NGUYÊN SỰ TÁC ĐỘNG CỦA ĐỔI MỚI XANH, HIỆU SUẤT MÔI TRƯỜNG ĐẾN HIỆU QUẢ CỦA CÁC DOANH NGHIỆP SẢN XUẤT TẠI VIỆT NAM

MINISTRY OF EDUCATION AND TRAINING
HO CHI MINH CITY OPEN UNIVERSITY

PHAM ANH NGUYEN
THE IMPACT OF GREEN INNOVATION AND
ENVIRONMENTAL PERFORMANCE ON FIRM
PERFORMANCE OF VIETNAMESE MANUFACTURING
ENTERPRISES
MAJOR: BUSINESS ADMINISTRATION
CODE: 9340101

SUMMARY OF DOCTORAL THESIS IN BUSINESS
ADMINISTRATION

Science instructor
Prof. Dr. Nguyen Minh Ha

Ho Chi Minh City - 2022


GUARANTEE
The author hereby declares that the thesis "The impact of green innovation and
environmental performance on firm performance of Vietnamese manufacturing enterprises " is my
own research.
The author hereby declares that no uncredited use of another person's research has been
made in this thesis, and to the best of my knowledge, no portion of the work mentioned in this
thesis has ever been submitted in support of an application for another degree or a degree from a
university or research institution.
Ho Chi Minh City, 2022

Pham Anh Nguyen

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TABLE OF CONTENT
Table list ..................................................................................................................... vi
Figure list .................................................................................................................... vi
CHAPTER 1: INTRODUCTION ............................................................................. 1
1.1 STUDY REASONS................................................................................................ 1
1.1.Practical reasons ..................................................................................................... 1
1.1.2 From previous study ............................................................................................ 2
1.2 PROBLEMS STATEMENT .................................................................................. 2
1.3 RESEARCH OBJECTIVE ..................................................................................... 2
1.3.1 General objective ................................................................................................. 3
1.3.2 Specific objectives ............................................................................................... 3
1.4 RESEARCH QUESTION ...................................................................................... 3
1.5 RESEARCH SUBJECT AND SCOPE .................................................................. 3
1.5.1 Research subject .................................................................................................. 3
1.5.2 Research scope .................................................................................................... 3
1.6 METHODOLOGY ................................................................................................. 3
1.7 NEW FINDINGS ................................................................................................... 4
1.8 STRUCTURE OF THESIS .................................................................................... 4
CHAPTER 2: LITERATURE REVIEW ................................................................. 5
2.1 CONCEPTS ............................................................................................................ 5
2.1.1 Factors affecting green innovation ...................................................................... 5
2.1.2 Green innovation ................................................................................................. 5
2.1.3 Environmental performance ................................................................................ 5
2.1.4 Firm performance ................................................................................................ 6
2.2 MAIN THEORIES ................................................................................................. 6
2.2.1 Green growth theory ............................................................................................ 6

2.2.2 Sustainable development theory .......................................................................... 6
2.2.3 Stakeholder theory ............................................................................................... 7
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2.2.4 Organizational effectiveness theory .................................................................... 7
2.2.5 Resource-based viewed theory ............................................................................ 8
2.2.6 Diffusion of innovation theory ............................................................................ 8
2.3 FACTOR AFFECTING GREEN INNOVATION ................................................. 8
2.4 IMPACT OF GREEN INNOVATION AND ENVIRONMENTAL PERFORMANCE
OF VIETNAMESE MANUFACTURING ENTERPRISES ....................................... 11
2.5 IMPACT OF GREEN INNOVATION, ENVIRONMENTAL PERFORMANCE
AND FIRM PERFORMANCE OF VIETNAMESE MANUFACTURING
ENTREPRISES ............................................................................................................ 11
2.6 REVIEWING PREVIOUS STUDIES ................................................................... 13
2.7 PROPOSED RESEARCH MODEL....................................................................... 13
CHAPTER 3: METHODOLOGY ............................................................................ 15
3.1 RESEARCH DESIGN............................................................................................ 15
3.2 RESEARCH PROCEDURE .................................................................................. 16
3.3 QUALITATIVE METHODS ................................................................................. 16
3.4 MEASUREMENT SCALE .................................................................................... 16
3.4.1 Relative advantage (LTD) ................................................................................... 16
3.4.2 Compatibility (KTT) ........................................................................................... 17
3.4.3 Simplicity (SDD) ................................................................................................. 17
3.4.4 Organizational support (HTC) ............................................................................. 17
3.4.5 Quality of human resources (CNL) ..................................................................... 17
3.4.6 Customer pressure (AKH) ................................................................................... 17
3.4.7 Government pressure (ACP) ............................................................................... 17
3.4.8 Government support (HCP) ................................................................................. 17
3.4.9 Environmental uncertainty (DTT) ....................................................................... 17

3.4.10 Green product innovation (DSP) ....................................................................... 17
3.4.11 Green process innovation (DQT) ...................................................................... 17
3.4.12 Environmental performance (SMT) .................................................................. 17
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3.4.13 Financial performance (HQC) ........................................................................... 18
3.4.14 Non-Financial performance (HQP) ................................................................... 18
3.5 QUANTITATIVE METHODS .............................................................................. 18
3.5.1 Questionnaire ....................................................................................................... 18
3.5.2 Sample size .......................................................................................................... 18
3.5.3 Sampling method ................................................................................................. 18
3.5.4 Data Analysis Methods........................................................................................ 18
CHAPTER 4: RESULTS ANALYSIS ...................................................................... 19
4.1 DESCRIPTIVE STATISTICS ............................................................................... 19
4.2 SCALE DESCRIPTIVE ......................................................................................... 21
4.3 SCALE VALIDITY ASSESSMENT ..................................................................... 21
4.3.1 Cronbach’s Alpha ................................................................................................ 21
4.4 EXPLORE FACTOR ANALYSIS (EFA) ............................................................. 23
4.4.1 EFA analysis of the Independent variables ......................................................... 23
4.4.2 EFA analysis of the Dependent Variables ........................................................... 23
4.5 MEASUREMENT MODEL VALIDITY ASSESSMENT .................................... 23
4.5.1 Outer loadings ..................................................................................................... 23
4.5.2 Composite Reliability .......................................................................................... 23
4.5.3 Discriminant Validity .......................................................................................... 23
4.6 STRUCTURAL MODEL ASSESSMENT ............................................................ 24
4.6.1 R square (R2) ....................................................................................................... 24
4.6.2 Variance Inflation Factor (VIF)........................................................................... 24
4.6.3 Path coefficients .................................................................................................. 24
4.6.4 Effect Size value (f2) ........................................................................................... 27

4.6.5 Hypothesis testing results .................................................................................... 27
4.7 RESULT DISCUSSION ........................................................................................ 28
4.7.1 Result of the Green Innovation scale (DMX) ..................................................... 28
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4.7.2 Result of the Environmental scale (SMT) ........................................................... 28
4.7.3 Result of regression model .................................................................................. 29
4.7.4 The results of the research hypothesis ................................................................. 29
4.7.5 Recommendations for businesses ........................................................................ 35
CHAPTER 5: CONCLUSION & POLICY IMPLICATIONS .............................. 36
5.1 CONCLUSION ...................................................................................................... 36
5.2 NEW FINDINGS ................................................................................................... 37
5.3 POLICY IMPLICATIONS .................................................................................... 39
5.3.1 Technological factors .......................................................................................... 39
5.3.2 Organizational factors ......................................................................................... 39
5.3.3 Environmental factors ......................................................................................... 40
5.3.4 Green innovation ................................................................................................. 40
5.3.5 Environmental performance ................................................................................ 41
5.3.6 Firm performance ................................................................................................ 41
5.4 LIMITATION & FUTURE RESEARCH .............................................................. 42
5.4.1 Limitations ........................................................................................................... 42
5.3.6 Future research .................................................................................................... 42
REFERENCES ........................................................................................................... 44

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TABLE LIST
Table 2.1 Research hypothesizes .................................................................................. 14

Table 3.1 Summary of qualitative method results ........................................................ 15
Table 4.1 Demographic of respondents ........................................................................ 19
Table 4.2 Path Coefficients .......................................................................................... 25

FIGURE LIST
Figure 2.1 Proposed research model ............................................................................ 14
Figure 4.1 Structural Modeling .................................................................................... 26

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CHAPTER 1: INTRODUCTION
1.1 STUDY REASONS
1.1.1 Practical reasons
Environmental degradation and resource depletion are also results of the economy's
fast expansion and the vast expansion of businesses. Manufacturing companies are
frequently cited as one of the primary contributors to the environmental issues the world is
now experiencing. The reason is that our nation's businesses still operate at a low level of
economic efficiency, poor innovation, and backward technology.
In fact, businesses pay little attention to community, social, and environmental
benefits, instead focusing on organizational profits (Nham, 2012). They are also hesitant
to invest in equipment and production technology to protect the environment because it
consumes a lot of costs that can affect enterprise profits. Following a period of fast
economic expansion, Vietnam confronted the immense task of balancing economic
development and environmental sustainability (O'Rourke, 2004). Despite increased efforts,
available research indicates that environmental rules in Vietnam have not been very
successful in terms of company compliance, with low levels of compliance seen in critical
industries such as food, leather, and paper (Ho, 2015).
Vietnamese customers are now prepared to pay more for companies with "green"
and "clean" pledges, green products, and items that fulfill quality safety requirements and

are increasingly ecologically friendly. become the people's true needs. As a result,
businesses that do not aggressively develop to generate environmentally friendly goods
would struggle to fulfill demand and attract customers, resulting in low competitiveness
and economic efficiency.
Companies are currently actively offering solutions to minimize costs in the
manufacturing process, adopt lean production to reduce costs and waste, and enhance
competition to achieve high profitability in the global market (Brigham and Houston, 2012;
Tortorella et al., 2018).
Green innovation is one of the effective solutions that companies are particularly
interested in since it can assist businesses to minimize production costs, generate product
differentiation, and help businesses achieve competitive advantage. Controlling input
resources, energy consumption, and waste in the manufacturing process improves
corporate efficiency (Chen & Liu, 2019). Enterprises that invent green digital technologies
in the manufacturing process, in particular, will make a significant contribution to attaining
competitive efficiency and profit goals while conserving the environment and increasing
quality of life. provides a significant possibility for more ecologically friendly
manufacturing while meeting corporate profit objectives (Rüßmann et al., 2015; Stock &
Seliger, 2016).
The goal of upgrading the level of production technology is to assist firms in being
proactive in regulating the environmental consequences of the manufacturing process, as
well as to perform effectively in environmental protection activities, leading to the growth
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of clean technology enterprises. Environmental friendliness, lowering greenhouse gas
emissions; and contributing to increased competitiveness and green growth are critical
needs for our country's businesses today.
The thesis will investigate the level of impact of the elements influencing green
innovation, as well as the link between green innovation, environmental performance, and
firm performance, and will provide solutions based on the aforementioned practical needs.

steps to encourage firms to engage in environmental protection activities, create corporate
growth plans in the most effective and sustainable manner, earn the maximum profits, and
contribute to the improvement of social life
1.1.2 From previous studies
Researchers have demonstrated a significant deal of interest in studies on the
relationship between green innovation and firm performance, and these studies have
produced findings on the relationship in related industries.
Green innovation's influence on corporate success, including financial and nonfinancial performance, as well as its effects on the environment, have not been well
investigated. adequate in prior research. In this thesis, the following issues will be explored
in depth:
First, empirical research around the globe and Vietnam still has many controversies
about the scale for the concepts of factors affecting green innovation, green innovation,
environmental performance, and business performance. Despite the debate, the
measurements scale and study findings are not widely agreed upon. Thus, the thesis
clarifies the research concepts and also takes into account and develops the research scales
to fit the research context and objectives.
The impact of green innovation on environmental performance and business
performance has not been simultaneously investigated, and there are nine component scales
of variables on technology, organization, and environment for its implementation. In order
to clarify the relationship between the factors and provide a fairly thorough analytical
framework on the association between the relationship between factors affecting green
innovation, the influence of green innovation, and environmental performance on firm
performance, the thesis will test the research model and hypothesis about the relationship
between the observed variables.
Third, the results of previous studies on the relationship between green innovation,
environmental performance, and enterprise efficiency are still inconsistent. Therefore, this
thesis will empirically study the effects of these three factors to clarify this issue.
Last and especially important, the mediating role of environmental performance on
the relationship between green innovation and corporate performance, including both
financial and non-financial performance, has not been found in previous studies. The thesis

will explore the mediating role of environmental performance to answer this issue.
1.2 PROBLEMS STATEMENT
1.3 RESEARCH OBJECTIVE
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1.3.1 General objective
This study has the general objective of analyzing the factors affecting green
innovation and analyzing the relationship between green innovation and firm performance
through the intermediate variable, environmental performance.
1.3.2 Specific objectives
This study has the following specific objectives:
(1) Determining the factors affecting the green innovation of manufacturing
enterprises in Vietnam
(2) Determining the impact of green innovation on the environmental performance
of manufacturing enterprises in Vietnam
(3) Determining the impact of environmental performance on firm performance of
manufacturing enterprises in Vietnam
(4) Determining the impact of green innovation on firm performance of enterprises
through the mediating role of environmental performance
(5) Suggesting management implications to improve firm performance of
manufacturing enterprises through green innovation and environmental performance.
1.4 RESEARCH QUESTION
(1) Which factors affect green innovation of manufacturing enterprises in Vietnam?
(2) How does green innovation affect the environmental performance of
manufacturing enterprises in Vietnam?
(3) How does environmental performance affect the firm performance of
manufacturing enterprises in Vietnam?
(4) How does green innovation affect the firm performance of manufacturing
enterprises in Vietnam through the mediating role of environmental performance?

(5) What recommendations and solutions can help manufacturing enterprises in
Vietnam promote green innovation to develop enterprises effectively and achieve
environmental performance?
1.5 RESEARCH SUBJECT AND SCOPE
1.5.1 Research subject
This study explores the impact of factors (technology, organization, environment)
impacting green innovation and the relationship between green innovation, environmental
performance, and firm performance.
1.5.2 Research scope
The survey subjects are directors of 400 production enterprises in key industrial
zones in provinces and cities across the country. May–June 2021 is the survey period.
1.6 METHODOLOGY
- Qualitative method: Face-to-face interview and group discussion.

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- Quantitative method: Survey questionnaire (scale development and construction,
preliminary and official), use of Smart 3.3.2 and SPSS 22.0 for statistical analysis based
on characteristic samples and scale testing, reliability test of Cronbach's Alpha scale,
exploratory factor analysis (EFA), partial least squares structural model (PLS-SEM), the
study will conduct a formal survey during the development and validation of the scale with
a sample size of 400 using a convenient sampling technique.
1.7. NEW FINDINGS
1) Clarifying the concepts and finding out the relationship between the factors
affecting green innovation, the influence of green innovation, and environmental
performance on the efficiency of enterprises.
2) Testing models and research hypotheses about the relationship between factors
affecting green innovation (factors on technology, organization, and external
environment), green innovation, environmental performance, and firm performance

(including financial and non-financial performance) have not been studied simultaneously.
3) Research on the mediating role of environmental performance on the relationship
between green innovation and firm performance including financial and non-financial
performance.
4) Building and adding a new scale for all the factors in the model based on
integrating the previous scales in accordance by the research context in Vietnam.
In terms of governance, the study's results help managers in understanding the
crucial components that significantly impact green innovation and the extent to which it
influences efficiency. of manufacturing companies so that businesses could create highquality policies and strategies for their particular circumstances in order to achieve their
objectives of sustainable company growth and profit maximization in the present market
environment.
1.8. STRUCTURE OF THESIS
Chapter 1. Introduction
Chapter 2. Literature review
Chapter 3. Methodology
Chapter 4. Result of analysis
Chapter 5. Conclusions and policies implications

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CHAPTER 2: LITERATURE REVIEW
2.1 CONCEPTS
2.1.1 Factors affecting green innovation
Relative advantage is the degree to which an innovation is considered to have an
advantage over its alternative ideas, which can be measured in economic or social terms
such as performance, satisfaction, reputation, and convenience (Rogers, 2003).
Compatibility is the degree to which an innovation is considered to be compatible with the
current values, experiences, and needs of companies for future change (Rogers, 2003).
Complexity is the degree to which an innovation is perceived as difficult to understand and

use, which increases the difficulty of knowledge transfer and innovation dissemination
(Rogers, 2003). Therefore, the simplicity of technological innovation can be understood as
the degree to which innovation is perceived as easy to understand and use, easy to transfer
knowledge; and to disseminate innovation.
Organizational support is the extent to which a company supports employees,
providing incentives for the use of a particular technology or system that will affect
effectively innovation (Lin & Ho, 2011). The quality of human resources is the
fundamental principle that means that companies can influence and shape the skills,
attitudes, and behaviors of individuals to perform their jobs and thus achieve their goals.
organizational goals (Collins & Clark, 2003; Martinsons, 1995).
Customer pressure refers to the requirements of consumers and business customers,
i.e. key groups of key stakeholders, for a company to improve its environmental and social
performance (Ateş et al. ., 2011; Ehrgott et al., 2011). Government pressure is defined as
the perceived pressure (for green innovation) that the government exerts through
regulations and enforcement (Huang et al. 2016). Government support is a relevant
environmental factor affecting green innovation as the government can advance innovation
through incentive policies such as providing financial incentives, technical resources, pilot
projects, and training programs (Scupola, 2003; Tornatzky & Fleischer, 1990). Market
uncertainty refers to a state caused by external events (Wong et al., 2011), and may be the
extent to which future events and states cannot be foreseen (Pfeffer & Salancik, 1978).
2.1.2 Green innovation
Green innovation is also defined as new or modified processes, techniques,
practices, systems, and products that enable enterprises to continuously improve their
production and business efficiency while maintaining sustainable development, decreasing
the cost of raw materials, increasing production capacity; and practicing social
responsibility to avoid or minimize harm to the environment (Kemp et al., 2001; Beise &
Rennings, 2005).
2.1.3 Environmental performance
Environmental performance can be basically defined as the extent to which
companies meet their stakeholders' expectations for environmental responsibility (Ruf et

al., 1998; Carroll, 2000).
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2.1.4 Firm performance
Financial efficiency is a company's ability to manage and control resources (IAI,
2016); and is the financial condition of the company for a given period including the
collection and use of capital as measured by several indicators of capital adequacy ratio,
liquidity, leverage, solvency, and profitability (Fatihudin et al., 2018). Non-financial
performance is a quantitative measure of enterprise performance that cannot be expressed
in valuable monetary units in evaluating and promoting the management performance of
enterprises, non-financial performance is often measured by factors such as customer
satisfaction, product quality, supplier reliability, company reputation, or, competitive
advantage (Dury et al., 1993; Amad & Zabri, 2016).
2.2 MAIN THEORIES
2.2.1 Green growth theory
With comprehensive policy changes, a nation may implement a green growth plan
for its economic, social, technical, environmental, and development elements (Dinda,
2013). The green growth hypothesis is founded on the notion that it is feasible to decouple
GDP development from resource usage and carbon emissions, and that this decoupling can
occur quickly enough to prevent the hazards of climate change and other forms of
ecological disturbance. UNEP (2011) defines green growth as one that improves human
health and social equity, while significantly reducing environmental risks and scarce
resources. It is low carbon, resource-efficient, and socially inclusive. The good
implementation of green growth and environmental protection will help businesses develop
sustainably, through activities, such as: complying with the law on environmental
protection; pollution control; reducing garbage; saving resources, etc. (OECD, 2012), and
seeking competitive advantages through investment in clean technology, taking action to
protect the environment also creates new business opportunities.
Therefore, this study uses the green growth theory of UNEP (2011) to propose

hypotheses about the impact of green innovation on environmental performance and firm
performance.
2.2. Sustainable development theory
Sustainable Development Theory (Sustainable Development) emerged in the 1980s,
focused on the synchronous development of the economy, society, and environment, and
entered the high-level political agenda (Shi. et al., 2019). The United Nations' World
Council on Environment and Development (WCED, 1987) defines sustainable
development as "development that meets the needs of the present but does not interfere
with meeting the needs of future generations", emphasizing the effective use of natural
resources and ensuring the living environment for people in the development process.
Criteria for an overall assessment of sustainable development may include stable economic
growth; making good progress and social justice; rational exploitation, economical use of
natural resources, and protection and improvement of living environment quality. In this
study, green innovation was used to develop green goods with the intention of conserving
6


resources, making the best use of them, and protecting the environment by reducing
emissions. Towards sustainable development, attain economic effectiveness, and protect
the environment. Businesses help the nation's economy develop sustainably.
As a result, this study employs WCED's (1987) theory of sustainable development
to propose hypotheses regarding how the performance of businesses is impacted by green
innovation.
2.2.3 Stakeholder theory
Stakeholder theory was first proposed by Freeman (1984) as an approach for
managing corporations in the latter half of the 20th century, and it claims that businesses
should consider the interests of other stakeholders when making decisions that may affect
the company strategically. Stakeholders, according to Freeman (1984), are persons or
organizations (such as consumers, workers, company owners, communities, shareholders,
etc.) that can influence or be affected by the accomplishment of an organization's objective.

This stakeholder theory argued that in order to ensure the long-term success of the
company, the organization must treat its stakeholders equally and, in the event of a conflict
of interest, must find a mutually beneficial compromise. Using the stakeholder theory as a
guide, Weng & Lin (2011) found that firms engage in strategic actions aimed at appeasing
their major stakeholders and are curious about both internal and external issues. The key
forces behind green innovation, or the means through which a corporation may thoroughly
address stakeholder issues to achieve commercial objectives, are customer expectations or
governmental laws (Weng et al., 2015). The success of a firm in the modern marketplace,
therefore, is greatly influenced by gaining a comprehensive understanding of the impact
that each stakeholder in a company has on adopting green technologies.
Therefore, the stakeholder theory of Freeman (1999) was applied in this study to
propose hypotheses about the impact of organizational and environmental factors on green
innovation.
2.2.4 Organizational effectiveness theory
According to Cameron (1978), an organization's ability to efficiently use its most
valuable resources is a key component of its organizational performance. When an
organization is operating effectively, it creates products with no waste and generates
revenues by creating and selling goods that minimize costs or maximize earnings. The goal
model, the resource system model, the process model, the strategy model, and the value
competition technique are five methods that theorists have suggested to measure
organizational performance (Chelladurai et al., 1987; Yuchtman & Seashore 1967).
Researchers have created and established a set of criteria for evaluating organizational
performance from a variety of angles, although the majority of the study focuses on
financial and non-financial components. The notion of efficiency has generally been used
in studies throughout the world to compare the overall income (benefits) produced by an
operating process over a specific period to the capital spent by the firm. Enterprises may
learn about the outcomes of their present resource exploitation in comparison to their full
7

capacity and learn about the factors that influence output efficiency by calculating the
efficiency of resource utilization.
Therefore, the Organizational effectiveness theory of Price (1968) Yuchtman and
Seashore (1967) Chelladurai and colleagues (1987) were applied in this study to propose
hypotheses about the impact of green innovation on environmental performance and firm
performance.
2.2.5 Resource-based view theory
Resources can be widely defined to include assets, organizational processes, firm
qualities, information, or knowledge that is within the control of the organization and that
can be utilized to develop and carry out organizational plans. surname. The inside-out or
company-specific perspective on why businesses succeed or fail in the marketplace is
provided by the resource-based view (RBV) (Dicksen, 1996). According to Barney (1986),
a valuable resource must allow a business to act and perform in a way that increases sales,
lowers expenses, increases profits, or adds value in other ways financially. contribute to
the business and help a business create or put into practice plans to enhance performance.
RBV aids managers in understanding why resources may be viewed as a company's most
valuable asset while also appreciating how those assets can be utilized to enhance
performance and produce better business results. RBV theory states that implementing
green innovation helps businesses to achieve environmental performance, competitive
advantage, and sustainable development in the future. Green innovation is viewed as a
significant intangible resource that is challenging to replicate by an organization (Fernando
& Wah, 2017).
Therefore, the resource-based view theory of Barney (1991) was applied in this
study to propose hypotheses about the impact of green innovation on environmental
performance and firm performance.
2.2.6 Diffusion of innovation theory
In the area of technology diffusion and application, Rogers' innovation diffusion
theory (2003; Parisot, 1995) is a commonly used theoretical framework. It is considered
suitable to examine how new technology is used in a variety of disciplines. Rogers (2003)
defined innovation diffusion as a method of lowering uncertainty and suggested

characteristics of innovation that help in lowering innovation-related uncertainty. The
characteristics of innovation consist of the following five traits: relative advantage,
compatibility, complexity, testability, and observability. According to Rogers (2003),
innovations that offer more relative advantages, compatibility, simplicity, testability, and
observability than other innovations will be adopted more quickly. He also points out that
an innovative idea is never easy to implement, even when there are obvious benefits, and
thus the availability of all these new transformations will hasten the diffusion of innovation.
Therefore, the theory of innovation diffusion of Rogers (2003) was applied in this
study to propose hypotheses about the impact of technology factors on green innovation.
2.3 FACTORS AFFECTING GREEN INNOVATION
8


Based on prior research, this study investigates the link of the three elements of
technology, organizational factors, and environmental factors to green innovation since
these aspects are likely to impact the application of green innovation (Lin & Ho, 2011;
Ruslan, 2014).
Technology factors
Previous research findings (Sia et al., 2004; Lin & Ho, 2011; Kousar et al., 2017)
showed that the relative advantage and compatibility of the technology had an influence.
Complexity is said to have a detrimental influence on the adoption of green innovation.
The relative advantage might be in terms of price, quality, and convenience of use, as well
as the durability and satisfaction that the organization can have after implementing the
innovation. As a result, firms are more willing to adopt innovation and seek higher
economic benefits when the relative advantage of innovation is greater (Lin & Ho, 2011;
Rogers, 2003). Adoption of green innovation is frequently associated with relative
advantage (Rogers et al., 2012; Tornatzky et al., 2008). Compatibility reflects an
organization's perception of technology's consistency with its existing values, experiences,
and needs (Rogers, 2003), so if a company perceives that technology to be compatible with
the organization's existing knowledge, the organization will be easily persuaded to adopt

that technological innovation (Chau & Tam, 1997). Previous research has found that
compatibility has a favorable influence on the adoption of green innovation (Lin & Ho,
2011; Kousar et al., 2017). The degree to which a company finds technology challenging
to understand and apply is reflected in the complexity of innovation. The researchers
proposed the following hypothesis: As technology complexity rises, the likelihood of
innovation adoption declines. Additionally, challenges with innovation diffusion and
knowledge sharing (Tornatzky & Klein, 1982) raise the level of technical complexity,
which makes an organization more likely to adopt an innovation if such knowledge can be
easily shared within the organization. Knowledge transfer and innovation dissemination
challenges are frequently seen negatively in terms of innovation adoption (Rogers, 2003;
Tornatzky & Klein, 1982; Lin & Ho, 2011; Weng & Lin, 2011). This suggests that
technological factors are expected to have a positive effect on green innovation.
Based on the findings of the previous research and Roger's (2003) innovation
diffusion theory, the research hypothesizes are proposed as follows:
H1: Relative advantage has a positive impact on green innovation of Vietnamese
manufacturing enterprises
H2: Compatibility has a positive impact on green innovation of Vietnamese
manufacturing enterprises
H3: Simplicity has a positive impact on green innovation of Vietnamese
manufacturing enterprises
Organizational factors
This study categorizes two main stakeholder groups as internal (workers, firm
executives) or external influences using Freeman's (1999) Stakeholder Theory. Customers
9


and the government are examples of external factor that prior research have shown to
positively influence how businesses use green innovation (Lin & Ho, 2011; Wang et al.,
2016; Ibrahim et al., 2018). Since the factors relating to organizational resources are
extensively examined in the study of technological innovation and the management

environment, the focus of this study is primarily on the quality of human resources and the
support of the organization. (Weng et al., 2015; Lin & Ho, 2011; Lee, 2008). Adopting
green innovations can benefit businesses with competent human resources, which research
(Lin & Ho, 2011; Weng et al., 2011) has shown to have a beneficial influence on the
adoption of green innovations in firms. According to previous research (Soliman & Janz,
2004; Teo et al., 2009), organizational support, particularly from senior management,
positively affects the adoption of green innovation. This implies that organizational
characteristics are expected to positively affect green innovation.
Based on the findings of the previous research and Freeman’s(1999) stakeholder
theory, the research hypothesizes are proposed as follows:
H4: Organizational support has a positive impact on the green innovation of
Vietnamese manufacturing enterprises
H5: Quality of human resources has a positive impact on green innovation of
Vietnamese manufacturing enterprises
Environmental factors
This study focuses primarily on the pressure from stakeholders, specifically
customers and regulations pressure, government support, and environmental uncertainty
because these are the factors that are confirmed by prior studies to affect the adoption of
green innovation in enterprises (Lin & Ho, 2011; Weng et al., 2015; Guo et al., 2018).
According to stakeholder theory, businesses carry out activities to satisfy their major
stakeholders. Customers and regulators are among the different stakeholders who are seen
as being among the most important to business stakeholders (Christmann, 2004; Etzion,
2007). According to the findings of earlier studies, there is a relationship between business
activities and customer and regulatory pressure (Christmann, 2004; Lee, 2008; Wong &
Fryxell, 2004). Thus, it is anticipated that government and consumer pressure will have a
positive effect on green innovation. According to studies by Aragon-Correa, Sharma, Lee,
and Ai from 2003, 2008, and 2010, the authors demonstrate how government support
policies may help enterprises make up for a lack of technical innovation. Companies are
also more likely to implement green technologies to generate the possibility of improving
firm performance and environmental performance in environmental uncertainty (AragonCorrea & Sharma, 2003; Rothenberg & Zyglidopoulos, 2007). This suggests that

environmental factors could influence green innovation in a helpful manner.
Based on the findings of the previous research and Freeman’s (1999) stakeholder
theory, the research hypothesizes are proposed as follows:
H6: Customer pressure has a positive impact on green innovation of Vietnamese
manufacturing enterprises
10


H7: Government pressure has a positive impact on green innovation of Vietnamese
manufacturing enterprises
H8: Government support has a positive impact on green innovation of Vietnamese
manufacturing enterprises
H9: Environmental uncertainty has a positive impact on green innovation of
Vietnamese manufacturing enterprises
2.4 IMPACT OF GREEN INNOVATION AND ENVIRONMENTAL
PERFORMANCE OF VIETNAMESE MANUFACTURING ENTERPRISES
For businesses to compete in today's market, they should develop and implement
environmentally friendly products or manufacturing processes that support energy
efficiency. This is an effective strategy that is frequently employed by businesses to reduce
waste during production, minimize their negative impact on the environment, and achieve
exceptional economic efficiency (Dangelico & Pujari 2010; Triguero et al., 2013).
Environmental performance, or the general objective of green innovation, is to minimize
pollution, energy consumption, and waste, and to substitute precious resources with
sustainable or recycled ones (Kemp & Arundel, 1998). Researchers frequently evaluate
environmental performance by looking at factors including emissions, wastewater, solid
waste, effective input material utilization, frequency of environmental incidents, and the
environmental state of businesses. Improvements in manufacturing techniques and green
productivity will increase the likelihood of improving environmental performance,
according to Montabon et al. (2007) and Seman et al. (2019), and research by Zhang et al.
(2017) shows that the majority of green innovation in enterprises will reduce carbon

emissions. This implies that green innovation is predicted to have a positive effect on green
innovation. Based on the findings above, the research hypothesis is proposed as follows:
H10: Green innovation has a positive impact on the environmental performance of
Vietnamese manufacturing enterprises
2.5 IMPACT OF GREEN INNOVATION, ENVIRONMENTAL PERFORMANCE,
AND FIRM PERFORMANCE OF VIETNAMESE MANUFACTURING
ENTERPRISES
Previous studies have demonstrated that green innovation activities, which may also
include green product design and environmental stewardship, can assist firms in reducing
their energy use, preventing pollution, or enabling trash recycling (Lin et al., 2019). Based
on the findings of the research on green innovation for businesses, it is evident that both
good and negative changes can occur in an organization's financial performance when
Green innovation is implemented and a sustainable living environment is maintained.
Some studies show that green innovation has a negative impact on the financial
performance of enterprises. According to several research, green innovation has a
detrimental effect on how profitable businesses are. According to studies (Walley &
Whitehead, 1994; Palmer et al., 1995), social responsibility and environmental compliance
cost businesses more expense, which will be passed on to customers in the form of
11


increased product costs, a competitive disadvantage in the market, and reduced profitability
(Aupperle et al., 1985; Guerard, 1997). The majority of research claims that, in contrast to
the findings mentioned above, compliance with environmental standards might encourage
businesses to implement green innovation to boost productivity. Being the first to create
green, eco-friendly solutions that increase organizational performance and lower
environmental compliance costs can help you use raw materials more efficiently, reduce
profit loss brought on by regulations, and achieve financial efficiency (Altman, 2001;
McWilliams & Siegel 2001; Chang; 2011; Singh el al., 2020; Asadi et al., 2020).
Additionally, it has been demonstrated that green innovation affects the non-financial

performance of businesses, which is frequently gauged by factors including customer
satisfaction, product quality, suppliers reliability, brand recognition, and competitive
advantage in particular (Porter & Van Der Linde, 1995; Ahmad & Zabri, 2016; Gurlek &
Tuna, 2017). That suggests that green innovation is anticipated to have a favorable effect
on the effectiveness of green space. The findings of the investigations mentioned above led
to the following research hypotheses:
H11: Green innovation has a positive impact on the firml performance of Vietnamese
manufacturing enterprises
Previous studies have claimed that green innovation is difficult to accomplish and
that environmental responsibility costs businesses capital (Aupperle et al., 1985; Walley &
Whitehead, 1994). On the other hand, Prace (2005) argued that efficient environmental
performance can also benefit more through the perception of green products and
environmentally sound products, decreasing costs to deal with pollution, and raising
enterprise productivity, as inefficient production processes will cost energy and new
resources and result in environmental pollution. The main arguments of earlier research
have supported the positive correlation between an enterprise's environmental performance
and its financial and non-financial performance, i.e., that environmental performance is a
performance-enhancing innovation (Aguilera-Caracuel & Ortiz-de-Mandojana, 2013;
Porter & Van der Linde, 1995), enhances corporate legitimacy (Hart, 1995), enhances
sustainable competitive advantage (Hart, 1995; Russo & Fouts, 1997), increases the
environmental reputation of the company and employee engagement (Dögl & Holtbrügge,
2013), and demonstrates the organization's excellent managerial qualities (Aragón-Correa,
1998; Aschehoug et al., 2012) by boosting productivity, business profitability, and cutting
expenses associated with environmental compliance. Therefore, environmental
performance is expected to positively affect firm performance.
The findings of the investigations mentioned above led to the following research
hypotheses:
H12: Environmental performance has a positive impact on the firm performance of
Vietnamese manufacturing enterprises

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2.6 REVIEWING PREVIOUS STUDIES
2.7 PROPOSED RESEARCH MODEL
Table 2.1 Research hypothesizes
H1

Relative advantage

has a positive impact on

green innovation

H2

Compatibility

has a positive impact on

green innovation

H3

Simplicity

has a positive impact on

green innovation

H4

Organizational support

has a positive impact on

green innovation

H5

Quality of human

has a positive impact on

green innovation

resources
H6

Customer pressure

has a positive impact on

green innovation

H7

Government pressure

has a positive impact on

green innovation

H8

Government support

has a positive impact on

green innovation

H9

Environmental uncertainty

has a positive impact on

green innovation

H10 Green innovation

has a positive impact on

firm performance

H11 Green innovation

has a positive impact on

environmental

performance

H12 Environmental

has a positive impact on

firm performance

performance

Based on the above hypotheses, the research model is proposed as follows:
- Independent variables: Relative advantage, Compatibility, Simplicity,
Organizational support, Quality of human resources, Customer pressure, Government
pressure, Government support, and Environmental uncertainty.
- Intermediate variables: Green innovation, Environmental performance.
- Dependent variable: Firm performance.

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TECHNOLOGICAL FACTORS
Relative
advantage

Compatibility

(H1)

Environmental
performance

(H2)

Simplicity

ORGANIZATIONAL FACTORS

(H12)

(H10)

(H3)

Green
innovation

(H4)

Firm
performance
(H11)

(H5)

Organizational
support

(H6)

Quality of human
resources

Environmental factors
Customer
pressure
Government
pressure

(H7)

(H8)

Figure 2.1 Proposed research model
Government
support

(H9)

Environment
uncertainty

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CHAPTER III: METHODOLOGY
3.1 RESEARCH DESIGN
The research process is carried out through the following basic steps in the following
order: (1) Problem statement; (2) Research objectives; (3) Reviewing previous theories and
research related to the relationship between factors affecting green innovation, the
relationship between green innovation, environmental performance, and firm performance;
(4) Finding research gaps and proposing research hypotheses and models: (5) Selecting

and adjusting the scale; (6) Sampling and data collection; (7) Data analysis including
descriptive statistics, scale validity assessment, measurement model and structural model;
(8) Discussion; (9) Implications.
In particular, this thesis uses a mixed method. Quantitative methods are mainly used
to analyze all data and explain the results. Qualitative methods were used to develop the
scale.
- The qualitative method is used to adjust the scale. With reference to the theoretical
foundations and scale of previous studies, the thesis developed a preliminary scale that was
then completed, adjusted, and finalized using qualitative approaches. The study uses the
group discussion method with a sample size of 10 people including staff of the
Management Economic Zone, Department of Natural Resources and Environment, the
Management Boards of the zones, and representatives of typical production enterprises
located in industrial zones and clusters. The research then employed the technique of indepth interviews with six subject-matter experts in business and the environment. The
study model will be improved with the help of in-depth interviews and focus groups as well
as adjustments to the scale and the observed variables in the research.
Table 3.1 Summary of qualitative method results
Constructs

Expected scale

Qualitative

Results

methods
A

Technological

137

16

153

factors
1

LTD

10

3

13

2

KTT

8

1

9

3

SDD

8

-1

7

B

Organizational
factors

1

HTC

13

-1

12

2

CNL

8

3

11

C

Environmental
factors
15


1

AKH

8

3

11

2

ACP

9

2

11

3

HCP

8

2

10

4

DTT

7

1

8

D

Green
innovation

1

DSP

7

2

9

2

DQT

12

-1

11

E

Environmental

14

2

16

performance
SMT
F

Firm
performance

1

HQC

11

0

11

2

HQP

14

0

14

- Quantitative methods: Quantitative methods were used in this study such as descriptive
statistics analysis, scale reliability analysis, exploratory factor analysis (EFA), and structural
equation modeling (SEM) to estimate relationships between concepts. Specifically, the
quantitative analysis activities are studied as follows: Descriptive statistics, Composite Reliability,
Convergence validity, Discriminant validity, Multicollinearity statistics, Path coefficient, R
square, and f square.
3.2 RESEARCH PROCEDURE
3.3 QUALITATIVE METHODS
In this thesis, qualitative research is carried out through two specific steps as follows:
Step 1: Conduct a group discussion outline. This step's goal is to better explain the scale's

theory, formation, construction, and development. Therefore, this qualitative study conducts group
discussion with a sample size of 10 people including experts staffs of the Management Economic
Zone, Department of Natural Resources and Environment, the Management Boards of the zones,
and representatives of typical production enterprises located in industrial zones and clusters.
Step 2: The next phase is to conduct in-depth interviews with 06 experts in the field of
business - environment after receiving a preliminary scale from expert group talks in order to
continue adjusting and developing the scale to provide the best value content and form for
quantitative research. In this step, interviews are conducted with the survey subjects according to
the interview outline in order to adjust and develop the scales. As a consequence of the in-depth
interview, additional remarks were also recorded, and the scale was adapted to reflect the
circumstances at the production sites. There were no novel insights on the scope of the study's
components found at the conclusion of the in-depth interviews.
3.4 MEASUREMENT SCALE
3.4.1 Relative advantage (LTD)
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After being modified and expanded, the scale for the concept of Relative advantage (LTD),
which was derived from Lin and Ho's (2011) study, now comprises 13 observable variables.
3.4.2 Compatibility (KTT)
After being modified and expanded, the scale for the concept of Compatibility (KTT),
which was derived from Lin and Ho's (2011) study, now comprises 9 observable variables.
3.4.3 Simplicity (SDD)
After being modified and expanded, the scale for the concept of Simplicity (SDD), which
was derived from Lin and Ho's (2011) study, now comprises 7 observable variables.
3.4.4 Organizational support (HTC)
After being modified and expanded, the scale for the concept of Organizational support
(HTC), which was derived from Lin and Ho's (2011) study, now comprises 12 observable
variables.
3.4.5 Quality of human resources (CNL)

After being modified and expanded, the scale for the concept of Quality of human resource
(CNL), which was derived from Lin and Ho's (2011) study, now comprises 11 observable
variables.
3.4.6 Customer pressure (AKH)
After being modified and expanded, the scale for the concept of Customer pressure (AKH),
which was derived from the study of Lin and Ho (2011) and Ehrgott et al., (2011), now comprises
11 observable variables.
3.4.7 Government pressure (ACP)
After being modified and expanded, the scale for the concept of Government pressure
(ACP), which was derived from the study of Lin and Ho (2011), Lopez-Gamero et al., (2010), Liu
(2009), and Zhao et al., (2015), now comprises 11 observable variables.
3.4.8 Government support (HCP)
After being modified and expanded, the scale for the concept of Government support
(HCP), which was derived from the study of Lin and Ho (2011) and Lee (2008), now comprises
10 observable variables.
3.4.9 Environmental uncertainty (DTT)
After being modified and expanded, the scale for the concept of Environmental uncertainty
(DTT), which was derived from the study of Lin and Ho (2011), now comprises 11 observable
variables.
3.4.10 Green product innovation (DSP)
After being modified and expanded, the scale for the concept of Green product innovation
(DSP), which was derived from the study of Chen et al., (2006) and Chen (2008), now comprises
9 observable variables.
3.4.11 Green process innovation (DQT)
After being modified and expanded, the scale for the concept of Green process innovation
(DQT), which was derived from the study of Chen et al., (2006) and Chen (2008), now comprises
11 observable variables.
3.4.12 Environmental performance (SMT)
17

After being modified and expanded, the scale for the concept of Environmental
performance (SMT), which was derived from the study of Zhu and Sarkis (2004), now comprises
16 observable variables.
3.4.13 Financial performance (HQC)
After being modified and expanded, the scale for the concept of Financial performance
(HQC), which was derived from the study of Cooper et al., (1994), Avlonitis et al., (2001) and
Zhu and Sarkis (2004), now comprises 11 observable variables.
3.4.14 Non-financial performance (HQP)
After being modified and expanded, the scale for the concept of Non-financial
performance (HQP), which was derived from the study of Cooper et al., (1994) and Avlonitis et
al., (2001), now comprises 11 observable variables.
3.5 QUANTITATIVE METHODS
3.5.1 Questionnaire
3.5.2 Sample size
3.5.3 Sampling method
Due to the accessibility or convenience-based sampling technique's proximity to the
subject, in locations where the investigator is most likely to encounter the subject, convenience
sampling is the most appropriate method for this study in the context of the complicated
developments of the Covid-19 epidemic in recent years.
Direct survey questionnaires from the directors of manufacturing firms situated in
Vietnam's major industrial zones were used to collect the data for this study. While directors must
have a thorough awareness of the current firms participating in the decision-making process, they
were chosen as the participants for the data collection. After collecting and evaluating the
acceptable returning portable, 400 observations were included in this thesis. The sample size met
the requirements.
3.5.4 Data Analysis Methods
Software SPSS 22.0 and PLS-Smart 3.3.2 are used in this study to process the quantitative
information collected from the official survey. For descriptive statistics, scale reliability analysis,
an exploratory factor analysis of independent and dependent factors, and hypothesis testing, SPSS

software is employed. PLS-Smart software will be used to examine the study model.

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