PUBLIC POLICY FRAMEWORKS FOR PROMOTING GREEN INNOVATION: IMPLICATIONS FOR THE PERFORMANCE OF A FIRM

Abstract

We examine the effects of public governance and policy frameworks on the growth of green innovation and its consequences for company performance. For the purpose of study, a survey with questions was sent to 412 individuals across 330 unique firms in different Pakistani industries. SmartPLS (PLS-SEM) and supplementary principal component analysis (PCA) were used for the statistical analysis of the collected data. The findings suggest that having a solid public policy supports green innovation which leads to a boost in a firm’s performance. The connection between public policies and how firms perform is mediated by green innovation which converts external pressures and impacts results positively. Green innovation initiatives seem to bring more advantage to the big firms and companies in manufacturing compared to small businesses and others. More pressure from stakeholders and greater environmental awareness push companies to focus on green innovation, proving the importance of public opinions on business policies. It offers direct advice that can be used by public policymakers, regulators, leaders, companies and stakeholders. Targeted policies, including support and rules, should be created by decision-makers to assist green innovation within small and medium-sized enterprises. Firms should make green innovation their main focus to improve their work, save money and compete better in market. Investors and customers have an important impact by demanding sustainable practices, helping to promote sustainability efforts.