Corporate environmental ethics as a catalyst: Strengthening green innovation for sustainable competitive advantage
DOI:
https://doi.org/10.33395/owner.v10i1.3182Abstract
This study empirically evaluates the influence of green intellectual capital, green innovation, and environmental management on green competitive advantage, with corporate environmental ethics as a moderating variable. The associative hypothesis-testing method was used on primary data from a survey, distributing questionnaires to all employees of 238 industrial companies and 30 industrial companies in Indonesia, using purposive sampling, and the data were analyzed using the SEM method in AMOS software. Achieving Green competitive advantage through environmentally conscious human resources, strong corporate ethics, green structural and relational capital management, and sustainable organizational culture, although integrated implementation, is still a challenge in Indonesia. This research implication Incorporates environmental ethics, cultivates sustainable human resources, executes sustainability strategies, and emphasises the triple bottom line to attain a green competitive advantage; furthermore, the government can facilitate this through incentives, regulations, and the promotion of environmental awareness.
Downloads
References
Adams, W. J. (2009). The Life and Times of the Central Limit Theorem (Second Edi). Kaedmon Pub. Co., New York.
Aulia, A., Siahaan, M., & Siregar, J. K. (2025). Green Accounting and Environmental Performance on Financial Performance: Strategic Insights from the Mining Industry in Indonesia. Asian Journal of Environmental Research, 2(1), 16–28. https://doi.org/10.69930/ajer.v2i1.272
Barney, J. (1991). Firm Resource and Sustained Competitive Advantage. Journal of Management, Vol. 17(No. 1), 99–120. https://journals.sagepub.com/doi/10.1177/014920639101700108
Berry, M. A., & Rondinelli, D. A. (1998). Proactive Corporate Environmental Management: A New Industrial Revolution. The Academy of Management Executive, Vol. 12(No. 2), 38–50.
Borah, P. S., Dogbe, C. S. K., & Marwa, N. (2024). Green dynamic capability and green product innovation for sustainable development: Role of green operations, green transaction, and green technology development capabilities. Corporate Social Responsibility and Environmental Management, Vol. 32(No. 1), 911–926. https://doi.org/10.1002/csr.2993
Boubaker, L., Djebabra, M., & Saadi, S. (2014). Contribution of stakeholder theory in the management of environmental quality of Algerian firms: Case study of the SONATRACH Group, Algeria. Management of Environmental Quality: An International Journal, Vol. 25(No. 3), 335–351.
Byrne, B. M. (2022). Structural Equation Modeling With AMOS. Taylor & Francis. London. https://doi.org/10.4324/9781410600219
Chang, C. (2011). The Influence of Corporate Environmental Ethics on Competitive Advantage: The Mediation Role of Green Innovation. Journal of Business Ethics, Vol. 103(No. 2), 361–370.
Chang, C., & Chen, Y. (2012). The determinants of green intellectual capital. Management Decision, Vol. 50(No. 1), 74–94.
Chang, C., & Chen, Y. (2013). Green organizational identity and green innovation. Management Decision, Vol. 51(No. 5), 1056–1070.
Chen, Y.-S. (2008a). The Driver of Green Innovation and Green Image – Green Core Competence. Journal of Business Ethics, Vol. 81, 531–543.
Chen, Y.-S. (2008b). The Positive Effect of Green Intellectual Capital on Competitive Advantages of Firms. Journal of Business Ethics, Vol. 77(No. 3), 271–286. https://doi.org/10.1007/s10551-006-9349-1.
Chen, Y.-S. (2011). Green organizational identity: sources and consequence. Management Decision, Vol. 49(No. 3), 384–404.
Chen, Y.-S., & Chang, C.-H. (2013). The Determinants of Green Product Development Performance: Green Dynamic Capabilities, Green Transformational Leadership, and Green Creativity. Journal of Business Ethics, Vol. 116, 107–119.
Chen, Y.-S., Chang, C., & Wu, F. (2012). Origins of green innovations: the differences between proactive and reactive green innovations. Management Decision, Vol. 50(No. 3), 368–398.
Chen, Y.-S., Lai, S.-B., & Wen, C.-T. (2006). The Influence of Green Innovation Performance on Corporate Advantage in Taiwan. Journal of Business Ethics, Vol. 67, 331–339.
Cheng, M.-Y., Lin, J.-Y., Hsiao, T.-Y., & Lin, T. W. (2010). Invested resource, competitive intellectual capital, and corporate performance. Journal of Intellectual Capital, Vol. 11(No. 4), 433–450.
Chuang, S.-P., & Huang, S.-J. (2015). Effects of Business Greening and Green IT Capital on Business Competitiveness. Journal of Business Ethics, Vol. 128(No. 1), 221–231.
Deegan, C., Rankin, M., & Tobin, J. (2002). An examination of the corporate social and environmental disclosures of BHP from 1983?1997: A test of legitimacy theory. Accounting, Auditing & Accountability Journal, Vol. 15(No. 3), 312–343.
Donaldson, T., & Preston, L. E. (1995). The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications. The Academy of Management Review, Vol. 20(No. 1), 65–91.
Dowling, J. & Pfeffer, J. (1975). Organisational legitimacy: Sosial values and organisational behavior. Pacific Sociological Review, Vol. 18(No. 1), 122–136.
Eugénio, T. P., Lourenço, I. C., & Morais, A. I. (2013). Sustainability strategies of the company Timor: extending the applicability of legitimacy theory. Management of Environmental Quality: An International Journal, Vol. 24(No. 5), 570–582.
Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Pitman Publishing Inc. https://openlibrary.org/books/OL3170928M/Strategic_management
Huang, C., & Kung, F. (2011). Environmental consciousness and intellectual capital management: Evidence from Taiwan’s manufacturing industry. Management Decision, Vol. 49(No. 9), 1405–1425.
Intergovernmental Panel on Climate Change. (2024). AR6 Synthesis Report: Climate Change 2023. https://www.ipcc.ch/report/sixth-assessment-report-cycle/
Kaplan, D. (2020). Structural Equation Modeling Foundation and Extensions. SAGE Publications, Inc.
Lin, R.-J., Chen, R.-H., & Huang, F.-H. (2014). Green innovation in the automobile industry. Industrial Management & Data Systems, Vol. 114(No. 6), 886–903.
Lin, Y.-H., & Chen, Y.-S. (2017). Determinants of green competitive advantage: the roles of green knowledge sharing, green dynamic capabilities, and green service innovation. Journal of Quality and Quantity, Vol. 51, 1663–1685.
Lisnawati, L., & Siahaan, M. (2025). Can Green and Blue Thematic Financing Enhance Sustainability Value? Evidence from Southeast Asia. International Journal of Ethics and Systems. https://doi.org/10.1108/IJOES-11-2024-0374
Lusmeida, H., & Siahaan, M. (2025). Combined Effect of Company Risk Management , Intellectual Capital and Shareholder Rights on Sustainable Finance in Indonesian Financial Service Sector. International Journal of Sustainable Development and Planning, 20(8), 3453–3467. https://doi.org/doi.org/10.18280/ijsdp.200826
Magness, V. (2006). Strategic posture, financial performance and environmental disclosure: An empirical test of legitimacy theory. Accounting, Auditing & Accountability Journal, Vol. 19(No. 4), 540–563.
McWilliams, A., Siegel, D. S., & Wright, P. M. (2006). Guest Editors’ Introduction Corporate Social Responsibility: Strategic Implications. Journal of Management Studies, Vol. 43(No. 1), 1–18.
Mohamed, C., Sylvain, D., & Jacques, R. (2014). France’s new economic regulations: insights from institutional legitimacy theory. Accounting, Auditing & Accountability Journal, Vol. 27(No. 2), 283–316.
Nauli, T. D., & Mutiara, I. (2025). Asset misuse: Internal governance control restrains. Global Research Review in Business and Economics, 11(2), 67–74.
Otola, I., Ostraszewska, Z., & Tylec, A. (2013). New directions of development of resource-based view in creating a competitive Advantage. Business Management Dynamics, Vol. 3(No. 2), 26–33.
Pemerintah Republik Indonesia. (1997). Law Number 23 Year 1997 Concerning Environmental Management. State Gazette of the Republic of Indonesia 1997, No. 1, 21. http://ciptakarya.pu.go.id/dok/hukum/uu/uu_23_1997.pdf
Ramlogan, R. (1997). Environment and human health: a threat to all, Environmental. Management and Health, Vol. 8(No. 2), 51–66.
Schumacker, R. E., & Lomax, R. G. (2022). A Beginner’s Guide to Structural Equation Modeling (4th Editio). Routledge.
Sekaran, Uma & Bougie, R. J. (2016). Research Methods for Business: A Skill Building Approach (7th ed.). John Wiley & Sons, Inc.
Siahaan, M. (2025). Use Big Theory Clarifies Financial Performance: The Role of Internal Mechanisms Control. Journal of Accounting and Strategic Finance, 8(1), 94–109. https://doi.org/10.33005/jasf.v8i1.596
Siahaan, M., Nauli, T. D., & Siahaan, B. P. (2024). Can Internal Mechanisms Control Detect Corruption Through Fraudulent Behaviour?? AFRE Accounting and Financial Review, Vol. 7(No. 1), 1–8. https://doi.org/10.26905/afr.v7i1.11893
Siahaan, M., Suharman, H., Fitrijanti, T., & Umar, H. (2023a). When internal organizational factors improve detecting corruption in state-owned companies. Journal of Financial Crime, Vol. 31(No. 2), 376–407. https://doi.org/10.1108/JFC-11-2022-0292
Siahaan, M., Suharman, H., Fitrijanti, T., & Umar, H. (2023b). Will the integrated GRC implementation be effective against corruption? Journal of Financial Crime, 30(No. 1), 24–34. https://doi.org/10.1108/jfc-12-2021-0275
Steinmann, H. (2008). Towards a conceptual framework for corporate ethics: problems of justification and implementation. Society and Business Review, Vol. 3(No. 2), 133–148.
Swartz, N., & Firer, S. (2005). Board structure and intellectual capital in South Africa. Meditari Accountancy Research, Vol. 13(No. 2), 145–166.
Tan, K., & Cross, J. (2012). Influence of resource?based capability and inter?organizational coordination on SCM. Industrial Management & Data Systems, Vol. 112(No. 6), 929–945.
Tran, B. (2008). Paradigms in corporate ethics: the legality and values of corporate ethics. Social Responsibility Journal, Vol. 4(No. 1), 158–171.
Tseng, M. L., W, R., Chiu, A. S. F., Geng, Y., & Lin, Y. H. (2013). Improving performance of green innovation practices under uncertainty. Journal of Cleaner Production, Vol. 40, 71–82.
Warnier, V., Weppe, X., & Lecocq, X. (2013). Extending Resource-Based Theory: Considering Strategic, Ordinary and Junk Resources. Management Decision, Vol. 51(No. 7), 1359–1379.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Magda Siahaan, Edi Sopyan, Theonino David N, Hofandrik Lase
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
