The Role of Green Innovation between Green Market Orientation and Business Performance: Its Implication for Open Innovation
Abstract
:1. Introduction
2. Literature Review
2.1. Effect of Green Market Orientation on Business Performance
2.2. Effect of Green Market Orientation on Green Innovation
2.3. Effect of Green Innovation on Business Performance
2.4. Mediating Effect of Green Innovation on Green Market Orientation–Business Performance Relationship
2.5. Research Framework
3. Methodology
3.1. Research Design
3.2. Data Collection
3.3. Definitions and Measurements
3.3.1. Green Market Orientation
- (1)
- Customer satisfaction encourages my company to run an environmentally friendly business.
- (2)
- My company always commits and serves environmentally friendly customers.
- (3)
- My company provides employees and customers with information on environmentally friendly products and services.
- (4)
- My company’s competitive advantage is determined by environmentally friendly customer-oriented knowledge.
- (5)
- My company always measures customer satisfaction through environmentally friendly products and services attributes.
- (6)
- My company has a customer service that operates regularly.
- (7)
- My company invests more in environmentally friendly products and services than those of competitors.
- (8)
- My company believes that this business exists to serve environmentally friendly customers.
- (9)
- My company provides information for customers to assess quality of environmentally friendly products and services.
- (10)
- My company communicates customer satisfaction data to all employees regularly.
3.3.2. Green Innovation
- (1)
- My company has selected environmentally friendly raw materials in product development.
- (2)
- My company has used energy-efficient raw materials in product development.
- (3)
- My company has carried out efficiency of raw materials for the production process in product development.
- (4)
- My company has evaluated that the product is easy to reuse, recycle, and decompose.
- (5)
- My company has effectively reduced the emission of hazardous substances or waste in the production process.
- (6)
- My company has effectively recycled waste and emissions in the production process.
- (7)
- My company has effectively reduced the consumption of water, electricity, or oil in the production process.
- (8)
- My company has effectively made innovations to reduce the use of raw materials in the production process.
3.3.3. Business Performance
- (1)
- The company’s sales tend to increase.
- (2)
- My company has succeeded in making various efforts for cost efficiency.
- (3)
- My company’s profit tends to increase.
- (4)
- My company is able to sell quality products at affordable prices and deliver them on time.
- (5)
- Customer complaints tend to decrease.
- (6)
- My company has been able to build an image and reputation so that loyal customers have increased.
- (7)
- My company has been able to improve the quality of production and services.
- (8)
- My company has been able to acquire new customers and retain old customers.
- (9)
- My company has been able to innovate on products.
- (10)
- Employees’ skills tend to improve.
- (11)
- The ability to process information using computer tends to improve.
- (12)
- Cooperation among employees tends to be better.
4. Results/Findings
4.1. Characteristics of Respondents
4.2. Descriptive Statistics
4.3. Measurement Model Analysis
4.4. Structural Model Analysis
5. Discussion on Open Innovation in MSMEs: Trend, Motives, and Management Challenge
6. Conclusions
6.1. Contribution to Theory
6.2. Contribution to Practice
6.3. Contribution to Society
7. Research Limitations
Author Contributions
Funding
Conflicts of Interest
References
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Classification | Description | Frequency | |
---|---|---|---|
Total | Percentage | ||
Experience | ≤5 years | 107 | 61 |
6–10 years | 45 | 26 | |
11–15 years | 10 | 6 | |
>15 years | 13 | 7 | |
Total | 175 | 100 | |
Products | Food and Beverages | 85 | 49 |
Crafts and Accessories | 32 | 18 | |
Dress/Fashion | 8 | 5 | |
Traditional Batik | 23 | 13 | |
Bag | 5 | 3 | |
Shoes | 3 | 2 | |
Others | 19 | 11 | |
Total | 175 | 100 | |
Average Annual Revenue | ≤Rp300 million rupiah | 154 | 88 |
>Rp300 million–Rp2.5 billion | 14 | 8 | |
>Rp2.5 billion–Rp50 billion | 7 | 4 | |
Total | 175 | 100 | |
Number of employees | 1–4 people | 127 | 73 |
5–19 people | 41 | 23 | |
20–99 people | 7 | 4 | |
Total | 175 | 100 |
Construct | Mean | Category | ||||
---|---|---|---|---|---|---|
Green Market Orientation | 4.3 | Strongly agree | ||||
Green Innovation | 4.2 | Strongly agree | ||||
Business Performance | 4.1 | Agree | ||||
Indicators | Mean | SD | Min | Max | Median | Mode |
GMO 1 | 4.6 | 0.7 | 1.0 | 5.0 | 5.0 | 5.0 |
GMO 2 | 4.5 | 0.7 | 1.0 | 5.0 | 5.0 | 5.0 |
GMO 3 | 4.5 | 0.7 | 1.0 | 5.0 | 5.0 | 5.0 |
GMO 4 | 4.3 | 0.8 | 1.0 | 5.0 | 4.0 | 4.0 |
GMO 5 | 4.3 | 0.8 | 1.0 | 5.0 | 4.0 | 5.0 |
GMO 6 | 3.8 | 1.1 | 1.0 | 5.0 | 4.0 | 4.0 |
GMO 7 | 4.1 | 0.8 | 1.0 | 5.0 | 4.0 | 4.0 |
GMO 8 | 4.3 | 0.8 | 1.0 | 5.0 | 4.0 | 5.0 |
GMO 9 | 4.2 | 0.8 | 1.0 | 5.0 | 4.0 | 5.0 |
GMO 10 | 4.0 | 0.9 | 1.0 | 5.0 | 4.0 | 4.0 |
GI 1 | 4.5 | 0.7 | 1.0 | 5.0 | 5.0 | 5.0 |
GI 2 | 4.4 | 0.7 | 1.0 | 5.0 | 5.0 | 5.0 |
GI 3 | 4.4 | 0.8 | 1.0 | 5.0 | 4.0 | 5.0 |
GI 4 | 3.9 | 1.1 | 1.0 | 5.0 | 4.0 | 5.0 |
GI 5 | 4.5 | 0.7 | 1.0 | 5.0 | 5.0 | 5.0 |
GI 6 | 4.0 | 1.1 | 1.0 | 5.0 | 4.0 | 5.0 |
GI 7 | 4.2 | 0.9 | 1.0 | 5.0 | 4.0 | 5.0 |
GI 8 | 4.0 | 1.0 | 1.0 | 5.0 | 4.0 | 5.0 |
BP 1 | 3.8 | 1.0 | 1.0 | 5.0 | 4.0 | 4.0 |
BP 2 | 4.0 | 0.9 | 1.0 | 5.0 | 4.0 | 4.0 |
BP 3 | 3.7 | 1.0 | 1.0 | 5.0 | 4.0 | 4.0 |
BP 4 | 4.1 | 0.8 | 1.0 | 5.0 | 4.0 | 4.0 |
BP 5 | 4.1 | 0.9 | 1.0 | 5.0 | 4.0 | 4.0 |
BP 6 | 4.4 | 0.7 | 1.0 | 5.0 | 4.0 | 5.0 |
BP 7 | 4.3 | 0.7 | 1.0 | 5.0 | 4.0 | 4.0 |
BP 8 | 4.3 | 0.8 | 1.0 | 5.0 | 4.0 | 5.0 |
BP 9 | 4.3 | 0.7 | 1.0 | 5.0 | 4.0 | 5.0 |
BP 10 | 4.2 | 0.8 | 1.0 | 5.0 | 4.0 | 4.0 |
BP 11 | 4.1 | 0.9 | 1.0 | 5.0 | 4.0 | 4.0 |
BP 12 | 4.2 | 0.7 | 1.0 | 5.0 | 4.0 | 4.0 |
Construct | Loading | p-Values |
---|---|---|
Green Market Orientation (Composite Reliability = 0.948; AVE = 0.648) | ||
GMO 1 | 0.726 | <0.001 |
GMO 2 | 0.823 | <0.001 |
GMO 3 | 0.810 | <0.001 |
GMO 4 | 0.847 | <0.001 |
GMO 5 | 0.849 | <0.001 |
GMO 6 | 0.647 | <0.001 |
GMO 7 | 0.779 | <0.001 |
GMO 8 | 0.862 | <0.001 |
GMO 9 | 0.869 | <0.001 |
GMO 10 | 0.808 | <0.001 |
Business Performance (Composite Reliability = 0.955; AVE = 0.661) | ||
BP 1 | 0.758 | <0.001 |
BP 2 | 0.776 | <0.001 |
BP 3 | 0.744 | <0.001 |
BP 4 | 0.824 | <0.001 |
BP 6 | 0.873 | <0.001 |
BP 7 | 0.864 | <0.001 |
BP 8 | 0.831 | <0.001 |
BP 9 | 0.846 | <0.001 |
BP 10 | 0.833 | <0.001 |
BP 11 | 0.728 | <0.001 |
BP 12 | 0.851 | <0.001 |
Green Innovation (Composite Reliability = 0.909; AVE = 0.557) | ||
GI 1 | 0.784 | <0.001 |
GI 2 | 0.803 | <0.001 |
GI 3 | 0.818 | <0.001 |
GI 4 | 0.712 | <0.001 |
GI 5 | 0.761 | <0.001 |
GI 6 | 0.702 | <0.001 |
GI 7 | 0.695 | <0.001 |
GI 8 | 0.683 | <0.001 |
Green Market Orientation | Business Performance | Green Innovation | |
---|---|---|---|
Green Market Orientation | 0.805 | 0.662 | 0.678 |
Business Performance | 0.662 | 0.813 | 0.619 |
Green Innovation | 0.678 | 0.619 | 0.747 |
Panel A (before Including Green Innovation as the Mediating Variable) | ||
---|---|---|
Hypotheses | β Coefficient | Decision |
Green Market Orientation > Business Performance | 0.67 *** | Supported |
Panel B (after including green innovation as the mediating variable) | ||
Hypotheses | β Coefficient | Decision |
Green Market Orientation > Business Performance | 0.43 *** | Supported |
Green Market Orientation > Green Innovation | 0.70 *** | Supported |
Green Innovation > Business Performance | 0.33 *** | Supported |
Hypotheses | VAF | Decision |
Green Market Orientation > Green Innovation > Business Performance | 25.64 percent | Partial Mediation, Supported |
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Tjahjadi, B.; Soewarno, N.; Hariyati, H.; Nafidah, L.N.; Kustiningsih, N.; Nadyaningrum, V. The Role of Green Innovation between Green Market Orientation and Business Performance: Its Implication for Open Innovation. J. Open Innov. Technol. Mark. Complex. 2020, 6, 173. https://doi.org/10.3390/joitmc6040173
Tjahjadi B, Soewarno N, Hariyati H, Nafidah LN, Kustiningsih N, Nadyaningrum V. The Role of Green Innovation between Green Market Orientation and Business Performance: Its Implication for Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity. 2020; 6(4):173. https://doi.org/10.3390/joitmc6040173
Chicago/Turabian StyleTjahjadi, Bambang, Noorlailie Soewarno, Hariyati Hariyati, Lina Nasihatun Nafidah, Nanik Kustiningsih, and Viviani Nadyaningrum. 2020. "The Role of Green Innovation between Green Market Orientation and Business Performance: Its Implication for Open Innovation" Journal of Open Innovation: Technology, Market, and Complexity 6, no. 4: 173. https://doi.org/10.3390/joitmc6040173
APA StyleTjahjadi, B., Soewarno, N., Hariyati, H., Nafidah, L. N., Kustiningsih, N., & Nadyaningrum, V. (2020). The Role of Green Innovation between Green Market Orientation and Business Performance: Its Implication for Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 173. https://doi.org/10.3390/joitmc6040173