s11356 022 22424 y
s11356 022 22424 y
https://doi.org/10.1007/s11356-022-22424-y
RESEARCH ARTICLE
Received: 30 December 2021 / Accepted: 2 August 2022 / Published online: 8 August 2022
© The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature 2022
Abstract
This study aims to evaluate the environmental performance of small and medium-sized enterprises (SMEs) through green
human resource management (GHRM), green transformational leadership (GTFL), and green innovation (GI). This study is
based on resource-based view theory and ability-motivation-opportunity theory. We collected data from 315 manufacturing
small and medium-sized enterprises using a survey questionnaire. We applied structural equation modeling using Smart
partial least squares to analyze the collected data. Results of the study indicate that green ability and green motivation have
a significant impact on environmental performance and green innovation mediates the relationship between GHRM practices
and environmental performance. Findings also revealed that green transformational leadership’s moderation strengthens the
relationship between green ability and green innovation, but surprisingly weakens the relationship between green motivation,
green opportunity, and green innovation. The paper provides a valuable understanding and novel approach for directors of
SMEs in developing countries to improve their environmental performance through GHRM and green innovation.
Keywords GHRM · Green innovation · Green transformational leadership · Environmental performance · Smart PLS ·
SEM
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in terms of the way employees relate and influence each (2008) asserted that environmental performance is a must
other (Al-Ghazali and Afsar 2021). for innovation; however, Jackson and Seo (2010) argued that
Green innovation is made up of process and product human resource management (HRM) must be involved in
innovation. It entails enhancing the design of a product and the achievement of environmental performance. Sustainable
taking up industrial processes that are pollution-reducing, performance is evaluated in conjunction with environmental
sensitive to a company’s pollution level to its surroundings, performance to assess sustainability effectively. An organi-
and energy-saving (Asadi et al. 2020). The literature review zation’s environmental performance, on the other hand, is
reveals a developing emphasis on green innovation and measured by its ability to reduce air emissions and effluent
related concepts such as eco-innovation, sustainable inno- waste, reduce consumption of hazardous and toxic products,
vation, and environmental innovation (Zhang et al. 2020). and reduce the frequency of environmental accidents. Envi-
According to scholars, management affects how green inno- ronmental performance is defined in this study as the real
vation can enhance green performance. But there is no clar- influence on an organization’s environmental performance
ity on the effects of green innovation on green performance. that GHRM practices and green innovation have. Thus, this
A lot of current literature is on green process innovation, study draws on recent research into the relationship between
green product innovation, or generalized green innovation GHRM practices, green innovation, and environmental
without defining green product and process innovation. performance that is supported by the resource-based view
Therefore, there is a need for more studies on this topic (RBV) theory (Barney 2001) and the AMO theory (Appel-
(Arici and Uysal 2021; Ke et al. 2021; Takalo and Tooranloo baum et al. 2000). Obstacles to the successful execution of
2021; Wang et al. 2020a, b, 2021; Wang et al. 2022). green innovation can be overcome if the RBV of human
According to this study, a firm’s top management must resource management and environmental management work
adopt GHRM and green transformational leadership prac- together (Sarkis et al. 2010). Following is a detailed descrip-
tices to build sustainable internal competencies essential to tion of both theories and hypothesis development.
green innovation to attain environmental performance. We
aim to answer two crucial research questions: (a) How does Theoretical background
GHRM influence the firm’s environmental performance?
(b) Is green innovation crucial to the use and implementa- Ability‑motivation‑opportunity (AMO) theory
tion of human resource management practices in a firm’s
environmental performance? Our study has used both the AMO (ability-motivation-opportunity) theory suggests that
ability motivation opportunity (AMO) theory and resource- stirring employees’ engagement, providing excellent oppor-
based view (RBV) to demystify the role played by GHRM tunities that support employee involvement, and developing
in assisting organizations in capitalizing on green innovation a firm’s ability are crucial to enhancing employee perfor-
to enhance their environmental performance. mance (Appelbaum et al. 2000). Therefore, GHRM improves
The outcomes of this study make important contributions to green performance in a firm and among its employees by
the literature on GHRM and environmental performance and providing green training, recruiting employees well-versed
the managers of small and medium-sized enterprises (SMEs). with environmental sustainability, encouraging employee
First of all, our research contributes to a better understanding participation in green activities, and promoting employee
of both the RBV and AMO theories in SMEs on how GHRM involvement in green activities through creating green per-
practices and green innovation establish core competence formance alongside reward systems (Jabbour and de Sousa
for sustainable environmental performance in the context Jabbour 2016). Prior studies on how GHRM affects the EP
of SMEs. Human resources in an organization can be better of an organization have determined that GHRM attributes
understood, predicted, and controlled by using the RBV as significantly improve the EP of an organization. Neverthe-
a model. Secondly, it was found that GHRM has an impact less, GHRM alone cannot give companies a green compet-
on green process and product innovation in both direct and itive advantage (Kim et al. 2019). The relations of other
indirect ways. Thirdly, we provide empirical evidence for the organizational settings may contribute to the advancement
necessity of GHRM practices for green innovation and envi- of employees’ opportunities, motivation, and abilities for
ronmental performance in small and medium-sized businesses. green performance (Paillé et al. 2020; Tang et al. 2018).
As firms attempt to reduce environmental pollution along-
side dealing with the issue of increasing demands resulting
Literature review from the green stakeholders, more attention goes into green
innovation, which entails tasks associated with the develop-
Business operations, human resource management, and ment of manufacturing processes and innovative products
innovation have grown increasingly dependent on an organi- geared toward minimizing environmental impact. This green
zation’s environmental performance. Vachon and Klassen innovation’s concept continues to become popular now that
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threats of environmental deterioration and global warming significant waste and cost savings. We predict, using AMO
create significant global issues (Yong et al. 2019). (Appelbaum et al. 2000), that green process and product
innovation will mitigate the effect of GHRM on EP.
Hypothesis development Employee involvement (EI) is a critical component of
the strategy of providing green personnel with opportuni-
GHRM and environmental performance ties. According to Cha et al. (2019), EI in environmental
management (EM) should be extended to lower-level people
GHRM encourages employees to be environmentally con- because this is regarded as a crucial stage in the EP process.
scious, innovative, and productive in their work environ- Many EM activities are fueled by EI initiatives (Kitazawa
ments. According to Rizvi and Garg (2021), environmental and Sarkis 2000). Some processes underpin EM’s environ-
management strategies have been connected to more signifi- mental performance: first and foremost, personnel get a tacit
cant environmental innovation and business performance. understanding of operational procedures through exposure
However, further research is needed to confirm these find- to EM (Boiral 2002); second, environmental management
ings, as firms are increasingly compelled to improve their (EM) encourages employees to come up with new ways to
environmental management practices by stakeholders such improve environmental performance; and third, EM estab-
as investors and customers. To ensure that recruits are aware lishes an environment that fosters EM (Boiral 2002). After
of and committed to the company’s environmentally friendly conducting a study of significant polluters in Belgium, it has
guiding principles and values, current research recommends been discovered that there is a relationship between green
that companies should choose human resources based on leadership and green employee decisions, as measured by
their environmental views, beliefs, and experience, using the amount of environmental taxes paid (Buysse and Ver-
a green recruitment and selection technique (Hameed et al. beke 2003). Hence, we proposed the following hypotheses:
2021; Yong et al. 2019). Several GHRM initiatives can
improve environmental performance, including green train- H1: Employee’s green ability significantly relates to EP
ing, green performance management, and green incentives H2: Employee’s green motivation significantly relates to
and pay among employees (Ren et al. 2018). Mousa and EP
Othman (2020) depicted that raining and development pro- H3: Employee’s green opportunity significantly relates
grams that focus on developing employees’ competence in to EP
recycling, waste management, and energy efficiency in the
workplace all contribute to improving environmental perfor- Relationship between GHRM and GI
mance, as does integrate eco-friendly goals, responsibilities,
and evaluation into the performance management system It may be challenging to handle environmental concerns
(PMS). with environmental management solutions without consid-
Prior research has related human resource manage- ering the culture of green innovation within the organization.
ment bundles or systems to innovation. Our premise is that As a result, the environmental performance is expressed as
human resource management packages and procedures have a decimal (Renwick et al. 2013). Employees are increas-
an impact on administrative, process, and product innova- ingly concerned about the environment, and they want their
tion, even in startups with little human capital, where HRM businesses to include environmental issues in the form of
systems significantly encourage innovation (Long et al. corporate social responsibility.
2020; Naseem et al. 2020; Paillé et al. 2020; Zaid et al. The environmental culture is influenced by the firm’s
2018). HRM practices much outperform organizational policy and strategy for dealing with environmental issues.
processes and systems when it comes to employee commit- For this purpose, it was hypothesized that no significant pro-
ment. Haddock-Millar et al. (2016) suggested that human gress could be accomplished until the company’s employees
resource management practices focused on dedication and supported it, independent of the firm’s commitment to envi-
collaboration have a differential impact on firm innovation; ronmental policy and practices. Suppose a firm’s employees
the first focuses on enhancing an organization’s internal lack the requisite green competencies and capacities. In that
innovative capacity, while the latter promotes creativity by case, the company will not be able to become environmen-
creating social networks that draw on outside resources. On tally friendly (Jabbour and de Sousa Jabbour 2016). Previous
the other hand, the firm leverages green innovation as a stra- studies discovered that GHRM and green innovative cul-
tegic resource for environmental performance improvement ture should be creatively combined to accomplish signifi-
(Arici and Uysal 2021; Rehman et al. 2021). When a busi- cant progress in environmental sustainability (Jabbour and
ness implements green products and processes innovation, de Sousa Jabbour 2016; Mohsin et al. 2022). The following
it decreases its negative environmental effect. It improves its are examples of professional competencies: personal traits,
financial, social, and environmental performance due to the behaviors, abilities, knowledge, attitudes, self-reflection, and
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values and beliefs, to name a few. For these skills to flourish, products. Recently, the concept of green innovation has
GI provides a more stable setting for them to do so. emerged as a critical strategy for high-tech corporations
Green innovation entails creating environmentally seeking to become more ecologically conscious. There are
friendly processes and products by taking up organizational several reasons for this, including contemporary trends in
practices such as green raw materials, using fewer materi- environmental consciousness, pressure from regulatory
als in designing products from eco-design principles that authorities and environmentally conscious consumers, and
reduce emissions and minimize consumption of electricity, a great deal of EM discussion (Cai et al. 2015; Jamil et al.
water, and other related raw materials (Zhang et al. 2020). 2021). Today, green innovation is being utilized in research
Various previous studies argue that the most successful to inform organizations what they should do to be more
high-performing firms have great innovativeness. They use environmentally friendly while also remaining competitive
green capabilities and resources to meet customer needs and what they should avoid doing. This is referred to as
besides adding intangible assets and values to the firm (Gul “green innovation” by (Cai et al. 2015). It makes no dif-
et al. 2021; Rehman et al. 2021). Many past studies argue ference whether the outcome was predicted or not. This is
that HRM significantly and positively affects product and what the term “green innovation” refers to. Firms should
technological innovation. Human resource practices that step up their drive for sustainability by adhering to interna-
focus on enhancing commitment instead of compliance tional environmental norms and implementing new technical
enjoy excellent innovative orientation (Shah 2019; Siyam- developments to encourage green innovation. According to
balapitiya et al. 2018). Besides, human resource manage- the findings (2021), green innovation significantly affected
ment positively affects product improvement in a firm with a the organization’s overall green performance. According to a
flat structure and developmental culture. According to Seeck survey conducted by Saunila (2017), sustainability and green
and Diehl (2017), HRM lacks a substantial impact on the innovation are intertwined. According to Cai et al. (2015),
process and administrative innovation, unlike technologi- internal resources (including human resources) and external
cal and product innovation. As a result, past studies have pressures can help a company become more environmentally
mixed findings regarding the interaction between innovation friendly. Green innovation is developing environmentally
and HRM in a firm. Concerning AMO, organizations that friendly products and procedures that alter the design of a
highly regard and utilize human talent tend to institutional- product so that it does not harm the environment at any point
ize GHRM practices to motivate, attract, and offer GHRM during its life cycle. Process innovation that is environmen-
opportunities to use the green product and process innova- tally sustainable is associated with lowering energy use,
tion. Hence, we proposed the following hypotheses: avoiding pollution, and recycling trash (Awan et al. 2022).
Green innovation enhances environmental performance,
H4: Employee’s green ability significantly relates to GI and it mainly entails the environmental management agenda
H5: Employee’s green motivation significantly relates to of a company (Wang et al. 2020a, b). Besides, green pro-
GI cesses and product innovation minimize the negative influ-
H6: Employee’s green opportunity significantly relates ence of the business on the environment alongside increas-
to GI ing the social and financial performance of a firm through
cost and waste reduction (Long et al. 2020). According to
Relationship between green innovation and environmental Ullah et al. (2021), green innovation should not be regarded
performance of SMEs as how the firm reacts to stakeholder pressures via proactive
organizational practices and intentions to enhance environ-
Environmental performances refer to a firm’s initiatives to mental performance to gain a competitive advantage. About
achieve and go beyond societal expectations, not limited to RBV, our study predicts that green products and process
compliance with laid down rules or regulations (Zameer innovation are crucial corporate resources used by firms to
et al. 2020). It includes the environmental impact of organi- earn goodwill among critical stakeholders and enhance envi-
zational products, processes, and resource utilization in a ronmental performance. Hence, we proposed the following
way that befits the legal requirements (Razzaq et al. 2021). hypothesis:
According to Tolliver et al. (2021), environmental perfor-
mance is influenced by green product and process innova- H7: GI positively influences EP
tion, integration of environmental sustainability in product
development and business procedures, and the quality of The mediating role of GI
environment-friendly products.
Green innovation, often known as eco-innovation, is con- GHRM enhances green firm performance, green crea-
cerned with conserving energy, preventing pollution, recy- tivity, and employees’ environmental awareness. Yusoff
cling waste, and creating more environmentally friendly et al. (2020) confirmed that GHRM affects green firm
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performance and innovation; however, these areas still H9: GI mediates the relationship between employee’s
need more research, especially if a company experiences green motivation and EP
high pressure from important stakeholders to participate H10: GI mediates the relationship between employee’s
in environmentally responsive management activities. green opportunity and EP
Besides, existing literature confirms that organizations
ought to hire employees based on their environmental The moderating role of GTL between GHRM and GI
knowledge, values, and beliefs through green selections
and recruitment system to have recruits who comprehend Transformational leaders have a clear vision of what the
and understand the firms’ environmental values and beliefs organization should do today and in the future (Avolio and
through considering potential employees’ environmental Bass 1995). Developing a fresh concept, having a strong
knowledge, values, and beliefs (Gilal et al. 2019; Kim belief in it, communicating it effectively to their staff, and
et al. 2019). It is also important to realize that performance ensuring that they believe in and are thrilled about it are all
management and appraisal, green rewards and compen- things that leaders should do (Mohsin et al. 2021). Accord-
sation, and green training and development are essential ing to Mohsin et al. (2021), transformational leadership
human resource management practices to maintain solid increases the motivation, trust, cohesion, commitment, and
environmental performance. Pham et al. (2020) suggested performance of the people who work with them by foster-
green training and development programs geared at evolv- ing a sense of belonging. Several studies have discovered
ing capable employee skills for waste management, energy that the intellectually inspired component of transforma-
efficiency, recycling, and green workplace analysis along- tional leadership is beneficial in performance management,
side institutionalizing eco-friendly responsibilities, objec- talent management, and overall staff productivity. GHRM,
tives, and performance management system (PMS) evalu- on the other hand, refers to practices that are environmen-
ation to promote environmental performance. tally friendly in comparison to traditional human resource
According to Paillé et al. (2020), HRM systems or management (HRM). GHRM assists the organization in
bundles impact innovation. Our study suggests that these obtaining, developing, and motivating green employee job
systems or bundles influence product, process, and admin- behavior at work (Dumont et al. 2017).
istrative innovation. Even startups with low human capi- Transformational leaders play a crucial role in inspiring
tal can capitalize on HRM systems to spur innovation. employees or people by igniting the desire to do further than
Besides, human resource management practices enhance expected (Li et al. 2020). These leaders instill the desired
employee commitment and compliance to the laid down behaviors in people by displaying exemplary support and
organizational systems and processes (Yu et al. 2020). guidance. Transformational leaders are crucial in in-role
According to Longoni et al. (2018), there is a differen- and extra-role outcomes and behaviors (Çop et al. 2021;
tial impact of collaboration and commitment-oriented Hameed et al. 2021). They inspire employees hence stimu-
human resource management practices on an organiza- lating energy in them. These leaders use an ideal strategy
tion whereby they drive innovation by creating and sus- that motivates employees to act accordingly by following
taining social networks alongside external sources and them. According to Kusi et al. (2021), transformational lead-
enhancing innovative internal ability. Green innovation ers positively influence green outcomes and behaviors. Rizvi
acts as a significant resource that impacts environmental and Garg (2021) suggested that a leader who focuses on a
performance; hence, a company can leverage it to achieve green persona or approach instills green behaviors and cul-
environmental management targets (Mandal and Pal 2021; ture into employees. Besides, green transformational leaders
Mousa and Othman 2020). Both green process and prod- spearhead the use of green practices geared toward achiev-
uct innovation minimize a company’s negative impact on ing green outcomes like promoting green innovation. As a
the environment. It enhances firm performance socially, result, our study suggests that green transformation leader-
environmentally, and financially by huge cost and waste ship might also assist in boosting the utilization of GHRM
reduction, saving resources, time, and money. So, based to enhance green innovation (Fig. 1).
on ability motivation opportunity theory (Appelbaum GTL personifies the ideas and values of the company’s
et al. 2000) and the resource-based view approach (Barney top management and substantially impacts the company’s
2001), we suggest that GHRM indirectly affects company GHRM. For firms to achieve green innovation and perfor-
environmental performance by facilitating green product mance, we hypothesize that GTFL in organizations will play
and process innovation. Hence, we proposed the following a critical role in the formulation of supportive GHRM poli-
hypotheses: cies and practices (Jia et al. 2018) that will assist firms in
delivering on their strategies and visions to achieve green
H8: GI mediates the relationship between an employee’s performance. That is to say that by focusing on individuals’
green ability and EP requirements, GTFL may be spurred to develop and execute
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GHRM practices that will keep their employees engaged and distributed 530 questionnaires to the higher management of
empowered. Therefore, we anticipate that GTFL will play a SMEs through personal visits in October 2021 and asked
more active role in promoting positive human resource man- them to complete questionnaires within a month. In Novem-
agement practices such as recruitment and selection, training ber 2021, we started the collection of questionnaires, and at
and development, performance appraisal and management, the end of November 2021, we received back 348 question-
and compensation and incentive systems. Using the AMO naires with a response rate of 65.6%. During the scrutiny of
theory, we argue that GTFL leverages GHRM to strengthen questionnaires, we found that in some questionnaires, some
employees’ capabilities and motivations, as well as to pro- items were blank and some were double ticked, and some
vide opportunities for environmental management-related questionnaires were incomplete. So, the vague and inap-
activities (Haddock-Millar et al. 2016) for green innovations propriate responses were excluded from the final sample,
and environmental performance. Hence, we proposed the and 315 accurate answers were available for final analysis.
following hypotheses: Now our final sample size is 315. We employed Armstrong
and Overton (1977) approach to determine perceived anti-
H11: GTL moderates the relationship between an employ- reaction bias. Independent sample and chi-square t tests
ee’s green ability and GI were conducted to analyze the initial 65 and the final 65
H12: GTL moderates the relationship between employ- respondents via demographic factors, i.e., age and gender.
ee’s green motivation and GI The findings revealed no significant variations between the
H13: GTL moderates the relationship between employ- two response classes (p > 0.05).
ee’s green opportunities and GI
Variable selection and description
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Green Ability is determined by a six-item adopted from Control variables: Firm characteristics of ownership
the study of Jose Chiappetta Jabbour (2011), and the sam- form, firm age, and firm size were used as control variables
ple item is “Hiring only those employees who possess to account for differences among firms that have potential
environmental values.” impacts on environmental performance. It is in line with
Green Motivation is evaluated by four items adapted from prior studies (Le and Lei 2019; Lei et al. 2021).
the study of Yong et al. (2019), and the sample item is
“Employee gets reward for acquiring specific environ-
mental competencies.” Profile of the respondents
Green Opportunities are measured by three items and
adopted from the study of Renwick et al. (2013), and the Table 1 presents the division of respondents as their demo-
sample item is “Using teamwork for resolving environ- graphic characteristics. Respondents are divided into three
mental issues.” categories, i.e., ownership, age, and size. Total number of
respondents were 315, and their division according to their
Mediating variable: Green Innovation (Green Product response is divided as following.
and Process innovation) was used as a single mediating
variable. The items of these constructs were adapted from
Zailani et al. (2015) study. Common method variance
1. Four items assess green product innovation: “My com- Common method variance (CMV) bias is a significant con-
pany uses materials that produce the least pollution, con- cern in a survey sample. To assess the common method vari-
sume less energy and resources, environment-friendly ance (CMV) in this study, “Harman’s single-factor test” was
design products, and are easy to recycle, reuse, and employed (Podsakoff et al. 2003). As proposed by Harman
decompose.” (1976), a single-factor test was developed to evaluate the
2. Three items assess green process innovation. The items, presence of CMV among constructs. The findings indicated
“My company’s manufacturing processes effectively that all sample items were categorized into 31 unique fac-
reduce hazardous substance or waste, consumption of tors, with the first factor accounting for 29.189% of the total
coal, oil, electricity or water, use of raw materials.” variance, less than the suggested threshold of 50% (Appen-
dix Table 8). Furthermore, we utilized Smart partial least
Moderating variable: Green Transformational Leadership squares (Smart-PLS) to execute a full collinearity assess-
was investigated as a moderating variable, and the items ment test. According to Kock (2015) and many other social
were adapted from the study of Chen et al. (2014). Three science academics, this is a reasonably efficient and precise
items assess the construct of green transformational leader- strategy. All VIF values are less than the suggested threshold
ship, and the sample item is “I provide subordinates a clear of 5, indicating that typical process bias is not an issue in our
environmental vision.” model (Usman Shehzad et al. 2022).
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In this study, the Smart PLS 3.2.9 software package was The PLS algorithm with default settings in the Smart PLS
employed to assess the survey data (Henseler et al. 2009). 3.2.9 software is used to estimate the measurement model for
PLS-SEM analysis is performed in two stages: first, the this study, along with a path weighting function, a limit of
measurement model is evaluated, and then the structural 300 iterations, a stop set of criteria of 0.0000001(1 × 10–7),
model is tested (Ringle et al. 2020). According to the meas- and similar indicator weights for the setup (Lohmöller 1989;
urement model requirement, only constructs with adequate Wilson 2010). It is critical to establish a stable estimate by
indicator loading, convergent validity, composite reliabil- ensuring that the algorithm converges (i.e., meets the stop
ity (CR), and discriminant validity will be employed in the criterion) and does not exceed the convergence rate. In this
structural model. The structural model assessment evalu- scenario, the PLS method converges after eight iterations
ates route coefficients and verifies their magnitude using the (rather than 300), indicating the correct estimate. Figure 2
bootstrapping approach. Preacher and Hayes (2008) strategy depicts the PLS path model in graphic form, complete with
was followed for mediation analysis since it is the most care- loadings and weights. In reflective measurement models, the
ful way to test mediating effects and is more suited for using values on the path interactions indicate the loadings, while
the PLS-SEM technique (Hair Jr et al. 2014; Hayes 2009). in formative measurement models, the values on the path
relationships provide the weights.
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Table 2 provides the results of the measurement reli- 0.711, indicating that the variables are convergent. Conse-
ability, which show that outer loading ranges from 0.725 quently, the findings show that all reflective measurement
to 0.891 and that all the indicators exhibit a sufficient level models satisfy the necessary evaluation requirements.
of reliability. In addition, Cronbach’s alpha scores of Envi- Discriminant validity relates to how one construct dif-
ronmental Performance (0.804), Green Ability (0.840), fers statistically from another construct. Several decades
Green Motivation (0.860), Green Opportunity (0.719), earlier, discriminant validity was quantified using Fornell
Green Process Innovation (0.796), Green Product Innova- and Larcker (1981) traditional criteria. This approach is
tion (0.855), and Green Transformational Leadership (0.798) no longer used; thus, researchers created a new method
are above 0.60. Furthermore, the results of first-order reflec- for calculating discriminant validity called heterotrait-
tive measurement models indicate strong internal consist- monotrait (HTMT) (Henseler et al. 2015). Furthermore,
ency reliability of the instrument because of Environmental Henseler et al. (2015) claimed that HTMT is viable when
Performance (0.871), Green Ability (0.893), Green Moti- a modest loading difference exists. HTMT is 0.90 for LVs
vation (0.905), Green Opportunity (0.840), Green Process with the same idea and 0.85 for LVs with distinct con-
Innovation (0.881), Green Product Innovation (0.902), and cepts. Table 3 shows that all LVs have values less than
Green Transformational Leadership (0.861) have relatively 0.85 in the first order, indicating that the discriminant
high CR scores. Finally, the AVE values vary from 0.628 to validity condition has been met.
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Table 3 Heterotrait-monotrait 1 2 3 4 5 6 7
ratio (HTMT)
Environmental Performance
Green Ability 0.547
Green Motivation 0.658 0.533
Green Opportunity 0.539 0.596 0.598
Green Process Innovation 0.642 0.404 0.621 0.581
Green Product Innovation 0.634 0.546 0.747 0.632 0.492
Green Transformational Leadership 0.147 0.186 0.058 0.172 0.141 0.110
Table 4 Construct validity Second-order construct First-order construct Outer weight VIF t statistics
of second order-formative
constructs Green Innovation Green Process Innovation 0.476 1.483 17.47
Green Product Innovation 0.705 1.933 23.46
Table 5 Coefficient of determination and predictive relevance (2014) and Ringle et al. (2020). However, specific rec-
Endogenous constructs R 2
Q 2 ommendations from Nitzl et al. (2016) and Preacher and
Hayes (2008) were considered for mediation analysis.
Environmental Performance 0.454 0.267 The first stage assessed the structural model’s coef-
Green Innovation 0.592 0.393 ficient of determination (R2) for predictive accuracy and
cross-validated redundancy index (Q2) for predictive rel-
evance. R2 values of 0.454 for ENP and 0.592 for green
There is no evidence of multi collinearity in the forma- innovation are shown in Fig. 2 and Table 6, indicating that
tive construct of green innovation since the VIF scores all exogenous constructs explained 45.4% and 59.2% of
for Green product innovation (1.933) and Green Process the variation in the relevant constructs, respectively. R 2
innovation (1.483) fall considerably below the thresh- values for ENP and green innovation are also significant.
old value of 5.0. The bootstrapping approach evaluates Similarly, we used a blindfolding technique to create Q2
the significance of indicator weight (5000 subsamples, values for each endogenous construct provided by Hair
BCa, one-tailed testing at 0.05 significance level) and et al. (2014). In Table 4, the construct Q2 values for ENP
provides the 95% BCa confidence intervals, as shown and green innovation are 0.267 and 0.392, respectively.
in Table 4. The results show that the indicator weights These Q2 values, larger than zero, illustrate the structural
are sizable, significant, and with the correct sign for a path model’s predictive relevance. Additionally, all VIF
formative construct coefficient: Green Process innova- values significantly less than five imply that the structural
tion → GI (β = 0.476, t = 17.471, one-tailed p < 0.001), model fits well (Memon et al. 2019).
Green Product innovation → Green innovation (β = 0.705, Next, we analyzed the structural model’s path coef-
t = 23.469, one-tailed p < 0.001). Therefore, both first- ficients and their significance level in the next phase.
order constructs contribute to their respective second- Following the recommendations of Ringle et al. (2020),
order constructs in the PLS path model. The reflective a bootstrapping approach (5000 subsamples) was used to
and formative measurement model’s assessment results generate t values and p values to evaluate the significance
suggest that all construct measures exhibit satisfactory level of the proposed hypotheses. Figure 2 and Table 6
levels of reliability and validity (Table 5). portray path coefficients/direct effects, indirect effects,
and total effects and their significance level. H1, H2,
Structural model and H3 proposed that GAB, green motivation, and GOP
positively affect ENP. The results reflected in Table 6 and
Once the measurement model is confirmed, the struc- Fig. 2 indicate that GAB (β = 5 0.86, t = 5 38.55, p < 0.01)
tural model assessment is the next step in the PLS-SEM and GM (β = 5 0.86, t = 5 38.55, p < 0.01) have significant
approach. The evaluation of the structural path model positive effect on ENP, whereas GOP (β = 5 0.86, t = 5
entails determining the model’s prediction power and 38.55, p < 0.01) has insignificant association with ENP.
determining the path coefficients and their statistical sig- Hence, H1 and H2 were supported, while H3 was not
nificance. The present study evaluated and reported the supported.
structural model using the set of criteria of Hair Jr et al.
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Direct effects
Hypothesis 1 GAB → ENP 0.171 3.066 0.002 [ 0.063; 0.284] Supported
Hypothesis 2 GM → ENP 0.210 2.845 0.004 [ 0.063; 0.352] Supported
Hypothesis 3 GOP → ENP 0.029 0.552 0.581 [− 0.074; 0.132] Not supported
Hypothesis 4 GAB → GI 0.132 2.788 0.005 [ 0.042; 0.227] Supported
Hypothesis 5 GM → GI 0.515 10.501 0.000 [ 0.418; 0.609] Supported
Hypothesis 6 GOP → GI 0.262 5.678 0.000 [ 0.170; 0.351] Supported
Hypothesis 7 GI → ENP 0.384 5.074 0.000 [ 0.237; 0.532] Supported
Mediating effects
Hypothesis 8 GAB → GI → ENP 0.051 2.303 0.021 [ 0.014; 0.099] Supported
Hypothesis 9 GM → GI → ENP 0.198 4.705 0.000 [ 0.118; 0.285] Supported
Hypothesis 10 GOP → GI → ENP 0.104 3.599 0.000 [ 0.051; 0.161] Supported
Moderating effects
Hypothesis 11 GAB*GTL → GI 0.128 3.171 0.002 [ 0.039; 0.198] Supported
Hypothesis 12 GMO*GTL → GI − 0.056 1.299 0.194 [− 0.139; 0.030] Not supported
Hypothesis 13 GOP*GTL → GI 0.023 0.505 0.614 [− 0.066; 0.116] Not supported
Control variables effect
Age → ENP 0.056 1.397 0.163 [− 0.025; 0.148] Not supported
Ownership → ENP 0.076 1.908 0.057 [− 0.005; 0.313] Not supported
Firm Size → ENP − 0.030 − 0.755 0.451 [− 0.218; 0.097] Not supported
Graphical presentation of hypothesis result 0.150–0.250, 0.000–0.100, 0.100–0.200 for Figs. 3, 4, and
5 respectively.
Hypothesis results are also presented in the form of graphs. H4, H5, and H6 predicted positive effects of the GAB,
The t values, p value, and B value are generated to hundred GM, and GOP on GI, and H7 proposed positive effects
random values using the rand function in MATLAB 2020; of GI on ENP. Results given in Table 6 exhibit that
they are drawn into 3D plot using the curve fitting tool of GAB (β = 5 0.86, t = 5 38.55, p < 0.01), GM (β = 5 0.86,
mentioned software. The range of t values is 3.000–4.000, t = 5 38.55, p < 0.01), and GOP (β = 5 0.86, t = 5 38.55,
2.250–2.350, 3.150–3.250, range of p value 0.001–0.003, p < 0.01) have significant effect on green innovation.
0.000–0.050, 0.001–0.003, and range of beta values is Similarly, for H7 results revealed that green innovation
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Environmental Science and Pollution Research (2023) 30:2958–2976 2969
is also positively associated with ENP (β = 5 0.86, t = 5 t value = 2.509), and GI. Thus, H11 was supported, and
38.55, p < 0.01). Therefore, H4, H5, H6, and H7 were H12 and H13 were rejected. Figures 6, 7, and 8 also
supported. present the view of moderating effect of GTL on the
The variance accounted for (VAF) method was relationship between GHRM practices and GI. Figure 6
employed to assess the mediating role of GI in medi- shows that in the presence of GAB, the relationship
ating the relationship between GAB, GMO, GOP, and between GTL and GI makes stronger, but there is no
ENP. As a general rule, VAF values more than 80%, 20% evidence in Figs. 7 and 8 that GM and GO strengthen the
to 80%, and less than 20% are termed full mediation, relation between GTL and GI.
partial mediation, and no mediation. Table 7 shows that Furthermore, the research examined the control roles
the mediating impact is 22.79%, 48.47%, and 80.55%, of company size, ownership type, and age while account-
respectively. These results reveal that GI partially medi- ing for the contextual influence. According to Table 5,
ates the relationship between GAB, GM, and ENP but company size, ownership type, and age all had negligible
fully mediates the relationship between GOP and ENP. contextual effects on ENP.
Thus, H8, H9, and H 10 are supported.
Finally, we found that green transformational leader-
ship significantly moderates the GAB and GI relationship Discussion of results
(β = 0.104, p = 0.031, t value = 2.509). However, results
in Table 6 demonstrate that GTL does not significantly Our outcomes suggest that GHRM practices (opportu-
moderate the relationship between GM (β = 0.104, nity, motivation, ability) significantly influence green
p = 0.031, t value = 2.509), GOP (β = 0.104, p = 0.031, innovation (green process innovation, green product
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Green innovation
3.5
GAB GI ENP 0.051 0.222 22.79% 3
GM GI ENP 0.198 0.408 48.47%
2.5
GOP GI ENP 0.104 0.129 80.55%
2
1.5
1
5 Low GOP High GOP
4.5 Low GTL
Fig. 8 Moderating role of Transformational Leader between green
4 High GTL opportunity and green innovation
Green innovation
3.5
3
2.5 The study established a positive interaction between
environmental performance and green innovation.
2
According to the study, green innovation (process and
1.5 product) significantly impacts the performance of SMEs
1 in Pakistan. These results align with Asadi et al. (2020),
Low GAB High GAB stating that innovation plays a critical role in making a
firm competitive. Besides, it also affirms the outcomes
Fig. 6 Moderating role of Transformational Leader between green of Mandal and Pal (2021), stating that green innovations
ability and green innovation
entail product innovations that consist of eco-labeling,
recycling, recovery of products, and environmentally
5 friendly materials. This innovative company can enhance
4.5 existing processes, prevent pollution, enforce waste recy-
Low GTL
4 cling, and improve energy savings.
Green innovation
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Environmental Science and Pollution Research (2023) 30:2958–2976 2971
with the previous results of Li et al. (2020). The out- are essential resources that ought to be highly regarded
comes prove that transformational leaders who instill and stay unique to the firm to the extent that they cannot
green behaviors among their employees inspire them to be replicated. Our study supports and advances the abil-
act accordingly, promoting green innovation. Therefore, ity motivation theory (Appelbaum et al. 2000), where we
there are great opportunities transformational leaders can assert that a firm ought to develop and integrate GHRM
use to implement green prospects effectively. practices that attract, retain, train, and motivate green
employees in a bid to promote environmental perfor-
mance and green innovation based on continuous GTFL’s
Conclusion monitoring role. Therefore, this study has integrated both
AMO theory and RBV, alongside illustrating how GHRM
Our study aimed to investigate the interaction of green practices and leadership enhance firm green performance
innovation and GHRM and how it impacts a firm’s envi- and green innovation.
ronmental performance. This study has supported and HRM and leadership play a crucial role in unleash-
advanced past studies on how GHRM affects green inno- ing human potential through various perspectives. Past
vation (Renwick et al. 2013) alongside the moderating studies have different outcomes on the part of lead-
role of green transformational leaders and how green ership in a company on the moderator, mediator, and
innovation influences firm environmental performance antecedent perspective on human resource management
(Singh et al. 2020). Our study suggests that green pro- outcome interactions. Our study appreciates the critical
cesses and product innovation enhance environmental role played by GTFL, which is a precursor of GHRM to
performance in an organization. Besides, according to enhance environmental performance and green innova-
our findings, green innovation facilitates the impact of tion. Besides, our findings suggest that an organization
GHRM on the firm’s environmental performance. Our must capitalize on GTFL to come up with and initiate
results significantly support and expound on past studies human resource management practices and policies to
where leadership moderates the effect of human resource promote employee’s green motivations and abilities and
management practices alongside encouraging green inno- present them with a chance in the workplace to take part
vation (Jia et al. 2018). Besides, according to our find- in environmental management activities that enhance
ings, GHRM indirectly via green innovation affects envi- firm’s environmental performance and green innovation.
ronmental performance in SMEs. Overall, the obtained We also determined that GHRM practices and green
results in this study support all direct hypotheses except innovation enhance the company’s environmental perfor-
GOP → ENP, and also results do not support the moder- mance. Our findings suggest that GHRM such as empow-
ating effects of GTFL between GMO, GOP, and green erment, performance-based incentives, and green hiring
innovation. Moreover, this study has several theoretical assist a company in attracting, retaining, and sustaining
and practical implications. green employees in the quest to enhance green innovation
(services, products, and processes) that support solid envi-
ronmental performance. So, according to our study, a firm
Theoretical implications must embrace GHRM practices that will increase its com-
petitive advantage. Our outcomes suggest that a firm needs
Our study suggests three primary implications for proactive GHRM practices that develop, retain, and attract
advancing the AMO theory. The study supports and pro- green employees to enhance environmental performance
motes the resource-based view (Barney 2001) alongside and green innovation to achieve competitive advantage.
ability motivation theory to demystify the interaction Lastly, our study suggests that human resource man-
between environmental performance and green inno- agement performance interaction neither relies on the
vation. Based on our study, GTFL acts as an essential additive impact of green transformation leaders along-
strategic resource a firm should utilize to implement side green innovation as mediator and antecedent nor
GHRM that impacts environmental performance and interactive effectiveness; instead, a combination of com-
green innovation. In applying the resource-based view binational forms (interactive and additive) to influence a
to the human resource management performance link, company’s ecological performance.
our study suggests that both employees and leadership
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Environmental Science and Pollution Research (2023) 30:2958–2976 2973
Appendix
Table 8 Harman single factor Total variance explained
test
Component Initial eigenvalues Extraction sums of squared loadings
Total % of variance Cumulative % Total % of variance Cumulative %
Acknowledgements Authors are thankful to anonymous reviewers who Data availability The datasets used and analyzed during the current
raised valuable points to improve the quality of this manuscript. study are available from the corresponding author on reasonable
request.
Author contribution FHA: he writes the literature review and draws
a conceptual framework. LD: he draws the initial idea of this paper Declarations
and writes the introduction, problem statement, and significance of
the study. KJ: he is an expert in data analysis, and he analyzes col-
lected data and writes methodology. RFG: he formats the paper and Ethics approval and consent to participate Not applicable.
proofreads manuscript.
Consent for publication Not applicable.
Funding This paper is partly supported by the National Social Science Competing interests The authors declare no competing interests.
Foundation of China (No. 19ZDA081).
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