Therefore, in this research, the impact of different levels of green process innovation on financial performance with the moderating role of green social capital and implicit green needs of customers is investigated.

This research has a quantitative and descriptive survey approach. The research tool included a questionnaire whose validity and reliability were confirmed. The statistical population of the research was 432 companies of all Iranian stock exchange companies subject to the environmental guidelines. Due to the possibility of low participation rate, questionnaires were sent to these companies by census method, and finally 172 questionnaires were returned. Research data were analyzed using SPSS 26, SmartPLS 3, and Lisrel software.

Green process innovation has a positive effect on financial performance in companies with a higher than average level and has a negative effect on financial performance in companies with a lower than average level. Also, variables of green social capital and implicit green needs moderate the relationship between green process innovation and financial performance.

Applying green process innovation does not always create higher financial performance, but only a high level of green process innovation can increase financial performance