Improving green innovation performance: the role of integrating green customers and suppliers, government regulations, green knowledge integration capability

Green innovation is both an environmental obligation and a strategic necessity for businesses. Drawing from the principles of resource dependence and institutional theories, external collaborations and internal capabilities interact to drive green innovation performance (GIP). Data was collected from 590 middle-management employees in food manufacturing firms. The results of hierarchical regression analysis show that a slight increase in green customer integration (GCI) boosts a firm’s GIP by 25.8%. Similarly, green suppliers’ integration (GSI) improves GIP by 11.9%, though the effect was marginally significant at a p-value of 0.10. The findings indicate that green knowledge integration capability (GKIC) mediates the relationship between GCI and GIP but not between GSI and GIP. Furthermore, government regulations (GR) significantly moderate the link between GCI and GIP but not between GSI and GIP. The study emphasizes the importance of embedding green practices both internally and externally, involving stakeholders such as customers and suppliers. The mediating role of GKIC highlights the need for firms to invest in robust knowledge management systems to drive innovation. Additionally, organizations must remain responsive and proactive in adapting to regulatory changes, viewing these as opportunities for innovation and competitive advantage. Policymakers are encouraged to create transparent and supportive regulations that facilitate stakeholder collaboration throughout the supply chain, promoting environmental sustainability across industries.