Abstract
This study investigates the role of Chinese manufacturing firms in implementing Environmental Management Systems (EMS) to understand how these practices impact export performance and the mediating and moderating effects of innovation. Using structural equation modeling on data from 226 Chinese manufacturing businesses, our findings indicate that EMS indirectly enhances export performance through innovation. This research provides significant contributions to general management by integrating EMS and innovation within the strategic framework of manufacturing firms, offering insights for enhancing competitive advantage and sustainability in global markets. The findings also present practical implications for managers to leverage EMS and innovation for improved business outcomes and sustainable practices.
Introduction
In recent decades, Environmental Management Systems (EMS) have experienced significant growth, coinciding with the emergence of “carbon neutral” initiatives worldwide. This trend is largely attributable to the Paris Agreement (2015), which catalyzed global efforts to address climate change collectively. The surge in EMS prominence reflects the increasing attention it garners from both industry and academia, particularly in a global environment characterized by uncertainty (Chen et al., 2023) and aligns with a market revolution primarily focused on sustainability, as evidenced by scholarly work (Eccles and Klimenko, 2019).
As environmental consciousness continues to rise, businesses face heightened scrutiny and pressure from a multitude of stakeholders, urging them to prioritize sustainability performance (Li et al., 2017). This shift is further underscored by a recent international survey, where over half of respondents expressed concerns about the negative impact of capitalism in its current form on the world (Edelman, 2020). Notably, EMS-related issues, particularly climate change, emphasized by the United Nations through its Sustainable Development Goals, are compelling businesses to take decisive action (United Nations Development Programme, 2015). The urgency of addressing these concerns has been magnified by the impacts of the COVID-19 crisis (Wood, 2020).
Consequently, environmental challenges are gaining strategic importance globally, particularly for exporters. Exporting remains the predominant mode of international business expansion due to advantages such as reduced risk exposure, lower resource consumption, and enhanced competitive strength (Hultman et al., 2009; Yasir et al., 2020). Export markets are crucial for Chinese manufacturing companies for several reasons.
First, China’s export boom has been a major driver of its economic growth over the past few decades. Since 1992, China’s exports have increased more than tenfold, far outpacing global trade growth (Amiti and Freund, 2007). This expansion has allowed Chinese manufacturers to significantly grow their revenues and scale of operations. With slowing domestic demand in recent years, export markets have become even more critical for absorbing China’s expanding industrial capacity and maintaining growth (Boullenois and Jordan, 2024). While China’s domestic market is substantial, export markets enable manufacturers to diversify their customer base, reducing dependence on domestic economic conditions. This diversification is crucial for mitigating risks associated with economic fluctuations and ensuring sustained growth. However, previous research in this field remains controversial. The increasing emphasis on EMS criteria may pose additional challenges for exporting companies, potentially leading to exclusion from partner selection, reduced delivery volumes, transaction suspensions, and export abandonment due to certification costs (Na et al., 2021). Hence, there is significant debate over whether corporate EMS acts as a cost or benefit concept for companies. Given that EMS has yet to be thoroughly examined in a global enterprise environment, exploratory research that allows for the exploration of emerging factors was deemed more acceptable for uncovering novel insights (Zeriti et al., 2014).
As environmental changes become more complex and rapid, radical innovation has emerged as a strategic imperative for organizations aiming to gain a competitive advantage. Manufacturing organizations encounter numerous challenges, including a lack of critical organizational innovation, overreliance on essential core competencies and high-end machinery, low product quality, absence of globally recognized corporate products, inadequate energy and fuel efficiency, and serious environmental pollution. These flaws significantly impact the growth of China’s manufacturing industry, necessitating urgent improvement in its modeling techniques towards sustainability (Qiu et al., 2019). Therefore, the cultivation and promotion of innovation are crucial, particularly during the green development phase of manufacturing businesses. The exploration of how to expand the impact of green business on corporate competitive edge through innovation is essential for guiding management activities.
While existing research has explored the individual dimensions of EMS (Leonidou and Leonidou, 2011; Li and Li, 2023), few studies have investigated the integration of EMS and innovation within manufacturing exporters. This study aims to address this gap by examining the relationship between EMS, innovation, and export performance in Chinese manufacturing enterprises. Specifically, we seek to elucidate the connections between EMS and innovation, EMS and export financial performance, and the mediating and moderating role of innovation in these relationships.
Our research is structured around three primary objectives. First, we aim to delineate the relationship between EMS factors and innovation within Chinese manufacturing companies. Second, we seek to clarify the association between EMS practices and export financial performance in this context, acknowledging the complexities involved (Li and Li, 2023; Teplova et al., 2022). Third, our study examines whether innovation acts as a mediator and moderator in the link between EMS and business performance in manufacturing firms.
This paper makes significant contributions to general management by integrating EMS within the strategic framework of manufacturing firms. First, it offers insights into how EMS practices can enhance competitive advantage and sustainability, providing a robust foundation for theoretical development. Second, the research addresses practical concerns specific to Chinese manufacturing, offering actionable recommendations for managers. By identifying the challenges and opportunities associated with EMS implementation, the study guides managers in leveraging EMS for improved business outcomes. Furthermore, the research bridges theoretical frameworks with practical applications, offering a comprehensive analysis that is relevant for both scholars and practitioners. Finally, the study identifies avenues for future research, advancing knowledge in the domain of EMS and its implications for general management.
Literature review and hypotheses development
In recent years, EMS have become essential non-financial considerations for ensuring a company’s sustainable growth. Traditionally, corporate values were assessed primarily through short-term or quantitative indicators, such as financial statements. However, the significance of non-financial values has been increasingly highlighted in response to recent global challenges such as climate change, the quest for carbon neutrality, and the COVID-19 pandemic. Within the realm of EMS considerations, environmental strategies aimed at addressing climate change are becoming increasingly crucial as indicators for evaluating corporate competitiveness (Cho, 2022).
The growing global consciousness about environmental concerns has put greater pressure on corporations and increased scrutiny from a number of stakeholders (Husted and de Sousa-Filho, 2017; Li et al., 2017). As a consequence of the study conducted by Gabler et al. (2023), businesses have begun to incorporate environmental problems into their strategic planning. The protection of the natural habitat has become a critical responsibility of commercial landscape owners and senior management (Leonidou et al., 2015). Senior management across various organizational functions, including Chief Operating Officers, Chief Executive Officers, and HR managers, are actively involved in initiatives aimed at environmental preservation and sustainability (Singh et al., 2020).
While some studies highlight the significant costs and potential disruptions associated with EMS, others argue that the long-term benefits outweigh these initial hurdles. For instance, firms that successfully implement EMS can achieve cost savings through enhanced resource efficiency, waste reduction, and improved regulatory compliance (Eiadat et al., 2008). Additionally, improved public image and stakeholder relationships can lead to increased market opportunities and customer loyalty (Bostian et al., 2016).
Given these conflicting viewpoints, it is essential to further explore the nuanced relationship between EMS and corporate performance. Existing literature has primarily focused on the direct effects of EMS on performance metrics (Bıçakcıoğlu et al., 2019; Zeriti et al., 2014), but the mediating and moderating roles of innovation remain underexplored. This study aims to address these gaps by investigating how innovation mediates and moderates the relationship between EMS and export performance in Chinese manufacturing enterprises.
Incorporating environmental considerations into operations can provide firms with competitive advantages, as posited by the resource-based view (RBV) framework (Barney, 1991; Bıçakcıoğlu et al., 2019; Hart, 1995). A green entrepreneurial orientation, for example, encourages the development of innovative green products and promotes overall sustainability (Tuan, 2022). As a result, the integration of EMS factors has become imperative for achieving long-term success and sustaining core competencies (Christmann, 2004).
EMS integration has evolved into a prerequisite for long-term corporate success. A sustainability strategy encompasses various capabilities that are unique and not easily imitable (Teece et al., 1997). Consequently, an EMS approach that encompasses both the company and its environment possesses the characteristics of valuable resources and capabilities, enabling firms to adapt to external environmental changes and positively impact their growth trajectory (Aragõn-Correa and Sharma, 2003; Naeem and Cankaya, 2022).
Enterprises actively practicing EMS principles can garner stakeholder support, access external resources, and enhance operational efficiency (Bostian et al., 2016). Environmentally conscious customers exert pressure on emerging-market enterprises to optimize water and energy usage by rethinking operations and obtaining environmental management certifications like ISO14001 (Hsu et al., 2013). Despite challenges stemming from inferior local institutional circumstances, organizations in developing markets tailor green strategies to align with their strategic objectives (Child and Tsai, 2005; Bodas Freitas and Fontana, 2018; Xiaohong et al., 2021).
Adopting EMS practices leads to a low-impact, innovative approach to consumption, minimizing waste, and material adulteration. Green manufacturing solutions reduce resource usage, power consumption, and promote reuse, serving as barriers to material waste and pollution (Majid and Khoo, 2009). Environment-conscious energy, products, services, and employee education further promote green strategies, enhancing knowledge and acceptance while mitigating risks associated with excessive raw material consumption. Based on the existing literature, we hypothesize the following: H1: EMS is positively related to innovation.
Drawing upon Freeman and Medoff’s (1984) stakeholder theory, the significance of addressing diverse stakeholder needs in shaping company strategy is emphasized (Freeman and Medoff, 1984). As firms expand internationally, the imperative to integrate environmental considerations into their strategies becomes more pronounced (Leonidou et al., 2017). In response to escalating regulatory pressures and environmental concerns, firms are increasingly adopting environmentally friendly concepts (Masud et al., 2019). Businesses are being held accountable for their environmental impact, with stakeholders demanding greater transparency, accountability, and action to mitigate environmental risks (Chen et al., 2023). The urgency of addressing environmental challenges has been underscored by international agreements such as the Paris Agreement, which calls for collective action to limit global warming and transition to a low-carbon economy (Cho, 2022).
Consequently, environmentally conscious customers exert pressure on emerging-market enterprises to optimize water and energy usage by rethinking operations and obtaining environmental management certifications like ISO14001 (Hsu et al., 2013). Despite challenges stemming from inferior local institutional circumstances, organizations in developing markets tailor green strategies to align with their strategic objectives (Child and Tsai, 2005; Bodas Freitas and Fontana, 2018; Xiaohong et al., 2021).
Embracing eco-friendly practices enables companies to enhance their corporate image by offering environmentally friendly technologies or services, which play a pivotal role in distinguishing organizations from competitors. Moreover, eco-friendly activities drive resource allocation efficiency and cost reduction, affording companies a competitive advantage. By embracing sustainable practices, companies can reduce long-term costs and enhance competition through resource efficiency improvements and waste minimization (Eiadat et al., 2008).
Additionally, innovative waste-to-product conversion methods open new market opportunities, enabling companies to gain a competitive edge and expand market share and sales (Cho, 2022). Consequently, firms must address shareholder needs to bolster competitiveness (Garcës-Ayerbe et al., 2012). Companies with a green entrepreneurial orientation are more inclined to develop eco-friendly products and processes, aligning with consumer preferences (Tuan, 2022). Thus, green initiatives play a critical role in reducing natural material consumption and enhancing performance (Albertini, 2013; Dangelico and Pontrandolfo, 2015). Based on current research, we hypothesize the following: H2: EMS is positively related to export performance.
Innovation redefines market boundaries by introducing new value propositions to existing consumers, significantly elevating perceived value and rendering competitors obsolete with offerings capable of attracting new business (Kim and Mauborgne, 1999). In the realm of international markets, innovation is indispensable for creating a competitive edge, enabling firms to leverage economies of scale and capitalize on opportunities beyond local market constraints. Achieving a competitive advantage entails identifying and cultivating new markets, while effectively competing with rivals through the acquisition and development of novel technologies and products. Furthermore, internationalization plays a pivotal role in enhancing a company’s performance (Lin et al., 2015), with keeping pace with the trends of economic globalization presenting a primary challenge for corporations striving to deliver superior products amidst ongoing technological advancements (Yang and Wang, 2022).
Innovation serves as a strategic response to the rapidly evolving business landscape, enhancing traditional capabilities related to efficiency, superiority, adaptability, and speed (Bon and Mustafa, 2013). Additionally, innovation enhances understanding of both present and future business dynamics (Perdomo-Ortiz et al., 2009).
Firms engaging in innovation to address environmental concerns concurrently improve their social and financial performance by reducing costs and waste (Weng et al., 2015). Corsino and Gabriele (2011) analyzed global semiconductor consumption trends from 1998 to 2004, uncovering significant productivity impacts at the firm level attributed to new technologies. Technological advancements profoundly influence business profitability, with innovation in product and process development often providing the requisite infrastructure and capabilities for successful globalization (Zheng et al., 2023). Based on Li and Yan (2020), such capabilities and competencies enable a comparative advantage, which is critical for limiting the risks of anomalies.
However, research findings on the relationship between innovation and export performance are inconsistent. Some studies have shown a positive relationship between innovative activities and export intensity (Bierut and Dybka, 2021; Kim and Hemmert, 2016), while others have failed to find significant relations or even suggested the possibility of bidirectional causality (Cassiman et al., 2010; Filipescu et al., 2013). These discrepancies may stem from varying market contexts, industry characteristics, and degrees of internationalization among businesses. Especially within Chinese manufacturing, empirical studies on how innovation impacts export performance are still relatively limited (Fang et al., 2019). Therefore, this study aims to explore the impact of innovation on export performance, particularly within Chinese manufacturing enterprises. We propose the following hypothesis: H3: Innovation is positively related to export performance.
The mediating effect refers to how a third variable (mediator) explains the mechanism by which a predictor variable (EMS) influences an outcome variable (export performance). In this case, innovation acts as a mediator, meaning that EMS influences innovation, which in turn affects export performance (Cui and O'Connor, 2012; Li and Yan, 2020). This suggests that the impact of EMS on export performance is indirect, with innovation being the pathway through which this impact occurs.
Green initiatives provide businesses with a structured approach to assess their current environmental performance, identify key challenges, and unlock emerging opportunities. For instance, these initiatives can reveal ways to reduce resource consumption or tap into growing markets for eco-friendly products (Porter and van der Linde, 1995; Bodas Freitas and Fontana, 2018). The maturity of green management systems is often seen as an indicator of a firm’s engagement in environmental innovation (Biondi et al., 2002). Green initiatives act as a coordinating mechanism, aligning corporate strategies with environmental goals, and case studies show that adopting EMS can significantly contribute to environmental innovation (Avadikyan et al., 2001).
In addition to driving innovation, EMS adoption can result in considerable financial benefits. Companies often achieve cost savings through reduced production waste, increased resource efficiency, and streamlined manufacturing processes (Bansal and Hunter, 2003; Darnall et al., 2008). These operational improvements not only support sustainability goals but also enhance firms’ competitiveness by lowering operational costs and boosting overall efficiency. EMS fosters an environment conducive to innovation, encouraging firms to rethink traditional business models and explore novel approaches to meet evolving societal and environmental demands.
Importantly, EMS also positions firms to capture emerging opportunities in international markets. Innovation, as a result of EMS, allows companies to optimize their processes, reduce environmental impact, and maintain profitability, particularly in competitive export markets (Paul et al., 2017). This ability to balance sustainability and economic performance positions firms for long-term success. Research indicates that companies engaged in innovation-driven sustainability efforts perform better in export markets, as they are more likely to outpace competitors through differentiation and innovative practices (Guarascio et al., 2017).
Innovation is a critical strategic resource that provides firms with a sustainable competitive advantage in global markets (Bıçakcıoğlu et al., 2019). By prioritizing innovation, companies not only enhance their brand image but also expand their market reach and increase profitability. Integrating environmental strategies with innovation enables firms to better meet international market demands and improve their competitive positioning.
While previous research (Biondi et al., 2002; Hauser et al., 2006) has examined the impact of EMS on innovation, limited attention has been given to how innovation mediates the relationship between EMS and export performance. Specifically, in the context of Chinese manufacturing, how firms can leverage EMS to enhance export performance through innovation remains underexplored. To address this gap, our study investigates the mediating role of innovation in the relationship between EMS and export performance. We propose that innovation acts as a bridge, translating the advantages of EMS into improved export performance in international markets. Based on this rationale, we present the following hypothesis: H4: Innovation mediates the effect of EMS on export performance.
A moderating effect occurs when a third variable, such as innovation, influences the strength or direction of the relationship between a predictor variable (EMS) and an outcome variable (export performance). In this context, innovation plays a critical role in determining how effectively EMS can influence export performance. For firms with higher innovation capabilities, EMS tends to have a stronger positive impact on export performance compared to those with lower innovation capacities (Tatoglu et al., 2020). This suggests that innovation not only enhances but also amplifies the beneficial effects of EMS in fostering international competitiveness.
Strategic positioning through innovation enables companies to better differentiate themselves in the market. By adopting a differentiation strategy, firms increase their credibility and appeal to customers, making them more competitive in both domestic and international markets (Porter, 1985). Innovation contributes to this by helping firms enhance product quality, improve safety features, and eliminate negative perceptions that could arise from poor environmental practices. These advantages are particularly significant when operating in foreign markets, where firms often face additional challenges related to unfamiliar regulatory environments and customer expectations—commonly referred to as the “liabilities of foreignness” (Eden and Miller, 2004). Improved product quality, made possible through innovation, also enables companies to charge premium prices in global markets, leading to higher profitability and better export performance (Rodrigue and Tan, 2019).
Moreover, innovation is a pivotal factor in driving corporate sustainability. Firms that prioritize sustainability aim to reduce production costs, enhance energy efficiency, and minimize environmental impact, all of which necessitate innovative approaches in their operations (Bansal, 2002; Meneto and Siedschlag, 2020). Through the lens of the resource-based view, innovation allows firms to develop unique capabilities by leveraging natural resources in environmentally responsible ways. This process of environmental product differentiation helps firms succeed in competitive global markets, particularly as consumer preferences increasingly favor products and services that demonstrate strong environmental and social responsibility (Bostian et al., 2016).
As businesses worldwide face growing pressure to adopt sustainable practices, innovation becomes essential for companies aiming to maintain competitiveness in international markets. Exporting firms, particularly those in developing markets, are more likely to incorporate innovation into their strategies to gain a foothold in competitive global markets (Tatoglu et al., 2020). By integrating environmental and social considerations into their innovative activities, firms can strengthen customer engagement, increase customer loyalty, and expand their international sales networks (Martin-Tapia et al., 2009; Zou et al., 2003). This alignment between innovation and sustainability enables firms to not only meet evolving consumer demands but also to enhance their long-term profitability and market share.
While previous studies have shown that innovation enhances a firm’s competitiveness in international markets (Porter, 1985; Rodrigue and Tan, 2019), the moderating role of innovation between EMS and export performance remains underexplored. This is especially true for enterprises in developing countries, where the impact of innovation on the relationship between EMS and export performance warrants further investigation. Therefore, we propose the following hypothesis: H5: Innovation moderates the effect of EMS on export performance.
The research model of this study is shown in Figure 1. Research model.
The balance of this paper is organized as follows: The following section presents empirical data and research theories. Next, the study approach (data gathering and samples) and the variables and models used to verify the hypothesis are evaluated. Finally, a discussion of the empirical study’s findings and implications is presented.
Materials and methods
Research method
This study explores the relationship between EMS, innovation, and export performance, utilizing quantitative analysis as the primary research approach. While qualitative methods offer valuable insights, quantitative analysis remains prevalent due to its robustness and ability to generate statistically significant results (Teagarden et al., 1995). Therefore, this study employs quantitative methods to investigate the interplay between EMS, innovation, and export performance.
Quantitative analysis involves the measurement of countable items within specified categories aligned with the study’s constructs. Through carefully designed questions informed by existing theory and literature, rigorous measurement and assessment are applied to either support or challenge the researcher’s conclusions, grounded in empirical evidence.
To ensure a comprehensive understanding of the research subjects, respondents were instructed to focus on their primary export product-market venture when completing the questionnaire (Theodosiou and Katsikea, 2013). The questionnaire underwent a rigorous development process to ensure its validity. Initially designed in English, it was then translated into Chinese and back-translated. Face validity was confirmed through review by three academic researchers in marketing and international business. Pilot testing was conducted in two phases with a sample of 10 senior executives of exporting manufacturing companies, involving 40 excluded from the main survey. The process aimed to ensure clarity and comprehension of the questionnaire’s content, with no significant issues identified for further study.
A questionnaire survey approach may be quite useful for gathering demographic data and painting a wide picture of study objects. The questionnaire allows the researcher to collect a wide range of data from a large number of participants. Hence, the quantitative research method of the questionnaire was used, and all factors were evaluated prior to the production of indicators.
This study developed items that were based on previous research. EMS was examined by employing seven items adapted from Bıçakcıoğlu et al. (2019). Innovation was measured by using eight items adapted from Zhu et al. (2019) and Martinez-Conesa et al. (2017). Five items adapted from Carneiro et al. (2016) and Bıçakcıoğlu et al. (2019) were used to assess export performance.
Data analysis was conducted using SPSS 25 and AMOS 26 programs, with a 5-point Likert scale utilized for measurement. Initial analyses examined the general characteristics of the samples, followed by validity and reliability assessments through factor and reliability analyses. Subsequently, correlations between variables were explored to elucidate their relationships, and regression analysis was employed to test the study hypotheses rigorously.
Sample and data collection
This study used a questionnaire survey to investigate the influence of EMS on export performance in China. The survey covered two aspects: how does the implementation of EMS and innovation affect export performance, and how does innovation affect the relationship between EMS on export performance in Chinese manufacturing firms?
This study focuses on the Chinese manufacturing exports for several reasons. Firstly, as the backbone of the country’s economy, Chinese manufacturing has experienced significant growth over the past four decades, emerging as a global leader. In 2018, its GDP contributed approximately 30% to the Chinese economy, reaching 26.4 trillion Yuan. However, despite its substantial expansion, manufacturing organizations confront various challenges, including a lack of critical innovation, excessive reliance on key technologies and high-end machinery, subpar product quality, absence of globally recognized brands, inefficiencies in raw material and energy usage, and severe environmental pollution issues. These challenges have notably hindered the growth of China’s manufacturing sector, necessitating a shift towards a more sustainable development model.
Furthermore, exporting plays a pivotal role in China’s economic growth and welfare. Since the mid-1980s, China’s export expansion, particularly in labor-intensive industries, has driven remarkable economic growth (Wang and Wei, 2010). Notably, manufacturing exports constitute a significant portion of China’s overall exports, underlining their importance in driving economic prosperity.
The basic characteristics of the samples.
We also investigated common method bias using three major procedural remedies (Podsakoff et al., 2003). First, in the survey questionnaire, questions for analyzing EMS, innovation, and export performance were divided into distinct sections. Second, in the survey answer, both respondents and firms were anonymized. Third, a pretest with 10 senior executives strengthened the content validity of the questions, ensuring that the survey questions were understandable. During the data analysis, we performed a post hoc statistical correction utilizing Harman’s one-factor test by confirmatory factor analysis with AMOS26. Results of this one-factor model are X2 (df) = 882.68(135), p = 0.000, CFI = 0.61, NFI = 0.58, IFI = 0.62, RMSEA = 0.15, indicating a poor model fit and the common method bias should not be a problem.
Empirical results
Reliability analysis
In this paper, exploratory factor analysis was applied using variable factor analysis, and it indicates the degree of correlation with the Varimax approach, which is a rotation method of factors. Additionally, items with factor loading values of 0.5 or above were selected in order to improve the validity of each component of factor analysis.
Reliability and convergent validity.
The KMO test value reflects how well other variables explain the correlation between variables. The Bartlett sphericity test shows if the existing factor analysis model is appropriate. The result of the KMO’s sample suitability test is 0.904, and the results of Bartlett’s test of sphericity verification are 2269.173, df = 190, and sig = 0.000, indicating that factor analysis is acceptable.
Average Variance Extracted (AVE) is greater than 0.5, but we may accept 0.4. Because Fornell and Larcker stated that if AVE is less than 0.5 but composite reliability is more than 0.6, the construct’s convergent validity remains acceptable (Fornell and Larcker, 1981). The results of convergent validity are shown in Table 2. Each component has a factor loading value ranging from 0.567 to 0.851, indicating that the basic adaptation index is acceptable. The model has high internal quality because all variable CR values are more than 0.6 and AVE values are greater than 0.4. Moreover, the correlation coefficients for each component are all less than the square root of AVE, showing strong discriminant validity.
Correlations analysis
The results of discriminant validity.
Model fit indices.
Figure 2 illustrates the results of the hypotheses. First, the implementation of EMS is positively related to innovation (0.568, p < 0.01), as shown by the path coefficients and degree of significance. Hence, the statistical model’s results support H1. Second, EMS is positively related to export performance (0.163, p = 0.127 > 0.1); therefore, H2 is not supported. Third, innovation is positively related to export performance (0.664, p < 0.01). Thus, H3 is supported. Empirical results.
Hypothesis test results.
Conclusion
Our study advances the RBV theory by demonstrating that EMS can serve as a valuable resource, enhancing a firm’s innovation capabilities and securing a sustainable competitive advantage. The findings reveal that, when effectively implemented, EMS fosters the development of unique capabilities that are difficult for competitors to replicate, thus reinforcing a firm’s competitive edge. Moreover, our research extends Stakeholder Theory by illustrating how EMS implementation significantly strengthens relationships with key stakeholders, including customers, employees, and regulatory bodies. By addressing environmental concerns, firms can not only gain the support of these groups but also improve operational efficiency and market performance.
Additionally, this study clarifies the mediating role of innovation in the relationship between EMS and export performance. By showing that innovation serves as a critical pathway through which EMS influences export performance, we contribute to the existing literature on innovation management. Our findings highlight the importance of cultivating an innovative culture within firms to fully harness the benefits of EMS. This research also bridges the gap between environmental management and international business literature by underscoring the impact of EMS on export performance. It suggests that firms with robust EMS frameworks are better equipped to compete in global markets, offering a new theoretical perspective on integrating environmental strategies into broader international business strategies.
Our findings suggest that EMS can lead to significant improvements in business performance, including cost savings, enhanced innovation, and an improved market reputation. This integrated perspective calls for a multi-disciplinary approach to EMS research, encouraging future studies to explore the broader impacts of environmental management on corporate success.
This research examines the relationship between EMS and export performance, with a particular focus on the mediating and moderating role of innovation. Based on data collected from 226 reliable questionnaires completed by Chinese manufacturing firms, our findings provide valuable insights into these dynamics.
First, we identified a significant positive relationship between EMS practices and innovation, confirming previous research that highlights environmental considerations as key drivers of innovation (Rennings et al., 2006; Wagner, 2008; Xiaohong et al., 2021). This underscores the importance of integrating environmental concerns into strategic decision-making processes to foster innovation within manufacturing firms. Our analysis shows that EMS initiatives act as catalysts for innovation, prompting firms to reimagine traditional business models, explore new market opportunities, and develop products and services that meet evolving societal and environmental needs. For instance, companies investing in renewable energy or sustainable supply chains may innovate to enhance operational efficiency, reduce costs, and minimize their environmental footprint.
However, our study diverges from prior research by revealing that EMS does not have a direct impact on export performance, a finding that contrasts with the work of Bıçakcıoğlu et al. (2019) and Li and Li (2023). Additionally, innovation does not moderate the effect of EMS on export performance. This discrepancy may stem from the limited penetration of EMS in the Chinese market, where green initiatives are often driven by external pressures. Nonetheless, disregarding EMS is not advisable, as it remains a crucial determinant of corporate performance.
In contrast, innovation is strongly correlated with export performance, consistent with RBV theory, which posits that innovation drives long-term productivity (Barney, 1991). Chinese enterprises with strong innovative capabilities are better positioned to compete in global markets, leading to higher profits, expanded market reach, and improved brand image.
Furthermore, our findings reveal that innovation mediates the relationship between EMS and export performance, reinforcing the strategic importance of EMS for firms operating in an increasingly globalized and environmentally conscious marketplace. By prioritizing sustainability, companies can enhance their brand equity, reduce regulatory risks, and seize new growth opportunities.
In conclusion, our research highlights the critical roles of EMS and innovation in shaping export performance. While EMS directly influences innovation, which in turn drives export performance, innovation also mediates the relationship between EMS and export performance. This underscores the pivotal role of innovation in promoting sustainable growth strategies.
Implications for the manufacturing industry
Our study provides valuable insights for practitioners and policymakers in the manufacturing sector, emphasizing the strategic importance of integrating EMS into core business strategies. This integration helps address environmental and social challenges while improving long-term financial performance. For example, manufacturers can adopt eco-friendly production processes, invest in renewable energy sources, and optimize resource use to reduce carbon emissions and minimize environmental impact.
Innovation is crucial for sustainable manufacturing. By leveraging EMS-driven innovation, firms can develop eco-friendly products, optimize production processes, and meet consumer demand for sustainability. The principles of EMS should extend beyond internal operations to supply chain management. Collaborating with suppliers to ensure transparency, ethical sourcing, and compliance with environmental standards helps build resilient and responsible supply chains, reducing risks related to resource scarcity, regulatory issues, and reputational damage (Sarkis et al., 2021).
Navigating the complex regulatory landscape requires proactive compliance and risk management, aligning with the importance of corporate governance in driving sustainability initiatives (Aragón-Correa and Sharma, 2003). Embracing EMS principles creates opportunities for innovation and market differentiation, fostering long-term resilience, prosperity, and positive societal impact.
Managers should embed EMS into the core business strategy rather than treating it as a separate initiative. This integration ensures that environmental considerations are aligned with the company’s overall goals and operations. For instance, setting measurable environmental targets can drive innovation and operational efficiency across departments. By adopting EMS, companies can differentiate themselves in the marketplace. Managers should highlight the environmental credentials of their products and services to attract eco-conscious customers and enter new markets. Certifications like ISO 14001 can enhance the company’s reputation and customer trust.
Implementing EMS can lead to cost savings through improved resource efficiency. Managers should focus on areas where environmental improvements can also reduce costs, such as energy usage, waste management, and supply chain optimization. For example, investing in energy-efficient technologies can lower utility bills and reduce carbon emissions simultaneously. For EMS to be successful, it is crucial that all employees understand and support the environmental goals of the company. Managers should provide ongoing training and development programs to ensure that staff are knowledgeable about EMS practices and their benefits. Employee engagement can also be fostered through initiatives like green teams or sustainability challenges.
EMS can drive innovation by encouraging the development of new, environmentally friendly products and services. Managers should foster a culture of innovation that leverages EMS to explore new business opportunities. For instance, companies can invest in research and development to create sustainable products that meet the growing demand for green solutions. Effective EMS implementation requires active engagement with stakeholders, including customers, suppliers, and the community. Managers should communicate the company’s environmental initiatives and progress transparently, building stronger relationships with stakeholders and enhancing the company’s reputation.
Limitations and future research
Our study has several limitations that warrant consideration. Firstly, the focus on Chinese manufacturing enterprises may limit the generalizability of our findings to other contexts due to China’s unique institutional, cultural, and regulatory environment. Thus, caution is advised when extrapolating our results to different geographical locations or industry sectors.
Additionally, the cross-sectional design of our study only provides a snapshot of EMS, innovation, and export performance at a single point in time, hindering the assessment of causal relationships and temporal dynamics. Future research employing longitudinal or experimental designs could elucidate the temporal sequencing and causal mechanisms underlying the observed associations.
Furthermore, our study does not account for the influence of potentially relevant variables such as firm size, industry sector, technological capabilities, and market conditions. Future research could adopt a more comprehensive approach by incorporating additional control variables and exploring their interactions with EMS, innovation, and export performance.
To address these limitations and expand our understanding, future research avenues could include conducting comparative studies across different countries, industries, and organizational contexts to explore variations in the relationship between EMS, innovation, and export performance. Employing longitudinal research designs would allow for the examination of the dynamic evolution of EMS practices, innovation strategies, and export performance over time.
Additionally, exploring the multilevel determinants of EMS, innovation, and export performance, considering factors at the organizational, industry, and institutional levels, could provide valuable insights. Supplementing quantitative analyses with qualitative investigations would also offer deeper insights into the mechanisms and processes underlying the observed relationships.
By addressing these research gaps, future studies have the potential to contribute to a more nuanced understanding of the complex interplay between EMS, innovation, and export performance in the manufacturing industry and beyond.
Footnotes
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
