Green process innovation and financial performance in small and medium-sized enterprises in a developing country : role of resource orchestration

Abstract

While existing resource-based theorizations consider green process innovation as an important internal firm resource, this research utilizes the resource orchestration logic to argue that a greater capability to manage and deploy green process innovation is a major contributor to financial performance of small and medium-sized enterprises (SMEs). The study posits that conditions of high green value co-creation, supported by a robust customer-driven green strategy, enable SMEs to orchestrate green process innovation to improve financial performance. The study tests these arguments on primary data from 224 manufacturing SMEs in a developing country in Sub-Saharan Africa – Ghana. The results support the study’s theorizations. However, the study also finds that high green value co-creation, when supported with less emphasis on customer-driven green strategy, amplifies the financial benefits SMEs generate from green process innovation. These findings offer new insights into the resource orchestration conditions under which investments in green process innovation pay off.