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Review of Managerial Science ISSN 1863-6683 Rev Manag SciDOI 10.1007/s11846-015-0173-9

Barriers to green innovation initiativesamong manufacturers: the Malaysian case

Mirza Abdullah, Suhaiza Zailani,Mohammad Iranmanesh &K. Jayaraman

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ORIGINAL PAPER

Barriers to green innovation initiativesamong manufacturers: the Malaysian case

Mirza Abdullah1 • Suhaiza Zailani2 •

Mohammad Iranmanesh2 • K. Jayaraman3

Received: 3 October 2014 /Accepted: 4 May 2015! Springer-Verlag Berlin Heidelberg 2015

Abstract This study investigated the internal and external barriers to green in-novation initiatives among Malaysian manufacturers. Data was gathered through asurvey of 153 manufacturing companies in Malaysia. Data was analyzed using thepartial least squares technique. Results indicated that the barriers to green products,processes, and systems innovations are different. Issues of environmental resources,attitude and perception, business practices, government support, and customer de-mand were found to be the barriers to green product innovations, whereas attitudeand perception, business practices, poor external partnerships, insufficient infor-mation, lack of customer demand, and environmental commercial benefits weredetermined to be the factors that negatively affect green process innovations. Asregards green system innovation, environmental resources, attitude and perception,business practices, technical barriers, government support, and environmental andcommercial benefits presented themselves as the internal and external barriers thatneed to be addressed. The results have important implications for managers ofmanufacturers that have plans of promoting green products, processes, and systeminnovations.

& Mohammad [email protected]

Suhaiza [email protected]

K. [email protected]

1 School of Management, University Sains Malaysia (USM), 11800 Penang, Malaysia

2 Faculty of Business and Accountancy, University of Malaya (UM), 50603 Kuala Lumpur,Malaysia

3 Graduate School of Business, Universiti Sains Malaysia (USM), 11800 Penang, Malaysia

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Rev Manag SciDOI 10.1007/s11846-015-0173-9

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Keywords Barriers ! Green innovation ! Manufacturers ! Malaysia

Mathematics Subject Classification 62G08

1 Introduction

In recent years, the importance of the environmental agenda for the industry hasbeen rising exponentially at the international level. Additionally, increasingconsumers’ awareness on the environmental impact of their consumption choicesand their willingness to reduce their ecological footprint (Harrison et al. 2005) hascreated new market opportunities for manufacturers. Furthermore, increasinglyrestrictive policies punishing environmentally harmful behaviors and the action ofNGOs, which has directed and increased attention toward manufacturers’ pollutingactivities (Porter and van der Linde 1995), have encouraged manufacturers tocontrol the effects of their activities on the environment to reduce reputation risksand avoid additional costs. Thus, green innovation has become one of the moreimportant strategic tools used to obtain sustainable development in manufacturingindustries in response to the increasing environmental pressure.

Despite the importance and benefits of green innovation, manufacturers’involvement in green innovation remains below expectations. Certain manufacturersare deterred from engaging innovation because of the difficulties involved andremain locked into established routines. Other firms actually attempt to innovate andinvest in green innovation, but they may fail to bring new green products orprocesses to the market because they are unable to overcome these barriers.Successful green innovation depends on a firm’s ability to overcome these greeninnovation barriers. However, Malaysian manufacturing companies’ low awarenessof green innovation barriers prevents them from achieving the benefits of greeninnovation (Pawanchik and Sulaiman 2010). Therefore, investigating the potentialbarriers to green innovation in Malaysia is important because limited discussion isrelated to this specific context in the literature at present. In addition, the Malaysianmanufacturing industry is still in its developing stages and has significant negativeenvironmental impacts. Hence, the barriers to green innovation should be pursuedaggressively to accommodate the current environmental situation.

Distinguishing barriers to green innovation among manufacturers is important fortwo reasons. First, a distinction is crucial from an innovation policy perspective forpolicy makers to be able to design appropriate policies that address systemic failurespreventing firms from engaging in green innovation activities; they need to identifywhy firms are excluded from the innovation contest (Woolthuis et al. 2005;Chaminade and Edquist 2006). Second, from the perspective of innovationmanagement, identifying the barriers commonly faced by firms engaging in greeninnovation activities is important, especially those that result in failure to introducenew green products or processes in the market. Such identification should providecrucial insights for managers to inform corporate strategies to overcome obstacles togreen innovation (D’Este et al. 2008).

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Green innovation can be classified into three main categories: green productinnovation, green process innovation, and green system or managerial innovation(Chen et al. 2006; Chen 2008). Potential barriers to green innovation can differamong different types of innovations. In other words, certain barriers might deterfirms from green product innovation, whereas others might deter them from greenprocess innovation. The present study addresses this research question: what are thebarriers (internal and external) of each type of green innovation among manufac-turers in Malaysia that have not been discussed in the literature? The results areexpected to provide primary guidelines for managers of manufacturers andpolicymakers in addressing barriers to green innovation initiatives. The adoptionof green innovation may increase among manufacturers by addressing these barriers.

The rest of the paper is organized as follows: Sect. 2 introduces green innovationinitiatives, barriers to innovation initiatives, and barriers to green supply chainmanagement (GSCM) initiatives. Furthermore, the section develops the conceptualmodel. In Sect. 3, hypotheses are developed. Section 4 presents the researchmethods including data collection, sample, measure of constructs, and analysismethod. Section 5 presents the results. Section 6 includes the discussions. Themanagerial and policy implications of the study are presented in Sect. 7, followedby the limitations and recommendations to future studies in Sect. 8.

2 Literature review and model conceptualization

2.1 Green innovation initiatives

Green innovation is the exploitation, production, or assimilation of a service,production process, product, or management and system methods novel to theorganization adopting or developing them (Kemp and Pearson 2008). Pollution,environmental risks, and other negative effects on resource use (including energyuse) throughout its life cycle are significantly reduced by green innovation.Similarly, Wong (2013) suggest that the decreased environmental impact of firms isfacilitated by green innovation, thereby enabling firms to integrate environmentalbenefits and meet eco-targets. Although the importance of green innovation hasbeen discussed extensively (e.g., Zailani et al. 2014; Wong 2013), limitedunderstanding on green innovation barriers can be gleaned from the literature.

Green product innovation, green process innovation and green management orsystem innovation comprise the three main categories into which green innovationis classified (Chen et al. 2006; Chen 2008; Madrid-Guijarro et al. 2009). Greenproduct innovation was identified by Chen et al. (2006) as introducing significantlyimproved or new products because of environmental concerns (e.g., green design,non-toxic raw materials, pollution prevention, energy savings, waste minimization,and waste recycling). Green process innovation refers to producing environmentallyfriendly products that meet eco-targets by modifying manufacturing processes andsystems. Such modification includes waste recycling, energy savings, and pollutionprevention (Meeus and Edquist 2006; Kammerer 2009). Green system innovationrefers to the process of identifying, implementing, and monitoring pioneering ideas

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that strengthen green environmental performance of a company, enhancingcompetitiveness in the process.

Green product, process, and system innovations are different in nature (Chenet al. 2006; Kammerer 2009). In green product innovation, the degree of a newgreen product’s competitiveness should be evaluated by the research anddevelopment unit. Consumer needs must also be well understood (Tseng et al.2013). Moreover, the feasibility of green products, in terms of commercial,economic, technical aspects should be evaluated. The creation of knowledge(R&D), the creativity and skills of employees, systems for either explicit or tacittechnological protection, learning curves, and the practical criticism of routinesmust be fostered by manufacturers to enhance green process innovation (Athaideet al. 1996; Rao and Holt 2005; Chen et al. 2006). Manufacturers must be able toevaluate and install an environmental management system and ISO 14000 series;consume less gas, water, petrol, and electricity; provide environmental awarenessseminars and training for stakeholders; and strictly control hazardous waste andemissions to enhance green system innovation (Zhu et al. 2010). As the aspects andcriteria of each green innovation are different, we expect the barriers to practicingthem, which are not investigated in the previous studies, to be different.

2.2 Barriers to innovation initiatives

Barriers can be considered internal and external. Issues outside the organizationcomprise external barriers, whereas issues within the organization that will hinder acompany from achieving its innovation initiatives are known as internal barriers(Walker et al. 2008). Although studies on the barriers to green innovation arelacking in the literature, many studies are conducted on the barriers to generalinnovation (e.g., Madrid-Guijarro et al. 2009; Holzl and Janger 2014) and on thebarriers to GSCM initiatives (e.g., Wooi and Zailani 2010; Zailani et al. 2011;Govindan et al. 2014), which can be used as the groundwork.

Innovation barriers are issues that prevent or hamper the firm’s innovativeactivities (Sandberg and Aarikka-Stenroos 2014). Savignac (2008), using data onFrench manufacturing firms based on the Community Innovation Survey (CIS)methodology, shows that financial constraints significantly hinder a firm’slikelihood to implement innovative projects. Tiwari et al. (2007), based on theDutch CIS, find a strong and significant deterrent effect of perceived financialobstacles on the R&D investment.

The involvement of many actors with difficult-to-reconcile stakes and amultiplicity of interactions characterize innovation processes (Afuah and Bahram1995; Hadjimanolis 2003). Potential barriers may arise from such a situation. Forexample, the so-called TCOS model is a framework addressing radical, controversialinnovation, indicates that technological, commercial, organizational, and socialuncertainties are barriers to be overcome for successful innovation (Hall and Martin2005; Hall et al. 2011). The TCOS model evaluates innovation under socialuncertainties, that is, innovation that addresses stakeholder concerns that areconflicting and difficult-to-reconcile (Afuah andBahram1995;Hall andMartin 2005).

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In terms of innovation under social uncertainty, the effect of the externalenvironment is particularly critical. Such a situation entails potentially controversialeffects for third parties (Hall and Martin 2005; Hall and Vredenburg 2012). Toanalyze social uncertainties, stakeholder theory (Freeman, 2004; Mainardes et al.2011) was used. Considering that stakeholders affect innovation, this theorystructures the identification of external innovation barriers related to externalstakeholders (Nambisan 2002).

A more comprehensive understanding of increasingly complex environments isfacilitated by stakeholder theory (Waxenberger and Spence 2003) by identifyingactors with the opportunity, willingness, and capacity to benefit or threaten theorganization (Savage et al. 1991). Stakeholders are affected by the firm or have thepotential to affect it (Fassin 2009), and are considered ‘‘key actors’’ (Post et al.2002).

The innovation value-added chain indicates that the key stakeholders who areaffected by an innovation or can affect an innovation are suppliers, customers, andcomplementary innovators (i.e., competitors; Afuah and Bahram 1995). Empiricalstudies have confirmed the existence of innovation barriers along the innovationvalue-added chain such as deficient technical support from vendors (e.g., Baldwinand Lin 2002), limited supply (Carlsen and Edwards 2008), competitive pressure(Ozgen and Olcer 2007), and lacking customer responsiveness (Galia and Legros2004; Tourigny and Le 2004).

In addition, if innovation goals are not aligned with organizational strategy, thenthe innovation competes with different priorities. Organizational strategy shapesorganizational structure (Wolf and Egelhoff 2001), and conversely, the strategyused by an organization influenced by the existing structure (Pertusa-Ortega et al.2010). Innovation barriers at the organizational level can be created by bothstrategic and structural issues (e.g., Galia and Legros 2004; Kim et al. 2005; Ren2009; Tourigny and Le 2004).

The ability to recognize value and incorporate new information are required todevelop an organization’s innovative capabilities. This absorptive capacity (Cohenand Levinthal 1990) relates to innovation barriers in terms of a lack oforganizational learning, including organizational culture and inappropriate trainingwithin the organization (e.g., Baldwin and Lin 2002). Several studies have identifiedinnovation barriers related to organizational culture (e.g., Anumba et al. 2006;Storey 2000; Vermeulen 2004; Zerjav and Javernick-Will 2009).

Holzl and Janger (2014) studied 18 European countries and categorizedinnovation barriers into the following: (1) financial barriers to innovation (lack offinance from sources outside your enterprise), (2) skill barriers to innovation (lack ofqualified personnel), (3) lack of information on technology, (4) lack of informationon markets, and (5) lack of innovation partners (difficulty in finding cooperationpartners for innovation). In another study, Plotnikova et al. (2015) grouped theinnovation barriers as follows: (1) infrastructural, (2) connected with the form ofinnovation activity support, (3) in the sphere of education and management, (4)determined by actions of the state, and (5) informational.


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2.3 Barriers to GSCM initiatives

Literature survey has emphasized various kinds of barriers that hinder anorganization from adopting GSCM initiatives. Giunipero et al. (2012) found (1)lack of consensus at the CEO level, (2) costs of sustainability and economicconditions, (3) lack of sustainability standards and appropriate regulations, and (4)misalignment of short term and long term strategic goals as the barriers to GSCMinitiatives. Wooi and Zailani (2010) investigated the barriers that hinder the firms inMalaysia from implementing GSCM and found that resources is the key barrier thatimpedes the adoption of GSCM initiative, whereas the technical barrier is expectedto be the key barrier for the firms in Malaysian manufacturing sectors. In anotherstudy, Muduli et al. (2013) categorized the barriers to GSCM initiatives as follows:(1) information gap (lack of management awareness regarding cost savings from theimplementation of GSCM, lack of management awareness about new technologies,lack of employee awareness about occupational health hazards, and inadequateexchange of information among departments involved), (2) society (lack ofcommunity pressure, resistance by employees to the adoption of moderntechnology, absence of green consumer awareness, lack of employee motivation),(3) poor legislation (lack of enforcement, lack of strict supervision, corruption, andchanging regulations from changing political climate), and (4) capacity constraints(financial constraints, technical constraints, productivity or operational constraints,lack of expertise or human resources, and lack of infrastructure for the sustainabilityof waste management or disposal methods). Jayant and Azhar (2014) studied thebarriers to implementing GSCM practices and found 20 barriers to GSCMinitiatives, namely, cost implication, lack of IT implications, poor organized culturein adopting GSCM, lack of top management commitment in adopting GSCM,resistance to advance technology adoption, lack of government support to adoptGSCM, lack of knowledge about green practice, lack of technical expertise, marketcompetition, less awareness of customer about GSCM, lack of environmentalawareness to the supplier, fear of failure, pollution in industries, non-availability ofbank loans to encourage green product, lack of training courses about implementingGSCM, lack of recycling and reuse efforts of organization, lack of sustainabilitycertification (ISO 14001), cost of disposal and hazardous products, lack ofawareness about reverse logistics adoption, and lack of corporate social responsi-bility. Pellegrino and Savona (2013) categorized the barriers to innovation into costfactors, knowledge factors, market factors, and regulation factors.

2.4 Model conceptualization

The recognized internal barriers to innovation and GSCM initiatives were groupedinto seven categories: (1) attitude and perception barriers (employee resistance tochange and managers resistance to change), (2) information-related barriers (lack ofawareness and relevant information on market and technology and uncertainty aboutenvironmental regulations), (3) technical barriers (poor R&D), (4) lack of financialresources, (5) process-related barriers (high innovation cost, very high risks, anddifficulty in controlling the innovation cost), (6) environmental resources barriers

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(lack of skilled personnel, turnover of qualified employees, lack of internalemployee training, insufficient capacity in time), and (7) business practice barriers(conflicts with functional requirements and no long term strategy). The recognizedpotential external barriers were grouped into six categories: (1) poor externalpartnership, (2) insufficient information (insufficient market information, insuffi-cient technological information), (3) lack of government support, (4) lack ofcustomer demand, (5) lack of external fund, and (6) environmental commercialbenefits (economic turbulence, easy to copy, commercial disadvantage, and noalternative available).

Determining whether the recognized barriers in previous studies on generalinnovation or GSCM initiatives will be suitable to reflect the barriers to greeninnovation initiatives in Malaysia is important because the aim of this study is todetermine the barriers to green innovation among manufacturing companies in thecountry. Therefore, in depth interviews were conducted in five organizations inMalaysia (interview methodology details are discussed in the methodology section).

The analysis of the interviews shows that the most prominent internal barriers arebusiness practices, environmental resources, attitude and perception, information-related barriers, and technical-related barriers. The information-related internalbarriers will be omitted here and have been taken as an item under external barriersbecause they are almost the same and are interrelated with the external barriers. Inaddition, the analysis shows that government support, information-related types,partnership, environmental commercial benefits, and customer demand are the mostprominent types of green innovation initiatives in Malaysia. Therefore, in the presentstudy, the four prominent internal barriers (business practices, environmentalresources, attitude and perception, and technical barriers) and five prominent externalbarriers (government support, information-related barriers, partnership, environ-mental commercial benefits, and customer demand) were considered potentialinternal and external barriers to green innovation initiatives in the model (Fig. 1).

3 Hypothesis development

3.1 Environmental resources barriers

Experts in environmental management are important in building sustainableorganizations. The analysis of past literature shows that the organizations with alack of skilled personnel in the area of environmental management will put lesseffort into innovation initiatives (Silva and Leitao 2007) because of poor knowledgeand experience. In addition to this finding, trained employees do not stay long in anorganization to help build green management. The focus on short-term tasks andpriorities by organizations will lead to low emphasis on long-term innovationinitiatives (Ylinenpaa 1998), which will further hinder the adoption of greeninnovation because related tasks will cause a burden for the employees and will leadto a lower success rate. The lack of qualified staff can be a serious constraint to thedevelopment of the innovation initiatives in an organization (Hoffman et al. 1998).Therefore, the following hypothesis is developed:


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H1: Environmental resource barriers have a negative effect on the adoption of(a) green products, (b) green process, and (c) green system innovation initiatives inMalaysian manufacturing companies.

3.2 Attitude and perception barriers

People tend to choose the false boundaries and limitations created by the past andare reluctant to attempt new challenges because of their previous experience.Therefore, progress is impossible without this change in mindset, and those whocannot change their minds cannot change anything. Organizational culture isresponsible in building the attitude and perception of employees in companies. Insmall and medium industries, firms’ resistance to adopt innovation can obviously bea direct indicator that the organizational culture failed in supporting the innovationinitiatives (McAdam et al. 2004). Employees in organizations resist change becauseof internal factors, such as insufficient communication, existing poor corporatenorms and culture, poor human resource practices, and lack of support andcommitment from top management teams (Zwick 2002). Small organizations do notperceive environmental related innovation as part of their responsibility and believethat it cannot help to improve their business or competitive advantage in the market(van Hemel and Cramer 2002). Therefore, the following hypothesis is developed:

Internal Barriers-EnvironmentalResources-Attitudinal andPerception-Business Practices-Technical

External Barriers-Poor ExternalPartnership-Insufficient Information-Lack of GovernmentSupport-Lack of CustomerDemand-EnvironmentalCommercial Benefit

Green InnovationInitiatives

-Product Innovation-Process Innovation-System Innovation

Fig. 1 Research framework

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H2: Attitude and perception barriers have a negative effect on the adoption of(a) green product, (b) green process, and (c) green system innovation initiatives inMalaysian manufacturing companies.

3.3 Business practices barriers

As mentioned by Ono (1988), the track record for organizations to implementvarious initiatives or strategies such as ISO, SCM, JIT, Lean, and Six Sigma in anevent to control and improve the key performance indicators (financial andoperational outcomes) of the company can help in gaining core competenciesbesides being competitive in the market. Senge (2006) also mentioned thatorganizations with a good track record of implementing the above-mentionedstrategies will help organizations to become learning organizations. Liebowitz andBeckman (1998) mentioned that the next generation of corporations will integratecore competencies and expertise with organizational learning, new organizationalstructures, compensational schemes, and innovative information technologies tocreate long-term sustainable competitive advantages. Additionally, the implemen-tation of any new initiatives will be easier in this type of organization because it hasbetter chances and abilities to focus attention, effort, and energy in implementinginnovative activities, which are related to advancing environmentally consciousmanufacturing (ECM) practices, rather than in companies that do not have anyexperience in various business practices (Florida et al., 2001). Therefore, thefollowing hypothesis is developed to further analyze the condition:

H3: Business practices barriers have a negative effect on the adoption of (a) greenproduct, (b) green process, and (c) green system innovation initiatives in Malaysianmanufacturing companies.

3.4 Technical barriers

Lack of technical information and knowledge will lead to difficulties in findingalternative solutions in designing new technologies, materials, operations, andindustrial processes related to green innovation initiatives (van Hemel and Cramer2002; Ylinenpaa 1998). Lack of technical expertise and knowledge is alsoconsidered to be a major barrier in the preview study conducted by the researchers(Silva et al. 2008; Perron 2005). In a study conducted in Malaysia, innovation in thecountry was discovered still to be at its infancy compared to other countries(Pawanchik and Sulaiman 2010). Revell and Rutherfoord (2003) reported that thelack of technical knowledge and expertise has been found to have a negativerelationship toward the green innovation initiatives of an organization, which hasbeen supported by the findings by Lai et al. (2003) mentioning that if anorganization has more capabilities in R&D and innovation compared to theircompetitors, then they will embark on innovative activities. Innovation will alsohelp organizations to gain the first-mover benefits, which in turn increases theirmarket share and revenue (Lai et al. 2003). Therefore, the following hypothesis isdeveloped to further analyze the condition:


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H4: Technical barriers have a negative effect on the adoption of (a) green product,(b) green process, and (c) green system innovation initiatives in Malaysianmanufacturing companies.

3.5 Poor external partnership

Building external partners is important to support the green innovation initiativesthat an organization is embarking. Ylinenpaa (1998) mentioned that finding partnersor suppliers to cooperate with and work together on the green innovation initiativesis difficult among small firms in Sweden. Organizations have difficulties in findinggood external partnerships because suppliers are not ready to invest in redesigningthe current product into a green product (Hadjimanolis 1999). The low participationof suppliers can be attributed to the unknown demand, higher cost for materialproduction to meet green specifications, and the expensive cost of redesigning(Porter and van der Linde 1995; Chen et al. 2006). Finding an external partner whowants to invest in developing green innovation material or technologies is verydifficult (Hadjimanolis 1999). Therefore, the following hypothesis is developed tofurther analyze the condition.

H5: Poor external partnerships have a negative effect on the adoption of (a) greenproduct, (b) green process, and (c) green system innovation initiatives in Malaysianmanufacturing companies.

3.6 Insufficient information

Weak external market and technological information will have a negative effect ongreen innovation (Woolman and Veshagh 2006). Madrid-Guijarra et al. (2009)mentioned that the insufficient availability of market and technological informationon environmentally friendly products and processes will prevent firms fromproceeding to the next level of product or process innovations because they feel veryuncertain about their product and its demand in the market. Therefore, the followinghypothesis is developed to further analyze the condition:

H6: Insufficient information has a negative effect on the adoption of (a) greenproduct, (b) green process, and (c) green system innovation initiatives in Malaysianmanufacturing companies.

3.7 Lack of government support

The government does not support green innovation initiatives in Malaysia byproviding grants, loans, or subsidies to encourage organizations to go green byadopting initiatives. Piatier (1984) and Runhaar et al. (2008) discovered that a lackof government support can be a de-motivating factor for organizations to embark oninnovation initiatives. A study conducted by Demirbas (2010) on Turkish SMEssuggests that the lack of government R&D and technology policy as a formal barrierto innovation has a significant effect on the entrepreneur’s propensity forinnovation. Poor support by governments is practically due to a lack of knowledge

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on green production or environmental leadership (Runhaar et al. 2008) and lack ofexpertise that would enable them to share green knowledge. Therefore, thefollowing hypothesis is developed to further analyze the condition.

H7: Lack of government support has a negative effect on the adoption of (a) greenproduct, (b) green process, and (c) green system innovation initiatives in Malaysianmanufacturing companies.

3.8 Lack of customer demand

The willingness of the customer to pay more for green products will secure thefuture demand of green products of an organization. Moreover, the lack ofsignificant benefits that the green product brings to the company will hindermanufacturers from engaging green innovation efforts. The lack of customers’responsiveness to new products will show organizations that have fewer propen-sities to innovate (Silva and Leitao 2007). Organizations believe that if the marketdoes not accept their new products, then they have no incentive to take oninnovation initiatives because of time, cost, and resource constraints. Therefore, thefollowing hypothesis is developed to further analyze the condition:

H8: Lack of customer demand has a negative effect on the adoption of (a) greenproduct, (b) green process, and (c) green system innovation initiatives in Malaysianmanufacturing companies.

3.9 Environmental commercial benefit

If an organization does not have knowledge and expertise on green innovation, thenit will not embark on green innovation initiatives. When an organization perceivesno clear environmental commercial benefits gained from green innovationinitiatives (van Hemel and Cramer 2002), efforts to go green will fail. Whenorganizations already perceive that green innovation does not bring them anybenefits, green innovation initiatives will be further reduced in firms (Woolman andVeshagh 2006). Therefore, the following hypothesis is developed to further analyzethe condition:

H9: Lack of environmental commercial benefits has a negative effect on theadoption of (a) green product, (b) green process, and (c) green system innovationinitiatives in Malaysian manufacturing companies.

4 Research methodology

Data collection consisted of two separate phases. Initially, semi-structuredinterviews were conducted with the managers of five manufacturing companies tofind out whether the identified variables in the literature will be suitable to reflect thesituation of manufacturing-based organizations in Malaysia. Next, a surveyquestionnaire was used to gather data for statistical hypothesis testing. In the


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following subsections, we discuss the data collection, measure of constructs, andanalysis method.

4.1 Data collection and the sample

The sampling frame of this study consists of manufacturing companies in Malaysiaat a business level that comprises five different sectors, namely, food and beverageproducts, rubber and plastics, chemical products, electrical and electronics, andfabricated and basic metals. These five industries were chosen because they haverecorded the fastest growth rate in terms of the growth of their industry by sub-sectors (FMM 2012). In addition, the manufacturing companies in Malaysia werechosen for the sample because they will be highly involved in embarking on greeninnovation compared to other companies. The sampling list was obtained from theFederation of Malaysian Manufacturers (FMM). The respondents comprisedmanufacturing companies operating in Malaysia, which are mainly large companiesor multinational corporations. The data shows approximately 1500 large-scaleindustries listed in the FMM directory. The survey questionnaires were mailed to500 members of the potential sample.

This study targeted CEOs, general managers, managing directors, directors,managers or persons-in-charge of environmental health and safety departments,environmental protection departments, production and operations departments, newproduct introduction departments, procurement or material departments, marketingdepartments, and R&D departments in Malaysian manufacturing companies. Thesepeople were chosen because they have first-hand knowledge and informationregarding the green issues, green innovation initiatives, and continuous greenprogress in environmental performance of the manufacturing companies. Thesurvey was conducted using a structured mail questionnaire directed to thecorresponding respondents in each firm. Out of a total of 500 distributedquestionnaires, 153 usable responses were received, resulting in an effectiveresponse rate of 30.7 % (153/500). The sample was estimated to be effective at the95 % confidence level with a margin of error of ±7.5 %.

In measuring the power of the 153 samples, G*Power version 3.1.9.2 was used(Faul et al. 2009). Using G*Power with an effect size of 0.15 and statisticalsignificance (a level) of 0.05 yielded a power of 0.928, which is above 0.80 andsignifies a satisfactory degree of the power of the sample in the present study (Chin2001). These results show that the proposed sample size of the present studyindicates the requisite power to reject the null hypotheses of the study (Faul et al.2009).

In ensuring that the received responses are representative of the sample firms, anon-response bias was conducted following the procedure suggested by Armstrongand Overton (1977). The last quarter of responses received were assumed to be verysimilar to non-respondents because their replies took the longest time and the mosteffort to obtain. Therefore, the last quartile was compared to the first three quartiles.At the 5 % significance level, no differences between the ‘‘early’’ and ‘‘late’’respondents were detected, suggesting that non-response bias was not a problemwith regard to the data collected in this study.

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4.2 Measure of constructs

The questionnaire is divided into five sections: company’s basic information,internal barriers (environmental resources, attitude and perception, businesspractices, and technical barriers), external barriers (poor external partnership,insufficient information, lack of government support, lack of customer demand, andenvironmental commercial benefit), green innovation initiatives (product innova-tion, process innovation, and system innovation), and respondent’s personalinformation. The items were measured using a five-point Likert scale anchoredby ‘‘strongly disagree’’ and ‘‘strongly agree’’ for the internal and external barriersand by ‘‘not at all’’ and ‘‘very high’’ for green innovation items. In ensuring contentvalidity, the items were adopted from previous studies as follows: environmentalresources (Woolman and Veshagh 2006; van Hemel and Cramer 2002), attitude andperception (Madrid-Guijarro et al. 2009), business practices (Chen 2008; Floridaet al. 2001; Woolman and Veshagh 2006), technical (Lai et al. 2003; Perron 2005;Freel 2000), poor external partnership (Ylinenpaa 1998; Hadjimanolis 1999),insufficient information (Woolman and Veshagh 2006; Madrid-Guijarro et al.2009), lack of government support (Madrid-Guijarro et al. 2009; Runhaar et al.2008), lack of customer demand (Woolman and Veshagh 2006; Silva and Leitao2007), environmental commercial benefit (Woolman and Veshagh 2006; Runhaaret al. 2008), product innovation (Lai et al. 2003; Sarkis et al. 1998), processinnovation (Lai et al. 2003), and system innovation (Lai et al. 2003; Woolman andVeshagh 2006).

4.3 Analysis

The structural equation modeling technique of PLS was applied using SmartPLSVersion 3.0 to test the research model. This technique has been used because of itsappropriateness for the exploratory nature of this study (Hair et al. 2011). Inaddition, PLS is the preferred method when the sample size is small, and the modelis completed (Hair et al. 2013).

The two-step approach was used in data analysis as suggested by Hair et al.(2013). The first step involves the analysis of the measurement model, whereas thesecond step tests the structural relationships among the latent constructs. The two-step approach aims to establish the reliability and validity of the measures beforeassessing the structural relationship of the model.

5 Results

5.1 The sample

The descriptive analysis shows that about 88.2 % of the respondents’ companies arefrom production and manufacturing of goods and the rest are from assemblymanufacturing of ICT items, telecommunication, agricultural or live stock goodsand related to mining (manufacture chemical and Substrate). Regarding the quality


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of system qualification (status of ISO certification), almost all the respondents’companies have ISO certification (94.1 %) such as ISO 9000, 9001 and 14000. Inaddition, nearly half of the companies have a structured green innovation plan orpolicy put in place by the company. A majority of the companies (68.6 %) havebeen operating more than 10 years in Malaysia and have fully foreign-basedownership (72.5 %).

5.2 Measurement model results

The reliability and validity of the reflective constructs were assessed. Compositereliability (CR) needs to be assessed in connection with internal reliability which issimilar to Cronbach’s Alpha. The CR of all constructs were above 0.7 (Table 1),satisfying the Hair et al. (2013) rule of thumb. Hair et al. (2010) suggested acceptingitems with loadings of at least 0.6. Since the loadings associated with each of thescales were all greater than 0.6, individual item reliability was judged acceptable.The convergent validity was evaluated using the average variance extracted (AVE).The AVE of all constructs was above 0.5, signifying a satisfactory degree ofconvergent validity (Fornell and Larcker 1981).

To assess the discriminant validity of the constructs, two approaches were used.First, the cross loadings of the indicators were examined. This revealed that noindicator loads higher on an opposing construct (Hair et al. 2012). Second,following the Fornell and Larcker (1981) criterion, each construct’s square root ofAVE exceeded the intercorrelations of the construct with the other constructs in themodel (Table 2). Both analyses confirmed the discriminant validity of all constructs.As seen in Table 2, lack of poor external partnership is the barrier that highlyperceived by manufacturing companies in Malaysia (mean = 3.359) followed bylack of customer demand (mean = 3.346), business practice barriers(mean = 3.307), and technical barriers (mean = 3.202). Moreover, green productinnovation in the most common type of innovation among manufacturingcompanies in Malaysia.

5.3 Assessment of the structural model

With the satisfactory results in the measurement model, the structural model wasevaluated subsequently. The predictive accuracy of the model was evaluated interms of the portion of variance explained. The results suggest that the model iscapable of explaining 59.0 % of the variance in green product innovation, 70.6 % ingreen process innovation, and 43.7 % in green system innovation. Besidesestimating the magnitude of R2, researchers have recently included predictiverelevance developed by Stone (1974) and Geisser (1975), as additional model fitassessment. This technique represents the model adequacy to predict the manifestindicators of each latent construct. Stone-Geisser Q2 (cross-validated redundancy)was computed to examine the predictive relevance using a blindfolding procedure inPLS. Following the guidelines suggested by Chin (2010), a Q2 value of greater thanzero implies the model has predictive relevance. In the present study, a value of0.408 was obtained as an average cross-validated redundancy (for all endogenous

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Table 1 Measurement model evaluation

Variables Items Factorloadings

CR AVE

Environmentalresources barriers(ERB)

Face shortage of in-house skilled personnel to carryout green initiatives

0.934 0.953 0.801

Trained employees in green technology don’t staylong with the organization (people resigning fromthe organization)

0.844

Is not willing to spend money on training anddevelopment of employees for green innovationinitiatives

0.943

Face problem in getting information on greeninnovation and also the willingness of employees tolearn is very low

0.894

Day-to-day work is very heavy and got no time forgreen innovation activity

0.855

Attitudinal andperception barriers(APB)

Employees and manager only identify opportunity tochange if adopting green innovation initiativescreates gain and competitive advantage in themarket

0.834 0.906 0.707

Employees and manger prefer doing the job the sameway and reluctant to change

0.792

The employees and manager only change when thereis economic turbulence which act as a stimulus thatencourage my firm to become more innovative(remedial change)

0.897

The employees and manager are complacent due tocurrent high product mix which yields high profit

0.836

Business practicesbarriers (BPB)

Have no cost reduction initiatives or strategy in theorganization related to green product

0.912 0.900 0.647

Have a systematic plan to establish long-termstrategy for green innovation initiatives andincorporate it into business plan

0.834

Have initiated well planned previous learningprograms in order to increase in-house knowledgeon green innovation initiatives

0.746

Keep abreast of new solutions emerging in the fieldof green technology and new innovation practices

0.878

Adopted many manufacturing excellence practices(GSCM, ISO, JIT, TQM, LEAN, SIX SIGMA etc.)to improve business process, inventory, product,and eliminate waste

0.615

Technical barriers(TB)

Introduces new products on time to market to achievefirst mover benefits

0.815 0.948 0.785

Information related to green innovation technicalsupport is not available to management andemployees

0.850

Is facing lack of technical knowledge and expertiserelate to green innovation

0.885

Receive lower priority for future-oriented activitiessuch as green innovation initiatives work due to

0.919


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Table 1 continued


CR AVE

insufficient capacity in time to pick-up technicalknowledge

Have low innovative index because of poor valuecreation through R&D activities

0.955

Poor externalpartnership (PEP)

Find it difficult to find the partner or supplier tocorporate and work on the green innovationinitiatives

0.799 0.883 0.716

Realize that suppliers are not ready to invest inredesigning for green innovation initiatives

0.941

Have difficulties to find external partner who want toinvest in developing green innovation material ortechnologies

0.791

Insufficientinformation (II)

Insufficient availability of external sources ofinformation and advice regarding green innovationinitiatives

0.970 0.834 0.565

My company is uncertain about environmentalregulations

0.600

Insufficient availability of external sources ofinformation regarding green technologies andalternative material which are environmentalfriendly

0.705

Green knowledge available is not specific enough forcompany to reduce environmental impact

0.681

Lack of governmentsupport (LGS)

Getting approval from respective governmentdepartments for support like information on greeninnovation

0.831 0.875 0.637

Inadequate enforcement of environmental regulationsby government officers

0.761

Inadequate subsidies on green innovation initiatives 0.818

Poor support by government due to lack ofknowledge of green production/greenenvironmental leadership

0.781

Lack of customerdemand (LCD)

Adopting green design has been influenced bybusiness clients or end customer

0.881 0.942 0.803

Believes that there is limited growth opportunitiesdue to modest demand

0.909

Experience lack of customer responsiveness for greeninnovation products in the market (new product)

0.864

Experience lack of customer responsiveness to newgreen products in the market (for current product)

0.930

Environmentalcommercial benefit(ECB)

Believe that there would be little environmentalbenefits by practicing green innovation

0.837 0.916 0.731

Perceived that there is limited environmentalopportunities due to poor demand for their greenproducts

0.875

Experience that customer is not willing to pay forgreen innovation products

0.856

Perceived that green benefit is little but cost is high 0.852

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Table 1 continued


CR AVE

Green product (GP) Choose materials of the product that releases the leastamount of pollution during the green productdesign and development stage

0.847 0.965 0.753

Choose the material of the green product thatconsume the least amount of energy and resourceduring the design and development stage

0.770

Would well-consider whether the green product iseasy to reuse and easy decomposed during theproduct development and design stage

0.887

Would well-consider whether the green product iseasy to recycle during the product development anddesign stage

0.934

Produce green products that are free from hazardousmaterial in the product (free from lead, mercury,chromium and cadmium)

0.863

Uses environmental hazardous free packagingmaterials (free from lead, mercury, chromium andcadmium)

0.873

Make sure the green product made have re-workablecriteria

0.892

Produces green products that have minimum impactto the environment during the End-of-life stage

0.813

Make sure the green product manufactured hasrecyclable and reusable criteria

0.918

Green process (GPR) Manufacturing process effectively reduces theemission of hazardous substance or waste

0.841 0.926 0.676

Manufacturing process recycle waste and emissionthat allow them to be treated and re-used

0.823

Manufacturing process reduces the consumption ofwater, electricity, coal or oil

0.878

Manufacturing process reduced the use of rawmaterials

0.811

Emission of hazardous substance from green processsuch as lead, mercury, chromium and cadmium anetc. will be treated at end of process beforereleasing to the landfill or environment

0.808

Implementing green initiatives will significantlyimproved green process (good or service) to gaincompetitive advantage

0.769

Green system (GS) Has more R&D and green innovation capabilitiescompared to competitors

0.814 0.963 0.765

Had introduced a new product, process or services inthe preceding years related to green

0.891

Has a Environmental Management System (EMS)that help to proactively control pollutions

0.907

Has adopted new cost control method in our process 0.918

0.881


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variables) which is far greater than zero. In sum, the model exhibits acceptable fitand high predictive relevance.

Nonparametric bootstrapping was applied (Wetzels et al. 2009) with 2000replications to test the structural model. The structural model resulting from the PLSanalysis is summarized in Table 3. As the results show, H1a,c, H2a,b,c, H3a,b,c,H4c, H5b, H6b, H7a,b,c, H8a,b, and H9b,c were supported and other the hypotheseswere rejected.

6 Discussion

Environmental issues and green innovation have been receiving continuousattention and pressure from business sectors because of the growing concern overenvironmental destruction. Despite this fact, few Malaysian manufacturers practicegreen product, process, or system innovation. The lack of awareness on greeninnovation barriers prevents successful practice of green innovation amongMalaysian manufacturers. The aim of this study was to investigate the internaland external barriers to green innovation initiatives among Malaysian manufactur-ers. The findings show that the barriers to green product, process, and systeminnovation initiatives are different among manufacturing companies in Malaysia asdiscussed in the subsequent text.

According to the findings of the present study, environmental resource barriershave negative effects on the adoption of green product and green systeminnovations. Insufficient environmental resources, such as the number, tenure,experience, dedication, and knowledge of environmental staff, lead to a lack of in-house expertise (Woolman and Veshagh 2006) in an organization. The lack ofexpert staff on green innovation initiatives is a serious issue because thedevelopment of and emphasis on green innovation in Malaysia is new. Theimportance of environmental resources in green product innovation is higher than

Table 1 continued


CR AVE

Have implemented method and techniques tominimize consumable materials and material waste(improve reject rates in our process)

practice proactive management in addressing issueduring turbulence environment

0.875

Has adopted some form of techniques to improvespeed, error and waste in operation such as leanmanufacturing techniques, six sigma, total qualitymanagement, supply-chain management, etc.

0.865

Product-life-cycle or cradle to grave activity hastaken into consideration the design level of product,process, material and environmental impact whendesigning green innovation initiatives

0.843

CR Composite reliability, AVE average variance extracted

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Tab

le2

Discrim

inantvaliditycoefficients

ERB

APB

BPB

TB

PEP

IILGS

LCD

ECB

GP

GPR

GS

ERB

0.895

APB

0.465

0.841

BPB

-0.135

-0.198

0.80

4

TB

0.543

0.359

-0.269

0.88

6

PEP

0.112

0.111

0.339

0.147

0.84

6

II0.077

0.134

0.337

0.056

0.307

0.75

2

LGS

0.088

0.226

0.529

0.105

0.277

0.416

0.798

LCD

0.216

0.297

-0.010

0.289

0.187

0.257

0.400

0.896

ECB

-0.115

-0.095

0.250

0.052

0.199

0.283

0.247

0.170

0.855

GP

-0.598

-0.582

-0.151

-0.483

0.076

-0.112

-0.330

-0.450

-0.069

0.86

8

GPR

-0.333

-0.617

-0.115

-0.077

-0.219

-0.082

-0.030

-0.094

-0.271

0.180

0.822

GS

-0.466

-0.512

-0.204

-0.448

0.091

-0.116

-0.225

-0.231

-0.199

0.571

0.335

0.87

5

Mean

3.108

3.170

3.307

3.302

3.359

3.108

3.260

3.346

2.922

3.780

3.314

3.145

SD

0.945

0.864

0.747

0.920

0.797

0.856

0.786

0.834

0.835

0.887

0.777

0.8553

Diagonal

term

s(inbold)aresquareroots

oftheAVE


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other types of green product innovations, because human resources play a veryimportant role in producing green products (Mehrabi et al. 2000). Green productinnovation involves the development of green products from the research anddevelopment stage, which needs skilled staff in the area of being green. However,managers of manufacturing companies should attract, train, and retain skilled stafffor the successful implementation of green product and green system innovation.

The results also show that improper attitudes and perceptions toward greeninnovation is a barrier among manufacturing companies in Malaysia that negativelyaffects their green product, process, and system innovations. The managers andemployees should not have perceptions or beliefs that new green innovation

Table 3 Path coefficients andhypothesis testing

* p\ 0.05, ** p\ 0.01,*** p\ 0.001 (one tailed)

Hypothesis Relationships Path coefficient Decision

Green product innovation

H1a ERB ? GP -0.348*** Supported

H2a APB ? GP -0.248** Supported

H3a BPB ? GP -0.119* Supported

H4a TB ? GP -0.101 Not supported

H5a PEP ? GP 0.051 Not supported

H6a II ? GP -0.042 Not supported

H7a LGS ? GP -0.263*** Supported

H8a LCD ? GP -0.195** Supported

H9a ECB ? GP -0.057 Not supported

Green process innovation

H1b ERB ? GPR -0.094 Not supported

H2b APB ? GPR -0.803*** Supported

H3b BPB ? GPR -0.503*** Supported

H4b TB ? GPR -0.054 Not supported

H5b PEP ? GPR -0.173** Supported

H6b II ? GPR -0.183* Supported

H7b LGS ? GPR -0.348*** Supported

H8b LCD ? GPR -0.148** Supported

H9b ECB ? GPR -0.178** Supported

Green system innovation

H1c ERB ? GS -0.172* Supported

H2c APB ? GS -0.236** Supported

H3c BPB ? GS -0.212** Supported

H4c TB ? GS -0.196* Supported

H5c PEP ? GS 0.037 Not supported

H6c II ? GS -0.074 Not supported

H7c LGS ? GS -0.271** Supported

H8c LCD ? GS -0.034 Not supported

H9c ECB ? GS -0.203** Supported

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initiatives will have little environmental benefits (Williander 2006). Malaysianemployees are not willing to risk their jobs or safety for innovation (Pawanchik andSulaiman 2010). This risk will deter employees from creatively thinking out of thebox for new process and product designs. Poor communication, poor existingcorporate norms, weak human resource practices, and lack of commitment from topmanagement are the potential drivers of employee resistance to innovation (Zwick2002; Osterman 2000; Kane et al. 1999). Therefore, managers must be open-mindedand able to create an environment that can cultivate change in the organization(Madrid-Guijarro et al. 2009). Organizations must be able to give opportunities toemployees to try new things to generate creative ideas, new processes, improvedsystems, and better products by continuous improvement initiatives (Williander2006).

Business practice risk is another barrier to green product, process, and systeminnovation. All manufacturers’ excellent practices and the previous learning,knowledge, and experience in business practices will be underlying propositions forthe organization to enjoy better chances and to have the ability to focus attention,effort, and energy on implementing green innovation initiatives and practices(Florida et al. 2001). For example, a study conducted by King and Lenox(2000)claimed that lean concept adoption can lower toxic chemical pollution andreduce greenhouse gas emissions in a proactive manner instead of the end of thepipe control method, which is costly. Therefore, the lack of previous manufacturers’excellent practices has a negative effect on innovation initiatives.

Technical knowledge barriers have no significant effect on product and processinnovation and only affect system innovation. The lack of expertise on greentechnology and the lack of knowledge on green operations are the potential causesof low green innovation adoption (Silva et al. 2008). Companies with better R&Dwill have more capabilities in green system innovation (Lai et al. 2003). Therefore,the Malaysian manufacturers should invest in green R&D.

Poor external partnership barriers have negative effects on green processinnovation initiatives in Malaysian manufacturing companies. Large and matureorganizations will always want to extend their good production processes, practices,and systems to their partners or suppliers via the customer–supplier relationshipprogram. This intention will actually create a win–win situation for both parties interms of high quality, less waste, shorter cycle time, shorter lead time, better controlmethod, lower cost, and higher profit to both parties in the long run (van Hemel andCramer 2002). From this situation, the poor external partnership betweenorganizations in green innovation negatively affects green process innovation. Inaddition, the results of the study revealed that external partners have no significanteffect on green products. Finding partners and suppliers who want to cooperate andwork on green innovation initiatives is difficult (Ylinenpaa 1998). The lack ofpartnership in green product innovation is mainly due to the high cost, long paybackperiod, difficulties in protecting intellectual properties, high monitoring cost, anddifficulty in accessing the viability of innovation, making the challenge of financinginnovation even more difficult (Freel 2000; Woolman and Veshagh 2006). Thesedifficulties discourage organizations from taking part in green product innovationinitiatives (Hewitt-Dundas 2006; Hausman 2005).


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The insufficient information on market and technology is another barrier of greenprocess innovation. The lack of awareness on relevant green information on themarket and green technology is a setback to organizations (Woolman and Veshagh2006). Finding the right process to combat greenhouse gas emissions is difficult forcompanies because they are uncertain about environmental regulations andrequirements (Woolman and Veshagh 2006).

Lack of government support is another barrier that has negative effects on allthree types of green innovation initiatives in Malaysian manufacturing companies.The government sets the regulations and incentives that induce organizations to takeup green initiatives, but the control and pressure to comply to be green is poor(Runhaar et al. 2008; Eltayeb et al. 2011). The control comes only if complaints aremade by the public or if the government itself notices the harmful practices of anorganization. Pressure will be exerted on this organization, which may also lead to atemporary closure to rectify the situation and to put system processes in place.Although the Malaysian government promotes green activities and grants financialaids and incentives to manufacturers who embark on green initiatives or products,government support remains lacking toward nurturing green innovation initiativesin Malaysian manufacturing companies.

Lack of customer demand is the next barrier to green product and processinnovation. Silva and Leitao (2007) mention that organizations experience limits oncustomer demand for green innovative products in the market because greenproducts are expensive. Therefore, organizations believe in limited growthopportunities for practicing green innovation, and because of this belief, they arenot willing to take high risks to develop green innovative products and process(Runhaar et al. 2008; Silva and Leitao 2007).

Finally, the result of the present study reveals the negative effects of the lack ofenvironmental commercial benefits on green process and system innovation. Thisfinding is consistent with van Hemel and Cramer (2002) and Woolman and Veshagh(2006), who stated that few environmental commercial benefits may be reaped fromgreen innovation initiatives, reducing green innovation initiatives in firms.

7 Managerial and policy implications

The results reveal the internal and external barriers to each type of green innovationfor the managerial groups of Malaysian manufacturers. They will help them tounderstand and combat the internal and external barriers to the type of greeninnovation that their organizations want to practice. The results are helpful formanufacturing firms to easily apply green innovation by removing the barriers. Inaddition, barriers to green innovation are a useful concept to prioritize innovationpolicies. The evidence on internal barriers to innovation is of interest topolicymakers and may inter alia be shaped by framework conditions such ascorporate governance and industrial relations. Evidence on external barriers toinnovation provides a rationale for using more direct innovation policy channels.

To diffuse green product innovation, manufacturing firms and policymakersshould direct their attention toward environmental resource barriers, attitudinal and

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perception barriers, and business practice barriers, and the government shouldaddress the lack of government support and customer demand issues. The diffusionof process innovation can be accelerated by addressing attitudinal and perceptionbarriers, business practice barriers, poor external partnership, insufficient informa-tion, lack of government support, lack customer demand, and lack of environmentalcommercial benefits. Regarding green system innovation, manufacturing firms andpolicymakers need to give special attention to environmental resource barriers,attitudinal and perception barriers, business practice barriers, technical barriers, lackof government support, and lack of environmental commercial benefits.

8 Limitations and recommendations to future studies

Certain limitations need to be considered in generalizing the results of this study.One limitation is that the study tested and verified the hypotheses with aquestionnaire survey and only provided a cross-section of the study in nature.Therefore, it limits the ability to imply causality in the relationships among thevariables. Thus, the results of the survey are affected by the fact that this studycannot observe the dynamic change of green innovation in the process of addressingthe internal and external barriers. As such, a longitudinal study should be attempted,one that examines the relationships for an extended period to be able to provideresults that are more precise. Furthermore, the population for this study is specificonly to manufacturing companies. Consequently, service and non-manufacturingcompanies that may want to apply the results of this study need to be moreconscious because the internal and external barriers might vary with the types ofindustries. In addition, this study used a survey sample limited to Malaysianmanufacturing companies. However, the maturity of the internal and externalbarriers to green innovation might be different among countries. Thus, futureresearch could test the research model of this study in non-manufacturingcompanies and in other countries. The study also suggests conducting the studyin different regions of a country to provide the opportunity for data comparison andto obtain more information. Our analysis indicated that barriers to green productinnovation, green process innovation, and green system innovations are varied;therefore, we call for qualitative research to investigate the potential reason of thesedifferences.

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