collaborative green innovation in emerging countries: a social capital perspective

Collaborative green innovationin emerging countries:

a social capital perspectivePing-Chuan Chen and Shiu-Wan Hung

Department of Business Administration,National Central University, Jung-Li City, Taiwan

Abstract

Purpose – The new paradigm for green innovation has already shifted to a collaborative model. Thisstudy aims to examine how environmental collaboration across organizational boundaries affectsgreen innovation from the social capital perspective.

Design/methodology/approach – This study used structural equation modeling method toanalyze the innovation performance of 237 Taiwanese firms. Non-response bias was also assessedstatistically and appropriate measures taken to minimise the impact of common method variance.

Findings – The empirical results showed that: structural capital and cognitive capital have a positiveinfluence on relational capital, relational capital plays a significant role in green management and inturn leads to greater innovation. To achieve effective green innovation, companies should leveragetheir social capital in order to produce additional competitive advantages through environmentalcollaboration.

Originality/value – With the relative scarcity of resources and the increased pressures forenvironmental sustainability, there is an increasing interest in studying collaborative green innovationin emerging countries. Unlike many other empirical studies, this study makes an importantcontribution to the literature by examining how environmental collaboration in emerging countriesaffects green innovation from the social capital perspective in a detailed manner.

Keywords Collaboration, New product development, Knowledge management,Environmental management, Capabilities

Paper type Research paper

1. IntroductionUnder the trends of international green management, the competition in globalindustries has become more complex and uncertain. Most product and technologydevelopments are moving towards a green-based structure. Such accounting forenvironmental impacts in business strategies has resulted in significant changes in thesocial system and competitive arena (Schiederig et al., 2012; Rao and Holt, 2005;Azzone et al., 1997; Welford, 1995). The new paradigm for green innovation has alreadyshifted to a collaborative model (Dangelico and Pujari, 2010; Pujari, 2006). Due to theenvironmental collaboration’s need for more exchanges of resources, organizationsshould execute collaboration activities across organizational boundaries in order toacquire information, resources, and knowledge (Noci and Verganti, 1999). Therefore,how efficiently utilization of corporate innovative capacities from inter-organizationactivities can enhance green innovation is an important issue that organizations cannotafford to overlook.

The impact of green management on innovation has recently received muchattention (Zhu et al., 2011; Qi et al., 2010; Eiadat et al., 2008; Rehfeld et al., 2007;

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0144-3577.htm

Received 11 June 2012Revised 23 September 2012

15 December 2012Accepted 7 March 2013

International Journal of Operations &Production Management

Vol. 34 No. 3, 2014pp. 347-363

q Emerald Group Publishing Limited0144-3577

DOI 10.1108/IJOPM-06-2012-0222

Collaborativegreen innovation

347

Noci and Verganti, 1999; Porter and van der Linde, 1995). Companies have no choice butto implement strategies to reduce the environmental impacts of their products andservices and take into account the operations of collaborators (Costantini and Mazzanti,2012; Zhu et al., 2005; Biondi et al., 2002). The traditional view among managersconcerning environmental issues is that the incorporation of environmentalconsiderations into the improvements of operations has mainly sunk costs forcompanies. Strict environmental regulation raises an addition cost imposed on firms,which may reduce their competitiveness. Porter and van der Linde (1995) argued,however, that properly designed environmental standards can trigger innovation thatmay partially or fully offset the costs of complying with them. Ever since, variousstudies have examined this new concept of an environment-competitivenessrelationship (Lanoie et al., 2008; Arimura et al., 2007; Popp, 2006; Brunnermeier andCohen, 2003; Berman and Bui, 2001; Klassen, 2000).

Although most studies have pointed out the trade off between environmental andindustrial competitiveness, they have neglected to discuss the role of emerging countriesand their impact on triggering green innovation on the global market. Given the limitationof country-specific resources, there is an increasing interest in studying collaborativegreen innovation in emerging countries. While companies in developed countries useinnovations to command price premiums for green products and open up new marketsegments (Porter and van der Linde, 1995), the companies in emerging countries playimportant roles as major manufacturers in the international markets. As parts of supplychains, emerging countries have many opportunities, but they also face substantialenvironmental burdens, which may erode their global competitiveness. For example,Taiwan is a well-known electronic and information technology manufacturer. Taiwanesecompanies have produced many electronic products for multinational organizations andcollaborated with developed countries in order to meet environmental requirements. Theenvironmental improvements of operations, however, come at additional costs imposedon these companies. With the relative scarcity of resources and the increased pressuresfor environmental sustainability, how to build corporate capacities from environmentalcollaborations with developed countries becomes of primary concern to Taiwanesecompanies. Given the competitive environment faced by emerging industries, this studytakes the Taiwan industry as an example to analyze how environmental collaborationwith supply chain partners affects green innovation from the social capital perspective.

Social capital refers to the set of social resources embedded in not only therelationships, but also interactions among the different actors and the processes derivedfrom those relationships (Min et al., 2008; Nahapiet and Ghoshal, 1998). Companies canacquire information, resources, and knowledge (Ahuja, 2000) by combining direct orindirect interfirm network interactions with relationship development. In the context ofgreen management, much valuable knowledge is socially embedded in the form ofinstitutional practice. This may prevent required information from being transmittedbetween green partners (Tsoukas and Vladimirou, 2001; Cousins and Stanwix, 2001;Blackler, 1995). In this study, we argue that social capital may affect companies inexchanging green technological knowledge with their partners, and in turn boost anorganization’s capacity for green innovation effectively. Organizations require complexgreen technology and knowledge from multinational organizations and developedcountries by lessening the environmental burden of their products. Hence, they need toobtain external resources through environmental collaboration. These companies also

IJOPM34,3

348

should increase access opportunities to exchange environment-related informationthrough the interactive relationship with their partners. Previous studies haveintroduced the idea that social capital may contribute to a firm’s ability to create value inthe form of innovations (Byosiere et al., 2010; Inkpen and Tsang, 2005; Lesser, 2000).No previous research, however, has explored social capital’s contribution to greenmanagement. In the context of green management, companies with an existingcollaborative system are more adept at grasping customer’s environmental performancerequirements (Simpson et al., 2007; Geffen and Rothenberg, 2000) and can rapidly obtainthe required key resources. Furthermore, when partners join a common environmentalproject and share common interests, these established relations also may benefit theorganizations. Through established relations, organizations could seek to solve newproject-specific problems by sharing green technological knowledge more easily. Hence,building these valuable relational resources plays a significant role in the greenmanagement.

In the following section, we discuss how social capital embedded in theenvironmental collaboration across organizational boundaries affects greeninnovation, and then we develop our hypothesis. In Section 3, we present our researchmethodology and results, including our data collection process, samples, and thevariables in this study. Section 4 presents the empirical results obtained by usingthe structural equation modeling (SEM) method. We also present a further discussion ofthe results. In Section 5, we provide a conclusion and suggestions for future research.

2. Literature review and hypothesis development2.1 Social capital theorySocial capital refers to the set of social resources embedded in not only relationships,but also interactions among different actors and the processes derived from thoserelationships (Min et al., 2008; Nahapiet and Ghoshal, 1998). Social capital is the set ofresources created through exchange. This type of resource is embedded in variousrelationships, including interpersonal and organizational networks (Bourdieu, 1986;Burt, 1992; Coleman, 1990; Nahapiet and Ghoshal, 1998). Social capital could facilitatethe exchange/combination of resources in the social unit and also provide the rationalefor the existence of the organization. Social capital, as it is commonly used inorganization literature, refers to the quantity and quality of social relationships such asformal and informal social connections that exist in the social units. Social capital isunderstood in various disciplines as a fundamental factor in increasing the efficiency ofinformation diffusion through minimizing redundancy, reducing transaction costs, andencouraging cooperative behavior thereby facilitating the development of new forms ofinnovative organization.

Previous studies have explored at length the impact of social capital onorganizational performance (Byosiere et al., 2010; Inkpen and Tsang, 2005; Lesser,2000), but none thus far have explored social capital’s contribution to greenmanagement. In order to fill this research gap, this study investigates how social capitalaffects access to partners for exchanging green technological knowledge, and in turnboosts an organization’s capacity for green innovation. When implementing greenmanagement, organizations have to involve many environmental collaborationactivities. Social capital could be an important channel for the exchange andintegration of green knowledge. For example, when companies improve the recyclability


349

of new products by choosing appropriate materials from their suppliers, they can obtaingreen knowledge and external resources through collaboration, acceleratingenhancements to environment-related performance. This study emphasizes the ideathat the stock of social capital can potentially build an interactive relationship with acompany’s partners to enhance the sharing of green knowledge and also motivatepartners to accelerate the reform of green management.

In the context of green management, there is a complex interrelation betweensystemic changes in an organization’s R&D strategy and green innovation (Noci andVerganti, 1999). Organizations need to incorporate environmental considerations intotheir corporate strategies on product and process innovations. Hence, knowledgesharing and exchanges based on environmental requirements is a critical issue of greeninnovation. Under strict environmental regulations, organizations have to build theircapacity for managing green knowledge. When organizations have greater socialcapital, it will improve their innovation performance through the process of sharingknowledge related to green management. In this study, we identify the interrelationshipamong the different types of social capital and examine the way in which social capitalaffects knowledge sharing and innovation performance related to green management.

2.2 The interrelationship among the three types of social capitalThis study adopts the classification of social capital proposed by Nahapiet and Ghoshal(1998) in terms of structural capital, relational capital, and cognitive capital. Structuralcapital refers to the overall pattern of relationships among social actors (Nahapiet andGhoshal, 1998). Previous studies have shown that strong ties influence the level ofknowledge exchange between actors (Renzl, 2008). Structural capital offersopportunities for exchanging green knowledge and resources through the structuralenvironment mechanism. When organizations can easily obtain critical informationwith greater structural capital, they can rapidly understand the impact of environmentalregulations on partners, and in turn improve environmental performance. Relationalcapital refers to the assets that are created and leveraged through relationships(Nahapiet and Ghoshal, 1998). Previous studies have indicated that greater supply chainrelationships can assist companies in reducing production costs, increasing flexibility,and improving the efficiency of supply chain operation (Shi et al., 2012; Vachon andKlassen, 2006). Relational capital could possibly make partners become more willing toshare knowledge and their resources. Interactive relationships based on trust andreciprocity can help inspire partners to take the initiative to exchange green knowledge.Cognitive capital refers to the resources providing shared representation,interpretations, and systems of meaning among parties (Nahapiet and Ghoshal, 1998).This kind of social capital endows partners with willingness and capacity for collectiveaction, creating critical resources for organizations (Tsai and Ghoshal, 1998). Cognitivecapital can assist partners in fully understanding each other’s considerations andenhancing green technology or knowledge combination to improve performance(Lee, 2008). Having a consistent consensus between partners contributes to achievingenvironmental goals that are beneficial to green knowledge exchange.

Identifying the interrelationship among the three different dimensions of social capitalis useful in deciding how to manage the collaborative relationships in green management.Previous studies have mentioned that relational capital evolves from the interactionbetween two parties (Gabarro, 1978). As members interact over time, their trust

IJOPM34,3

350

relationships will become more concrete, and the actors become more likely to perceiveeach other as trustworthy. In the context of green management, companies must elicit,organize, and disseminate information and resources from their team members,customers, suppliers, and partners. The more sophisticated a company’s organizationalcapabilities, information management system, and managerial mechanisms regardingenvironmental management are, the more easily its partners can interact and exchangeinformation and resources relating to green management with them. Thus, companieswith greater structural capital have more opportunities to develop relational capital.Moreover, a trusting relationship is rooted in value congruence (Sitkin and Roth, 1993).When companies and their partners all work towards collective goals regarding greenmanagement, it encourages the development of a trusting relationship. Hence, the stock ofcognitive capital with team members, customers, suppliers, and partners may contributeto the development of relational capital. In order to respond to strict environmentalregulations and international environmental trends, organizations can build a higherlevel of relational capital through a stock of structural and cognitive capital. Therefore,we propose the following hypotheses:

H1a. Structural capital is positively related to relational capital embedded inenvironmental collaborations.

H1b. Cognitive capital is positively related to relational capital embedded inenvironmental collaborations.

2.3 The relationship among relational capital, knowledge sharing, and innovationPrevious research has pointed out that higher levels of relational capital facilitate socialexchange, communication, and cooperation among individuals, and also enhance teamworkperformance (McAllister, 1995). In this study, we argue that relational capital may affectenvironmental collaboration. A firm’s developing inter-organizational environmentalpractices would involve trust, commitment, and joint goal setting among multiple supplychain members (Simpson et al., 2007). Rackaham and Ruff (1995) indicated that when twoentities agree to integrate their operational modes and share common interests, it willconstitute a partner relationship. Hence, existing relationships based on trust andreciprocity between suppliers help inspire partners to take the initiative to exchangeknowledge. Greater relational capital with partners would facilitate the sharing of greenknowledge as trusting relationships build. Therefore, we propose the following hypothesis:

H2. Relational capital is positively related to knowledge sharing in environmentalcollaborations.

Knowledge exchange aids companies in comprehending green knowledge andapplying it into an organizational knowledge system (Grandori and Soda, 1995; Popperand Lipshitz, 1998). Through adequate exchange processes of green knowledge, it willassist R&D teams in identifying their requirements and facilitate the development ofspecific action plans for green innovation. Because green product developmentactivities need more exchange of green knowledge, companies can enhance innovationperformance through the sharing of knowledge regarding environmentalrequirements. Therefore, we propose the following hypothesis:

H3. Knowledge sharing in environmental collaborations is positively related toinnovation.


351

3. Methodology and measurement3.1 Data collection and samplesThe data collection in this study was conducted by distributing the survey instrumentin the form of questionnaires to firms in Taiwan. The samples were randomly selectedfrom Taiwanese manufacturing companies, which are listed in the 2010 survey of thetop 1,000 enterprises by the Common Wealth Magazine. These selected samples havethe end-product manufacturing, and all their clients are enterprise customers. Severalsteps were taken to ensure data validity and reliability by refining and rigorouslypre-testing the questionnaire. Experts who have green management experiences in themanufacturing industry were interviewed to further validate whether the surveyquestionnaire satisfied practical developments in the first pretest stage. Thequestionnaire was then pre-tested by ten managers in the manufacturing industry.

Survey packages were sent out to each company that had worked on a specificenvironmental collaboration with foreign partners. Prior to mailing the questionnaireout, we called each company to explain the objectives of our research confirm the namesand job titles of the respondents. The respondents were asked to return the completedquestionnaires. Questionnaires were then mailed to the respondents, who areexecutives and managers of manufacturing, R&D, or environmental protectiondepartments of these manufacturing companies that have contact experiences withtheir suppliers or enterprise customers. To improve the valid survey response rate, wefurther reminded the respondents again after one month. The survey was conductedfor about four months. A total of 390 questionnaires were distributed. After excludingincomplete questionnaires, there were 237 valid questionnaires, and the effectiveresponse rate was 60.8 percent.

Table I lists the characteristics of the sample. The sampling population consisted of20.7 percent in the semiconductor industry, 21.9 percent in electronics, 16.5 percent inmanufacturing, 12.7 percent in information technology, 13.9 percent in communication,8.4 percent in energy, and 5.2 percent in other industries. Among the respondents inthese selected samples, there were 167 males (70.5 percent) and 70 females (29.5 percent).The age raged from 21 to 60 years old. 60.3 percent were over 30 years old. 54.4 percent ofthe respondents have more than six years of working experience and most of them weresenior mangers. To detect any potential non-response bias, Armstrong and Overton(1977) and Kanuk and Berenson (1975) recommend assuring that the last quartile orsecond wave of respondents’ responses is similar to that of non-respondents. We dividedselected samples into two groups (one consists of 34 samples that were returned withintwo weeks, and the other is 26 samples which returned within one month). There are nosignificant differences in the two groups’ perceptions of the implementation level of thevarious items presented in the questionnaire. The results thus suggested thatnon-response bias was not a problem in this study.

3.2 Measurements of variablesThe research questions devised were based on previous literature. To ensure consistentinterpretation of the questionnaire, the meaning of green partners in the context of theenvironmental collaborations, including green supply chain members or collaboratorsfor the environmental improvement activities, was illustrated in the preface of thequestionnaire. The questions used for measuring each variable are listed in Table II.The constructs utilized in this study are measured with the seven-point Likert scale,

IJOPM34,3

352

from 1 to 7 rating, from strong disagreement to strong agreement. Following thedefinition of social capital provided by Nahapiet and Ghoshal (1998), this studyclassifies the social capital constructs into relational capital, structural capital, andcognitive capital. The relational capital was assessed by a scale proposed by Morganand Hunt (1994), McAllister (1995) and Tsai and Ghoshal (1998), including four itemsrelating to trust and commitment between the focal firm and its green partners. Thestructural capital was evaluated using a three-item scale developed by Smith et al.(1994) and Tsai and Ghoshal (1998), which is comprised of social relationships,network interaction, and communication frequency with green partners in theenvironmental collaboration. The cognitive capital was assessed using a scaleproposed by Tsai and Ghoshal (1998) and Chiu et al. (1999), including three itemsrelating to shared vision, shared values, and shared language. Knowledge sharing wasadapted from four items by Bock et al. (2005), including the sharing of work reports,official documents, experience, and know-how with partners frequently in theenvironmental collaboration. Innovation performance was evaluated by a scale byLovelace et al. (2001), comprised of four items to evaluate innovativeness and threeitems to evaluate constraint adherence relating to green management.

3.3 MethodologyAfter data collection, we used the SEM method for data analysis. In the SEM method,we can examine the mutual relationships simultaneously among a set of positedconstructs, which are measured by the observed variables. It includes the analysis oftwo models: the structural model and the measurement model.

Characteristics n ¼ 237 %

GenderMale 167 70.5Female 70 29.5Age21-30 years 94 39.731-40 years 118 49.841-50 years 22 9.351-60 years 3 1.2Tenure2 years or less 35 14.83-5 years 73 30.86-10 years 66 27.911-15 years 48 20.316-20 years 9 3.821 years or above 6 2.4Industry typeSemiconductor 49 20.7Electronics 52 21.9Manufacturing 39 16.5Information technology 30 12.7Communication 33 13.9Energy 20 8.4Other 14 5.2

Table I.Characteristics of the

sample


353

The structural model specifies the relationship among the posited constructs.The equation of the structural model is presented below:

h ¼ Bhþ Gjþ 6 ð1Þ

The measurement model specifies the relationships between the observed variablesand their underlying constructs, which are allowed to inter-correlate with

Constructs Measurement item Reference

Relational capital(RC)

RC1: whether green partners deal with each other honestlyand open-heartedly in environmental collaboration

Morgan andHunt (1994)

RC2: whether green partners pay attention to theconfidentiality of green concepts given by each other inenvironmental collaboration

McAllister (1995)

RC3: whether green partners abide by their mutualcommitment in environmental collaboration

Tsai andGhoshal (1998)

RC4: whether the cooperative relationships with greenpartners in environmental collaboration are stable

Structural capital(SC)

SC1: my company maintains close social relationships withgreen partners in environmental collaboration

Smith et al.(1994)

SC2: my company spends a lot of time interacting with greenpartners in environmental collaboration


SC3: my company has frequent communication with greenpartners in environmental collaboration

Cognitive capital(CC)

CC1: whether green partners have the same views on greenconcepts in environmental collaboration


CC2: whether green partners have the same values regardinggreen concepts in environmental collaboration

Brashear et al.(2003)

CC3: whether green partners use the same professionallanguage to communicate with each other regarding greenconcepts in environmental collaboration

Chiu et al. (2006)

Knowledgesharing (KS)

KS1: the sharing of work reports with green partnersfrequently in environmental collaboration

Bock et al. (2005)

KS2: the sharing of official documents with green partnersfrequently in environmental collaborationKS3: the sharing of experiences with green partnersfrequently in environmental collaborationKS4: the sharing of know-how with green partners frequentlyin a more effective way in environmental collaboration

Innovationperformance (P)

P1: the innovativeness of the company’s green productcompared with other companies’ innovativeness

Lovelace et al.(2001)

P2: the number of green innovations or new ideas introducedby the company compared with other companiesP3: overall green management performance compared withother companiesP4: adaptability to changes compared with other companiesrelated to green managementP5: progress compared with initial expectations related togreen managementP6: adherence to schedules related to green managementP7: adherence to budgets related to green management

Table II.Questions for measuringeach variable

IJOPM34,3

354

other constructs. The equation of the measurement model is presented below asequations (2-1) and (2-2):

y ¼ Lyhþ 1 ð2-1Þ

x ¼ Lxjþ d ð2-2Þ

In this study, a two-step SEM process proposed by Anderson and Gerbing (1998) wasemployed to test our hypotheses with AMOS 16.0. First, employing the confirmatoryfactor analysis (CFA), we evaluated the scale validity of the measured constructs fromthe measurement model. After measurement model testing, we used the structuralmodel testing to examine the hypotheses.

4. Results and discussions4.1 Measurement model testingThe reliability of the constructs was measured by the composite reliability indicator.Reliability can reflect the internal consistency of the indicators measuring a givenfactor. As shown in Table III, all constructs exceeded 0.9, satisfying the generalrequirement of reliability. To test the convergent validity, all factor loadings forindicators measuring the same construct are statistically significant. The results ofTable III show that all indicators effectively measure their corresponding constructand support convergent validity (Anderson and Gerbing, 1998).

In this study, the average variance extracted (AVE) for each construct exceeds 0.50,suggesting that the hypothesized items capture more variance in the underlyingconstruct than any attributable to measurement error. In all, the above results ofTable III show that instruments used for measuring all indicators of the construct inthis study reached a statistically adequate level. In addition, we also tested thediscriminant validity. An assessment of discriminant validity among the constructssupport the model fit. Table III summarizes the assessment results of the measurementmodel.

4.2 Structural model testingFollowing the first step of measurement model testing, the second step is to analyze thestructural model. The overall fit of the structural model reaches an acceptable level(x2 ¼ 68.49, df ¼ 28, x2/df ¼ 2.446, GFI ¼ 0.95, AGFI ¼ 0.90, CFI ¼ 0.99, NFI ¼ 0.97,RFI ¼ 0.96, IFI ¼ 0.98, TLI ¼ 0.97, RMR ¼ 0.05, RMSEA ¼ 0.07). The fit indices

Construct Indicators Standardized loading R 2 CR AVE

Relational capital RC1 0.91 0.83 0.95 0.82RC2 0.98 0.96RC3 0.87 0.76RC4 0.86 0.74

Structural capital SC1 0.81 0.65 0.90 0.74SC2 0.96 0.92SC3 0.81 0.66

Cognitive capital CC1 0.94 0.88 0.95 0.85CC2 0.93 0.86CC3 0.90 0.81

Table III.Standardized loadings

and reliabilities formeasurement model


355

showed reasonable fit values with no substantive differences. Therefore, the pathdiagram for the research model was an adequate representation of the entire set ofcausal relationships.

Figure 1 shows the estimated path coefficients and their significance in the structuralmodel. The results in Figure 1 support H1a (path coefficient ¼ 0.37, p , 0.005), whichimplies that the greater structural capital the focal firm has with their partners, thegreater relational capital is embedded in the green network. Thus, if the companiesincrease access opportunities to the structural supply system through environmentalcollaborations, it would create an interactive platform for social capital transactions. Asactors interact over time, relational capital develops (Nahapiet and Ghoshal, 1998). Allactors have an incentive to develop a greater network of green partners, as not only arethey called upon to share their own knowledge or experience, but also stand to benefitfrom others’ expertise (Simpson et al., 2007). According to the opinions of the industryexperts interviewed in the pretest stage, only when green partners are willing to provideproprietary information and business operations based on the trusting relationship, canthe levels of environmental commitment increase, and in turn lead to a greater likelihoodof improving environmental performance. For example, Taiwan SemiconductorManufacturing Company (TSMC), which provides largest integrated circuit technologyand manufacturing services in the world, endeavor to promote environmentalcollaboration criteria on new objectives, including environmental management systems(EMS) complying with ISO 14000 standards and certification to ISO 14000, to help hispartners determine effective solutions to environmental problems. They also organizesupply chain management forum every year to build interactive relationship with theirpartners. Hence, building better structural capital within supply chain network wouldhelp companies open more channels of communication and gain additionalopportunities to manage supply relationship effectively.

Consistent with H1b, the empirical results of this study showed that cognitivecapital has a positive and significant effect upon relational capital, with a path

Figure 1.Parameter estimates forthe structural model

StructuralCapital

CognitiveCapital

RelationalCapital

0.37***

0.42***

KnowledgeSharing

InnovationPerformance

0.27*** 0.20*

The Development ofSocial Capital

The Exchange ofGreen Knowledge

The Creation ofGreen Innovation

Notes: Significant at: *p < 0.05, **p < 0.01 and ***p < 0.005; x2 = 68.49, df = 28,x2 /df = 2.446, GFI = 0.95, AGFI = 0.90, CFI = 0.99, NFI = 0.97, RMR = 0.05,RMSEA = 0.07

IJOPM34,3

356

coefficient of 0.42 ( p , 0.005). This result can be explained by the fact that when actorsshare common goals for green management, they can avoid possiblemisunderstandings in their interactions and have more opportunities to exchangetheir knowledge freely. Furthermore, they will also tend to commit themselves more totheir relationships when they have a higher level of cognitive capital. Greater cognitivecapital provides intrinsic motivation for the actors involved in the green network(Wei et al., 2010). Because shared values enable one member to understand othermember’s goals better, such harmony of purpose contributes to cultivate trust amongmembers (Sahay, 2003). For example, the incorporation of environmentalconsiderations into the supply chain often requires long-term allocation of resources,and whether the selected partners can commit to a continual investment of resources iscrucial to their survival. These findings are consistent with the experts’ experience.One of the industry experts, who is in charge of risk management, labor safety andenvironmental health affair in TSMC, suggested that companies should avoid complexenvironmental initiatives with their partners when they do not have environmentallyconscious practices to implement them. Inter-organizational collaboration appropriatefor green supply chain needs to be developed by a proactive corporate environmentalstance. It provides the foundation to align the organizations’ goal of socialresponsibility and further communicate supply chain members’ commitment to suchgoals. Hence, integrating commonly recognized goals for green management wouldhelp partners be more aware of the customer’s environmental concerns and valuesystem and enhance positive customer-supplier relationship.

Consistent with H2 and H3, the empirical results indicate that relational capital is animportant antecedent of knowledge sharing, with a path coefficient of 0.27 ( p , 0.005),and in turn, knowledge sharing leads to greater innovation performance, with a pathcoefficient of 0.20 ( p , 0.05). This result is in accordance with previous studies findingthat social relationships provide a motivational source of social capital (Alder and Kwon,2002). This can be explained by the fact that greater relational capital will motivatepartners to share their knowledge, because they will not be afraid of being takenadvantage of. When organizations have more interactive green relationships with theirpartners, they will have more opportunities to leverage relational capital in order tofacilitate inter-organizational activities (Dyer, 1997). Furthermore, if companies do nothave much control over their suppliers, working to build trust within the relationshipalso can cause greater performance gains for both partners involved in the exchange(Handfield and Bechtel, 2002). For example, companies which are serious about theirimproving environmental performance should work towards building greater levels oftrust with key-input partners and exploring opportunities for knowledge sharing on aregular basis. Greater levels of relational capital would be helpful in improvinginter-organizational activities and enhancing greater green performance within anorganization (Buysse and Verbeke, 2003; Bowen et al., 2001). These finding aresupported by preliminary discussion with industry experts who have greenmanagement experiences in the manufacturing industry. One response in particularlyillustrated the relationship perspective of those interviewed: companies need to makeefforts on relationship-specific investment with green partners. These kinds ofinvestment on relationship management would not only increase partners’ strategicenvironmental collaboration, but also provide the minimum assurance of riskmanagement. Hence, to achieve effective knowledge sharing, the relevant parties should


357

establish and reinforce collaborative relationships regarding green innovation, gearedtowards achieving greater competitive advantages.

5. Conclusion and limitationsThe results of this study indicated that social capital facilitates knowledge sharingregarding green management, and in turn leads to greater green innovation. The threekinds of social capital had significant effects, directly or indirectly, on knowledgesharing regarding green management. The social capital approach can be considered asstrategies for companies, which leads to a new paradigm for green innovation and/orbusiness operations. Companies have to consider environmental issues as a majorsource of strategic change, due to growing social and regulatory concerns for theenvironment. Particularly in emerging countries, the appropriate development of greenconcepts and practices may indeed aid these countries by lessening the environmentalburden of the manufactured products, while even potentially improving their economicpositioning. However, the development process of green management for developingcountries is complex and dynamic, because their industries must face globalcompetition. Hence, companies should leverage their social capital in order to produceadditional competitive advantages through environmental collaboration with developedcountries.

This study also offers a frame of reference for those who wish to facilitate knowledgesharing and innovation in green management. Organizations need to pay more attentionto the issues of environmental management and sustainable development. However,many companies with damages for failing to comply with the internationalenvironmental protection regulations have few resources to deploy in this regard.If organizations are able to manage and leverage their social capital effectively, they canopen more channels of communication and gain additional opportunities to exchangegreen information and resources. For example, when partners were willing to makeenvironmental commitments in the form of capacity and equipment, higher levels oftrust were developed. In addition, when companies do not have a large degree of controlover partners, working with them to improve levels of trust may be helpful in improvinginter-organizational learning, and in turn trigger greater green innovation. The benefitsfrom investment in social capital building have some upper limits. For example,technology investment may make it possible to stretch the limitation of networks forgreen innovation. Although it takes time and money to build social capital, moreinteractions with green partners could provide the unplanned opportunities for theaccidental coming together of ideas that may lead to the development of greeninnovation within organizations. In addition, relationship stability and durability arekey network features associated with high levels of norms of cooperation (Nahapiet andGhoshal, 1998). Thus, building a stable network relationship may serve to reduce sometransaction costs of environmental collaborations with partners. Therefore, it issuggested that managers consider the investment of social capital as one of the greenstrategies for companies, which are influential in the development of new greenintellectual capital. To achieve effective green innovation, companies should leveragetheir social capital in order to produce additional competitive advantages throughenvironmental collaboration.

However, there are some limitations in this study, due to its empirical data andmethods. First, this study did not measure how social capital and knowledge sharing

IJOPM34,3

358

change over time. All measures were taken at a single point in time. Hence, futurestudies might aim for a longitudinal study to examine the differences of knowledgesharing in the different development stages of social capital. Second, the findings ofthis study may only reflect the situation of Taiwanese companies. Further studiesmight focus on other countries for comparison’s sake with this study. Third, companiesshould not only manage the accumulation of external knowledge for triggering greeninnovation, but also adapt their absorptive capabilities in order to succeed withstrategic innovation. It is suggested therefore that further studies can focus on howabsorptive capacity affects the inter-organizational learning process in the context ofgreen innovation. The framework of this study may serve as a starting point for futuretheoretical and empirical research in exploring possible factors impactingenvironmental – competitiveness relationship.

References

Ahuja, G. (2000), “Collaboration networks, structural holes, and innovation: a longitudinalstudy”, Administrative Science Quarterly, Vol. 45 No. 3, pp. 425-455.

Anderson, J.C. and Gerbing, D.W. (1998), “Structural equation modeling in practice:a review and recommended two-step approach”, Psychological Bulletin, Vol. 103 No. 3,pp. 411-423.

Arimura, T., Hibiki, A. and Johnstone, N. (2007), “An empirical study of environmental R&D:what encourages facilities to be environmentally-innovative?”, in Johnstone, N. (Ed.),Corporate Behaviour and Environmental Policy, Edward Elgar, Cheltenham.

Armstrong, J.S. and Overton, T.S. (1977), “Estimating nonresponse bias in mail surveys”, Journalof Marketing Research, Vol. 14 No. 3, pp. 396-402.

Azzone, G., Bertele, U. and Noci, G. (1997), “At last we are creating environmental strategieswhich work”, Long Range Planning, Vol. 30 No. 4, pp. 562-571.

Berman, E. and Bui, L.T.M. (2001), “Environmental regulation and productivity: evidence fromoil refineries”, The Review of Economics and Statistics, Vol. 83 No. 3, pp. 498-510.

Biondi, V., Iraldo, F. and Meredith, S. (2002), “Achieving sustainability through environmentalinnovation: the role of SMEs”, International Journal of Technology Management, Vol. 24Nos 5/6, pp. 612-626.

Blackler, F. (1995), “Knowledge, knowledge work and organizations: an overview andinterpretation”, Organization Studies, Vol. 16 No. 6, pp. 1021-1046.

Bock, G.W., Zmud, R.W., Kim, Y.G. and Lee, J.N. (2005), “Behavioral intention formation inknowledge sharing: examining the roles of extrinsic motivators, social-psychologicalforces, and organizational climate”, MIS Quarterly, Vol. 29 No. 1, pp. 87-111.

Bourdieu, P. (1986), “The forms of social capital”, in Richardson, J.G. (Ed.), Handbook of Theoryand Research for the Sociology of Education, Greenwood, New York, NY, pp. 241-258.

Bowen, F., Cousins, P., Lamming, R. and Faruk, A. (2001), “The role of supply managementcapabilities in green supply”, Production and Operations Management, Vol. 10 No. 2,pp. 174-189.

Brunnermeier, S.B. and Cohen, M.A. (2003), “Determinants of environmental innovation in USmanufacturing industries”, Journal of Environmental Economics andManagement, Vol. 45,pp. 278-293.

Burt, R.S. (1992), Structural Holes: The Social Structure of Competition, Harvard UniversityPress, Cambridge, MA.


359

Buysse, K. and Verbeke, A. (2003), “Proactive environmental strategies: a stakeholdermanagement perspective”, Strategic Management Journal, Vol. 24 No. 5, pp. 453-470.

Byosiere, P., Luethge, D.J., Vas, A. and Salmador, M.P. (2010), “Diffusion of organisationalinnovation: knowledge transfer through social networks”, International Journal ofTechnology Management, Vol. 49 No. 4, pp. 401-420.

Chiu, C.M., Hsu, M.H. and Wang, E.T.G. (2006), “Understanding knowledge sharing in virtualcommunities: an integration of social capital and social cognitive theories”, DecisionSupport Systems, Vol. 42, pp. 1872-1888.

Coleman, J. (1990), Foundations of Social Theory, Harvard University Press, Cambridge, MA.

Costantini, V. and Mazzanti, M. (2012), “On the green and innovative side of tradecompetitiveness? The impact of environmental policies and innovation on EU exports”,Research Policy, Vol. 41 No. 1, pp. 132-153.

Cousins, P. and Stanwix, E. (2001), “It’s only a matter of confidence! A comparison of relationshipmanagement between Japanese- and UK non-Japanese-owned vehicle manufacturers”,International Journal of Operations & Production Management, Vol. 21 Nos 9/10,pp. 1160-1179.

Dangelico, R.M. and Pujari, D. (2010), “Mainstreaming green product innovation: why and howcompanies integrate environmental sustainability”, Journal of Business Ethics, Vol. 95No. 3, pp. 471-486.

Dyer, J. (1997), “Effective interfirm collaboration: how firms minimize transactioncosts and maximize transaction value”, Strategic Management Journal, Vol. 18 No. 7,pp. 535-556.

Eiadat, Y., Kelly, A., Roche, F. and Eyadat, H. (2008), “Green and competitive? An empirical testof the mediating role of environmental innovation strategy”, Journal of World Business,Vol. 43 No. 2, pp. 131-145.

Gabarro, J.J. (1978), “The development of trust, influence, and expectations”, in Athos, A.G. andGabarro, J.J. (Eds), Interpersonal Behaviors: Communication and Understanding inRelationships, Prentice-Hall, Englewood Cliffs, NJ, pp. 290-303.

Geffen, C. and Rothenberg, S. (2000), “Suppliers and environmental innovation – the automotivepaint process”, International Journal of Operations & Production Management, Vol. 20No. 2, pp. 166-186.

Grandori, A. and Soda, G. (1995), “Inter-firms networks: antecedents, mechanisms and forms”,Organization Studies, Vol. 16 No. 2, pp. 183-214.

Handfield, R. and Bechtel, C. (2002), “The role of trust and relationship structure in improvingsupply chain responsiveness”, Industrial Marketing Management, Vol. 31 No. 4,pp. 367-382.

Inkpen, A.C. and Tsang, E.W.K. (2005), “Social capital, networks, and knowledge transfer”,Academy of Management Review, Vol. 30 No. 1, pp. 146-165.

Kanuk, L. and Berenson, C. (1975), “Mail survey and response rates: a literature review”, Journalof Marketing Research, Vol. 12 No. 4, pp. 440-453.

Klassen, R. (2000), “Exploring the linkage between investment in manufacturing andenvironmental technologies”, International Journal of Operations & ProductionManagement, Vol. 20 No. 2, pp. 127-147.

Lanoie, P., Patry, M. and Lajeunesse, R. (2008), “Environmental regulation and productivity:new findings on the Porter hypothesis”, Journal of Productivity Analysis, Vol. 30,pp. 121-128.

IJOPM34,3

360

Lee, S.-Y. (2008), “Drivers for the participation of small and medium-sized suppliers in greensupply chain initiatives”, Supply Chain Management: An International Journal, Vol. 13No. 3, pp. 185-198.

Lesser, E.L. (2000), “Leveraging social capital in organizations”, in Lesser, E.L. (Ed.), Knowledgeand Social Capital: Foundations and Applications, Woburn, Butterworth-Heinemann, MA,pp. 1-16.

Lovelace, K., Shapiro, D.L. and Weingart, L.R. (2001), “Maximizing cross-functional new productteams’ innovativeness and constraint adherence: a conflict communications perspective”,Academy of Management Journal, Vol. 44 No. 4, pp. 779-793.

McAllister, D.J. (1995), “Affect-based and cognition-based trust as foundations forinterpersonal cooperation in organizations”, Academy of Management Journal, Vol. 38No. 1, pp. 24-59.

Min, S., Kim, S.K. and Chen, H.Z. (2008), “Developing social identity and socialcapital for supply chain management”, Journal of Business Logistics, Vol. 29 No. 1,pp. 283-304.

Morgan, R.M. and Hunt, S.D. (1994), “The commitment-trust theory of relationship marketing”,Journal of Marketing, Vol. 58 No. 3, pp. 20-38.

Nahapiet, J. and Ghoshal, S. (1998), “Social capital, intellectual capital, and the organizationaladvantage”, Academy of Management Review, Vol. 23 No. 2, pp. 242-266.

Noci, G. and Verganti, R. (1999), “Managing ‘green’ product innovation in small firms”, R&DManagement, Vol. 29 No. 1, pp. 3-15.

Popp, D. (2006), “International innovation and diffusion of air pollution control technologies: theeffects of NOX and SO2 regulation in the US, Japan, and Germany”, Journal ofEnvironmental Economics and Management, Vol. 51 No. 1, pp. 46-71.

Popper, M. and Lipshitz, R. (1998), “Organizational learning mechanisms: a structural andcultural approach to organizational learning”, The Journal of Applied Behavioral Science,Vol. 34 No. 2, pp. 161-179.

Porter, M. and van der Linde, C. (1995), “Toward a new conception of theenvironment-competitiveness relationship”, Journal of Economic Perspective, Vol. 9 No. 4,pp. 97-118.

Pujari, D. (2006), “Eco-innovation and new product development: understanding the influenceson market performance”, Technovation, Vol. 26 No. 1, pp. 76-85.

Qi, G.Y., Shen, L.Y., Zeng, S.X. and Jorge, O.J. (2010), “The drivers for contractors’ greeninnovation: an industry perspective”, Journal of Cleaner Production, Vol. 18 No. 14,pp. 1358-1365.

Rackaham, L.F. and Ruff, R. (1995), Getting Partnering Right: How Market Leaders are CreatingLong-Term Competitive Advantage, McGraw-Hill, New York, NY.

Rao, P. and Holt, D. (2005), “Do green supply chains lead to competitiveness and economicperformance?”, International Journal of Operations & Production Management, Vol. 25Nos 9/10, pp. 898-916.

Rehfeld, K.M., Rennings, K. and Ziegler, A. (2007), “Integrated product policy andenvironmental product innovations: an empirical analysis”, Ecological Economics, Vol. 61No. 1, pp. 91-100.

Renzl, B. (2008), “Trust in management and knowledge sharing: the mediating effects of fear andknowledge documentation”, Omega-International Journal of Management Science, Vol. 36No. 2, pp. 206-220.


361

Sahay, B.S. (2003), “Understanding trust in supply chain relationships”, IndustrialManagement&Data System, Vol. 103 No. 8, pp. 553-563.

Schiederig, T., Tietze, F. and Herstatt, C. (2012), “Green innovation in technology and innovationmanagement – an exploratory literature review”, R&D Management, Vol. 42 No. 2,pp. 180-192.

Shi, V.C., Koh, S.C.L., Baldwin, J. and Cucchiella, F. (2012), “Natural resource based green supplychain management”, Supply Chain Management: An International Journal, Vol. 17 No. 1,pp. 54-67.

Simpson, D., Power, D. and Samson, D. (2007), “Greening the automotive supply chain:a relationship perspective”, International Journal of Operations & ProductionManagement, Vol. 27 No. 1, pp. 28-48.

Sitkin, S.B. and Roth, N.L. (1993), “Explaining the limited effectiveness of legalistic remedies fortrust distrust”, Organization Science, Vol. 4 No. 3, pp. 367-392.

Smith, K.G., Smith, K.A., Olian, J.D., Sims, H.P., OBannon, D.P. and Scully, J.A. (1994), “Topmanagement team demography and process: the role of social integration andcommunication”, Administrative Science Quarterly, Vol. 39, pp. 412-438.

Tsai, W.P. and Ghoshal, S. (1998), “Social capital and value creation: the role of intrafirmnetworks”, Academy of Management Journal, Vol. 41 No. 4, pp. 464-476.

Tsoukas, H. and Vladimirou, E. (2001), “What is organizational knowledge?”, Journal ofManagement Studies, Vol. 38, pp. 973-993.

Vachon, S. and Klassen, R.D. (2006), “Green project partnership in the supply chain: the caseof the package printing industry”, Journal of Cleaner Production, Vol. 14 Nos 5/6,pp. 661-671.

Wei, J.C., Liu, L. and Francesco, C.A. (2010), “A cognitive model of intra-organizationalknowledge-sharing motivations in the view of cross-culture”, International Journal ofInformation Management, Vol. 30 No. 3, pp. 220-230.

Welford, R. (1995), Environmental Strategy and Sustainable Development, Routledge, London.

Zhu, Q.H., Sarkis, J. and Geng, Y. (2005), “Green supply chain management in China: pressures,practices and performance”, International Journal of Operations & ProductionManagement, Vol. 25 Nos 5/6, pp. 449-468.

Zhu, Q.H., Sarkis, J. and Lai, K.H. (2011), “Green supply chain management innovationdiffusion and its relationship to organizational improvement: an ecologicalmodernization perspective”, Journal of Engineering & Technology Management, Vol. 29No. 1, pp. 168-185.

Further reading

Granovetter, M.S. (1992), “Problems of explanation in economic sociology”, in Nohria, N. andEccles, R. (Eds), Networks and Organizations: Structure, Form and Actions, HarvardBusiness School Press, Boston, MA, pp. 25-26.

Oh, H., Labianca, G. and Chung, M.H. (2006), “A multilevel model of group social capital”,Academy of Management Review, Vol. 31 No. 3, pp. 569-582.

About the authorsPing-Chuan Chen is currently a Senior Project Manager in the Industrial TechnologyResearch Institute (ITRI), the largest non-profit research organization in Taiwan. Mr Chen isalso a PhD candidate at the Department of Business Administration of National CentralUniversity, Taiwan. He received his LLB from the National Chung-Hsing University and MS

IJOPM34,3

362

from Yuan-Ze University of Taiwan. His research interest focuses on leveraging advancedtechnology for economic improvement and industrial development based on his practiceexperience.es on leveraging advanced technology for economic improvement and industrialdevelopment based on his practice experience.

Shiu-Wan Hung is currently the Professor at the Department of Business Administration ofNational Central University, Taiwan. She received her PhD from the Institute of Business andManagement of National Chiao Tung University, Taiwan. Before this, Dr Hung earned her MSfrom the University of Wisconsin-Madison in the USA and completed her BS from the NationalChengchi University of Taiwan. Her researches mainly focus on the areas of technologymanagement, knowledge management and performance management. Dr Hung has hadarticles published in the Information & Management, Scientometrics, Technovation, Computers& Operations Research, European Journal of Operational Research and other journals.Shiu-Wan Hung is the corresponding author and can be contacted at: [email protected]


363

To purchase reprints of this article please e-mail: [email protected] visit our web site for further details: www.emeraldinsight.com/reprints

collaborative green innovation in emerging countries: a social capital perspective

Documents