Journal of Business Ethics (2008) 81:531–543
Springer 2007

DOI 10.1007/s10551-007-9522-1

The Driver of Green Innovation

and Green Image – Green Core
Competence Yu-Shan Chen

ABSTRACT. This study proposed a novel construct – environmental pollution. In order to eliminate the
green core competence – to explore its positive effects on problems of environmental pollution, the concepts
green innovation and green images of firms. The results of environmental management, such as green man-
showed that green core competences of firms were pos- agement, green marketing, green production and
itively correlated to their green innovation performance green innovation, etc. are now being pursued. The
and green images. In addition, this research also verified
rise of international environmental regulations, such
two types of green innovation performance had partial
mediation effects between green core competences and
as Montreal Convention, Kyoto Protocol, Restric-
green images of firms. Therefore, investment in the tion of the Use of Certain Hazardous Substances in
development of green core competence was helpful to EEE (RoHS), and Waste Electronics and Electrical
businesses for the enhancement of their green innovation Equipment (WEEE), and popular environmental
and green images. Furthermore, this study found that consciousness of consumers would bring significant
green core competence, two types of green innovation impacts to businesses in the world (Chen et al.,
performance, and green images of medium & small 2006). Therefore, environmental management is
enterprises (SMEs) were all significantly less than those of gathering importance within organizations and it is
large enterprises in the information and electronics increasingly becoming an important part of man-
industry in Taiwan. Therefore, there was the advantage of agement agendas. Under the trends of strict inter-
firm size for the green core competence in this industry, national environmental regulations and popular
and it was imperative for SMEs to develop and create
environmental consciousness of consumers, there
their green core competences to strengthen their green
innovation performance, and green images.
exist many changes and impacts for the rules and
patterns of business competition. Therefore, corpo-
KEY WORDS: green core competence, green innova- rate environmental management will play an
tion, green image, corporate environmental management important role, nowadays (Russo and Fouts, 1997).
However, the issue of the impacts of environmental
protection on core competences of firms was not
paid much attention by academic communities.
Many companies thought corporate environ-
mental management as an unnecessary investment, or
Introduction even were misled that this would obstruct their
development and growth. On the contrary, several
The environmental impact, a consequence of the previous studies thought that pollution was the
ever-increasing industrial activities, since the Indus- concrete evidence of inefficient uses of resources, and
trial Revolution, is a growing global problem in the companies that pioneer in green innovation will
world. Corrective policies in the last several decades enjoy the ‘‘first mover advantage,’’ which allow them
have be implemented to remedy such environmental to ask for a higher price for green products and, at the
damage. In order to protect the world we live in, it same time, improve their corporate images, develop
is necessary to adopt a preventive approach to new markets, and gain competitive advantages
532 Yu-Shan Chen

(Chen et al., 2006; Hart, 1995, 1997; Porter and van analysis were shown in ‘‘Empirical results’’ section.
der Linde, 1995). Companies engaging in environ- In the end, this study mentioned the discussions
mental management and green innovation actively about the findings and implications, and possible
can not only minimize production waste and increase directions for future research in ‘‘Conclusion and
productivity, but also improve the overall produc- Implications’’ section.
tivity, increase corporate reputation, and thereby,
enhance corporate competitiveness under the trends
of popular environmentalism consciousness of con- Literature review and hypothesis
sumers and severe international regulations of envi- development
ronmental protection (Berry and Rondinelli, 1998;
Chen et al., 2006; Porter and van der Linde, 1995; Corporate environmental management
Shrivastava, 1995;). Although Prahalad and Hamel
(1990) proposed the concept of core competence and Previous studies doubted about why firms should
previous scholars had paid great attention to explore respond to environmental regulations (Clarkson,
the relevant issues of core competence, none 1995; Friedman, 1970; McGee, 1998). Similarly, a
explored core competence about green innovation or fundamental debate in the environmental manage-
environmental management. Therefore, this study ment is: should it be corporate social responsibility or
wants to fill the research gap. corporate social responsiveness? However, a signifi-
Facing the trends of strict environmental con- cantly increasing impact affecting the operations of
ventions and popular environmental consciousness companies is the policies of governments with regard
of consumers, companies should not shirk their to the environment protection, and the presence of
duties, because these environmental trends could be both national and international environmental regu-
turned into the momentum that drives them to lations would affect corporate operations (Rugman
enhance their green core competences, and further and Verbeke, 1998a, b). Furthermore, environmental
create their green innovation and green images. consciousness of consumers are more popular now-
This study focused on finding the correct stand- adays, and thereby, companies are enforced to en-
point and evaluation for new concepts of environ- hance their environmental management (Hart, 1997;
mental management in compliance with these Peattie, 1992). Therefore, one of two forces driving
environmental trends to help companies enhance companies to engage in environmental management
their core competences about green innovation or is the international regulations of environmental
environmental management to increase their green protection, such as Montreal Convention and Kyoto
innovation and green images. This has led to the Protocol; the other force driving companies to
need of this research to propose the novel con- engage in environmental management is the envi-
struct, ‘‘green core competence’’, to develop its ronmental consciousness of consumers (Chen et al.,
research framework, and further to employ an 2006). Environmentalism of consumers is increasing
empirical study to verify the research hypotheses, in the world nowadays, and thereby drives enterprises
and explore the managerial implications of green to pay more attention in corporate environmental
core competences of firms. management, because consumers are more willing to
The structure of this study was as follows. A lit- choose green products and even pay relatively high
erature review was discussed in ‘‘Literature review prices for environment-friendly products (Henriques
and hypothesis development’’, and three hypotheses and Sadorsky, 1996). Hence, companies have no
were also proposed in this section. In section choice but to carry out environmental protection
‘‘Methodology and measurement’’, this study activities to comply with international regulations of
described the methodology, the sample and data environmental protection and environmental con-
collection, and the measurements of constructs. sciousness of consumers (Berry and Rondinelli, 1998;
Next, the descriptive statistics, reliability of the Hart, 1995, 1997). Businesses that adopt the proactive
measurement, factor analysis, correlation coefficients strategies of environmental management could inte-
between constructs, and the results of regression grate the goals of environmental protections with
 The Driver of Green Innovation and Green Image 533

different departments in companies to meet the The positive effect of green core competences of firms
environmental regulations and improvements by on green innovation performance
utilizing the innovative environmental management
or technology (Greeno and Robinson, 1992). Prahalad and Hamel (1990) thought a company’s
Therefore, there exists a demand in management competitiveness are derived from its core compe-
fields to anticipate and to plan for environmental tences and core products (the tangible results of core
concerns and to incorporate this thinking into cor- competences), and argued that firms should build
porate strategies. Therefore, an emerging field of and nurture a group of core competences. Core
management is that dealing with the natural envi- competence is the collective learning in the orga-
ronment, as it affects corporate strategy (Rugman and nization, especially the capacity to coordinate diverse
Verbeke, 1998a). production skills and integrate streams of technolo-
Pollution resulted from inefficient uses in gies (Prahalad and Hamel, 1990). Prior studies on
resources, and businesses can increase their pro- ‘‘core competence’’ have deliberated either on the
ductivity through green innovation, to make up theoretical concept of core competence or its use-
with the environmental costs (Chen et al., 2006; fulness as a strategic tool for firms (Srivastava, 2005).
Porter and van der Linde, 1995). Porter and van While traditional approaches to studying competi-
der Linde (1995) argued that companies which are tive advantage are not adequate to explain how firms
the pioneers of green innovation can have the first can operate effectively in turbulent and often chaotic
mover advantage, and thus, they can charge rela- environments, a resource based view focusing on
tively high prices for their green products and development and application of core competences is
further obtain competitive advantages. Moreover, offered to supplement the traditional approaches,
firms investing many efforts in environmental and they can form the basis of competitive advan-
management can not only avoid the trouble of tages (Hafeez et al., 2002; Lei et al., 1996).
protests or punishment about environmental pro- Organizing around core competences requires a
tection, but also enable them to improve their radical change in corporate organization: the first
corporate images, to develop new markets, and to step requires identifying core competences; the next
increase their competitive advantages. In addition, step is to redesign the architecture of the company
the enterprises may embody the concept of green and provide an impetus for learning from alliances
products in the design and package of their and a focus for internal development (Prahalad and
products to increase their differentiation advantages Hamel, 1990). In addition, core competences meet
of their products (Chen et al., 2006; Hart, 1995; three requirements: they provide potential access to
Peattie, 1992; Porter and van der Linde, 1995; a wide variety of markets, make a contribution to
Shrivastava, 1994, 1995). the customer benefits of the product, and are diffi-
Although Prahalad and Hamel (1990) proposed cult for competitors to imitate (Prahalad and Hamel,
the concept of core competence and many previ- 1990). The creation of core competences is impor-
ous studies explored the relevant issues of core tant for company performance and corporate success
competence, no research explored core compe- (Duysters and Hagedoorn, 2000; Goddard, 1997).
tences of firms about green innovation or envi- No research explored core competences of firms
ronmental management. This study wanted to fill about green innovation or environmental manage-
this research gap, and proposed a novel construct, ment. This study wanted to fill this research gap, and
‘‘green core competence,’’ to discuss the relation- proposed a novel construct, ‘‘green core compe-
ships between it and its consequents. The two tence,’’ to discuss the relationships between it and its
consequents of the research framework in this study consequents. This study defined ‘‘green core com-
were green innovation performance and green petence’’ as the collective learning and capabilities
image, while the antecedent is green core compe- about green innovation and environmental man-
tence. This study summarized the literature on agement in an organization.
environmental management and corporate strategy Pollution is the concrete representation of the
into a new managerial framework from the core inefficient uses in resources (Porter and van der
competence view. Linde, 1995). Businesses can increase resource
534 Yu-Shan Chen

productivity through green innovation to make up referred to Chen et al. (2006) to divide green
with the environmental costs (Chen et al., 2006). innovation performance into green product inno-
This study referred to the definition of ‘‘green vation performance and green process innovation
innovation’’ proposed by Chen et al. (2006) and performance. Therefore, this study implied the
defined it as hardware or software innovation that is following hypothesis:
related to green products or processes, including the
innovation in technologies that are involved in Hypothesis 1 Green core competences of firms are
energy-saving, pollution-prevention, waste recy- positively associated with their green innovation
cling, green product designs, or corporate environ- performance.
mental management (Chen et al., 2006). Green Hypothesis 1a Green core competences of firms are
innovation is used to enhance the performance of positively associated with their green product
environmental management in order to satisfy the innovation performance.
requirements of environmental protection (Chen
et al., 2006). Moreover, Chen et al. (2006) divided Hypothesis 1b Green core competences of firms
‘‘green innovation performance’’ into ‘‘green prod- are positively associated with their green process
uct innovation performance’’ and ‘‘green process innovation performance.
innovation performance.’’ This study referred to the
definition of Chen et al. (2006) and defined the
‘‘green product innovation performance,’’ as the The positive effect of green core competences of firms
performance in product innovation that is related to on green images
environmental innovation, including the innovation
in product that are involved in energy-saving, pol- Chan (2000) demonstrated that the source country’s
lution-prevention, waste recycling, no toxicity or green image had a significant positive effect on the
green product designs (Chen et al., 2006). Further- effectiveness of advertising, and reminded marketers
more, this study also referred to the definition of of the importance of green image. Furthermore,
Chen et al. (2006) and defined the ‘‘green process Corrigan (1996) pointed out that Irish export
innovation performance,’’ as the performance in industries had significant growth, since the promot-
process innovation that is related to energy-saving, ing of Ireland as a green European center of quality
pollution-prevention, waste recycling or no toxicity products and services, such that it had advantage of
(Chen et al., 2006). green image. Moreover, Hu and Wall (2005) posited
Talke et al. (2006) developed a competence- that the competitiveness of tourist attractions could
based model for helping explain the occurrence of be enhanced through sound environmental man-
initiatives for innovation, and argued the devel- agement practices. Therefore, environmental man-
opment of competence can stimulate innovation. agement of countries had positive influence upon
On the other hand, Ritter and Gemünden (2003) their green images (Corrigan, 1996; Hu and Wall,
thought companies needed to develop their com- 2005). Similarly, green images are also important for
petences, in order to increase their innovation companies especially under the trends of popular
success, and firms’ competences had a significant environmentalism consciousness of consumers and
positive impact on their innovation success. severe international regulations of environmental
Hence, previous studies posited core competences protection. As mentioned above, companies which
of firms can drive their innovation, and further are the pioneers of green innovation can have the first
enhance their innovation performance (Fairtlough, mover advantage, and thus they can charge relatively
1994; Francois et al., 2002; Ritter and Gemünden, high prices for their green products, and further
2003, 2004; Talke et al., 2006). However, there is obtain competitive advantages. In addition, the
no study exploring the relationship between green enterprises may embody the concept of green prod-
core competence and green innovation perfor- ucts in the design and package of their products to
mance. This study filled this research gap, and increase their differentiation advantages of their
asserted green core competence had a positive products (Chen et al., 2006; Hart, 1995; Peattie,
effect on green innovation performance, and 1992; Porter and van der Linde, 1995; Shrivastava,
 The Driver of Green Innovation and Green Image 535

1994, 1995). On the other hand, firms investing develop new market opportunities and increase
many efforts in environmental management can not competitive advantage (Berry and Rondinelli, 1998;
only avoid the trouble of protests or punishment Henriques and Sadorsky, 1999). In addition, firms
about environmental protection, but also enable that pioneer in some new green products will enjoy
them to improve their corporate images. Therefore, the ‘‘first mover advantages,’’ which allow them to
this study asserted that environmental management of ask for higher prices for green products, to embody
firms had positive influence upon their green images. the concept of green products in the design and
However, no research explored the positive influ- package of their products to increase their differen-
ence of core competences of firms about green tiation advantages of their products, and further to
innovation or environmental management upon improve the corporate images (Chen et al., 2006;
their green images. This study proposed two novel Hart, 1995; Peattie, 1992; Porter and van der Linde,
constructs, green core competence and green image 1995; Shrivastava, 1994, 1995). Therefore, this study
in the business level, to fill this research gap, and asserted that environmental management of firms
posited that green core competences of firms had a had positive influence upon their green images.
positive influence upon their green images. Hence, However, no research explored the positive influ-
this study proposed the following hypothesis: ence of green innovation performance of firms upon
their green images. This study proposed a novel
Hypothesis 2 Green core competences of firms are construct, green images in the business level, to fill
positively associated with their green images. this research gap, and posited that green innovation
performance of firms had a positive influence upon
their green images. In addition, this research referred
The positive effect of green innovation performance on green to Chen et al. (2006) to divide green innovation
images of firms performance into green product innovation perfor-
mance and green process innovation performance.
Chen et al. (2006) defined the ‘‘green innovation Therefore, this study implied the following
performance,’’ as the performance of hardware and hypothesis:
software involved in the innovation that a company
Hypothesis 3 Green innovation performance of
carries out in relations to green products or pro-
firms is positively associated with their green
cesses, including the innovation in technologies that
images.
are involved in energy-saving, pollution-prevention,
waste recycling, green product designs or corporate Hypothesis 3a Green product innovation perfor-
environmental management. As mentioned above, mance of firms is positively associated with their
Chen et al. (2006) divided ‘‘green innovation green images.
performance’’ into ‘‘green product innovation
performance’’ and ‘‘green process innovation per- Hypothesis 3b Green process innovation perfor-
formance.’’ This study referred to the definition mance of firms is positively associated with their
and classification of Chen et al. (2006) for green green images.
innovation performance. Green innovation is used
to enhance the performance of environmental
management, in order to satisfy the requirement The research framework of this study
of environmental protection, and businesses can
increase resource productivity through green inno- This study summarized the literature on environ-
vation to make up with the environmental costs mental management and corporate strategy into a
(Chen et al., 2006). Previous studies thought new managerial framework from the core compe-
adopting proactive strategies in the corporate envi- tence view. Although many previous studies
ronmental management might not only apart from explored the issue of core competence, no research
preventing the company from facing environmen- explored core competences of firms about green
talist protests or penalties, but also help businesses innovation or environmental management. This
536 Yu-Shan Chen

Green Innovation Performance because the information software industry does not
Green Product Innovation
Green Process Innovation
create pollution to the environment.
H1a-H1b The respondents of the questionnaires are the
CEOs or the managers of environmental protection,
Green Core Competence H3a-H3b marketing, or R&D departments in Taiwanese
information and electronics companies. In order to
H2
heighten the valid survey response rate, this research
Green Image
called to each company which is sampled, explain
the objectives of the study and the questionnaire
Figure 1. Research framework. contents, and confirm the names and job titles of the
respondents prior to questionnaire mailing. The
study wanted to fill this research gap, and proposed a respondents were asked to return the completed
novel construct, green core competence. This study questionnaires within 2 weeks through mailing.
explored the positive effects of green core compe- The study refers to the past literatures to design
tences of firms on their green innovation perfor- questionnaire items for the survey. Prior to mailing
mance and green images. The two consequents of to the respondents, six experts and scholars were
the research framework in this study are green asked to modify the questionnaire in the first pretest.
innovation performance and green image, while the Subsequently, the questionnaires were randomly
antecedent is green core competence. Besides, this mailed to 10 CEOs or the managers of environ-
study also wanted to explore, whether green inno- mental protection, marketing, or R&D departments
vation had partial mediation effect between green in different Taiwanese information and electronics
core competences and green images of firms. companies and they were asked to fill in the ques-
Therefore, green innovation was not only a conse- tionnaire and identify the ambiguities in terms,
quent, but also a partial mediator in the research meanings and issues in the second pretest. High
framework. In addition, this study referred to Chen content validity is a necessary requisition for the
et al. (2006) to divide green innovation performance questionnaire in this study. In order to avoid com-
into green product innovation performance and mon method variance (CMV), the respondents of
green process innovation performance. This study different constructs in this study were different. The
proposed three hypotheses, and showed the research respondents of ‘‘green product innovation perfor-
framework in Figure 1. mance’’ and ‘‘green process innovation perfor-
mance’’ are managers of environmental protection
or R&D departments; those of ‘‘green image’’ are
Methodology and measurement managers of marketing departments; those of ‘‘green
core competence’’ are top managers or CEOs in
Data collection and the sample Taiwanese information and electronics companies.
Seven-point Likert-type questions were used in all
The unit of analysis in this study was the business constructs with 1 representing strongly disagree and
level. This research employed an empirical study, 7 representing strongly agree in this study. A total of
which collected data from companies in the infor- 600 questionnaires were sent to CEOs or the man-
mation and electronics industry of Taiwan. The agers of environmental protection, marketing, or
samples were randomly selected from ‘‘2006 Busi- R&D departments. There were 136 valid ques-
ness Directory of Taiwan.’’ The research object of tionnaires, and the effective response rate was 22.7%.
this study was information and electronics compa-
nies in Taiwan, covering the information hardware
industry, the optoelectronic and communication Definitions and measurements of the constructs
industry, the semiconductor industry, and the con-
sumer electronics and electronic component indus- The measurement of the questionnaire items in this
try. However, the research object of this study did study was with ‘‘seven-point Likert scale from 1 to
not include the information software industry, 7’’ rating from strongly disagreement to strongly
 The Driver of Green Innovation and Green Image 537

agreement. The questionnaire comprised five parts. • Green product innovation performance: This study
The first part of the questionnaire consisted of the referred to the definition of Chen et al.
descriptive data of companies (including the number (2006) and defined ‘‘green innovation’’ as
of employees, year founded, industry sector, etc.); the hardware or software innovation that is
second part is the measurement of green core com- related to green products or processes,
petences of firms; the third part is the measurement of including the innovation in technologies that
green product innovation performance; the fourth are involved in energy-saving, pollution-
part is the measurement of green process innovation prevention, waste recycling, green product
performance; and the fifth part is the measurement of designs, or corporate environmental manage-
green image. The definitions and measurements of ment. This study divided the green innova-
the constructs were further defined, as follows. tion into ‘‘green product innovation’’ and
‘‘green process innovation.’’ Chen et al.
• Green core competence: This study referred to (2006) defined the ‘‘green innovation perfor-
the concept of core competence defined by mance,’’ as the performance of hardware and
Prahalad and Hamel (1990), and proposed a software involved in the innovation that a
new novel construct, green core competence. company carries out in relations to green
This study defined green core competence, products or processes, including the innova-
as the collective learning and capabilities tion in technologies that are involved in en-
about green innovation and environmental ergy-saving, pollution-prevention, waste
management in an organization. This study recycling, green product designs or corporate
argued a company’s environmental competi- environmental management. Moreover,
tiveness derived from its green core compe- Chen et al. (2006) divided ‘‘green innovation
tences and green core products (the tangible performance’’ into ‘‘green product innova-
results of green core competences). Besides, tion performance,’’ and ‘‘green process inno-
green core competence proposed in this vation performance.’’ This study referred to
study meets three requirements: it provides the definition of Chen et al. (2006) and
potential access to meet a wide variety of defined ‘‘green product innovation perfor-
environmental needs of markets, makes envi- mance,’’ as the performance in product inno-
ronmental contributions to customer benefits, vation that is related to environmental
and is difficult for competitors to imitate innovation, including the innovation in
(Prahalad and Hamel, 1990). This study product that are involved in energy-saving,
referred to Prahalad and Hamel (1990) to pollution-prevention, waste recycling, no
measure green core competence. The mea- toxicity, or green product designs. The mea-
surement of green core competence included surement of green product innovation per-
five items: (1) the environmental capabilities, formance included four items: (1) The
technologies, or know-how of the firm are company chooses the materials of the product
rare in marketplace; (2) the environmental that produce the least amount of pollution
capabilities, technologies, or know-how of for conducting the product development or
the firm are less imitable by competitors; (3) design; (2) the company chooses the materials
the environmental capabilities, technologies, of the product that consume the least amount
or know-how of the firm are difficult to be of energy and resources for conducting the
substituted; (4) the environmental capabili- product development or design; (3) the com-
ties, technologies, or know-how of the firm pany uses the fewest amount of materials to
provide potential access to meet a wide vari- comprise the product for conducting the
ety of environmental needs of markets; (5) product development or design; (4) the com-
the environmental capabilities, technologies, pany would circumspectly deliberate,
or know-how of the firm make environ- whether the product is easy to recycle, reuse,
mental contributions to customer benefits and decompose for conducting the product
(Prahalad and Hamel, 1990). development or design (Chen et al., 2006).
538 Yu-Shan Chen

• Green process innovation performance: This tion, this study referred to Keller and Aaker
study referred to the definition of Chen et al. (1992) to measure ‘‘green credibility’’ which
(2006) and defined ‘‘green process innovation covered the items ‘‘trustworthiness,’’ ‘‘depend-
performance’’ as the performance in process ability,’’ and ‘‘concern for customers.’’ Hence,
innovation that is related to energy-saving, this study referred to the measurement of the
pollution-prevention, waste recycling, or no corporate image proposed by Martinez and Pina
toxicity (Chen et al., 2006). The measurement (2005) to measure the green image. The mea-
of green process innovation performance surement of the green image includes eight
included four items: (1) the manufacturing items: (1) the company is regarded as the best
process of the company effectively reduces the benchmark of environmental management; (2)
emission of hazardous substances or waste; (2) the company is professional about environmen-
the manufacturing process of the company tal management; (3) the company is successful
recycles waste and emission that allow them to about environmental management; (4) the com-
be treated and re-used; (3) the manufacturing pany is well-established about environmental
process of the company reduces the consump- management; (5) the reputation of the company
tion of water, electricity, coal or oil; (4) the about environmental management is stable; (6)
manufacturing process of the company reduces the company is trustworthy about environmen-
the use of raw materials (Chen et al., 2006). tal management; (7) the company is depend-
able about environmental management; (8) the
• Green image: Previous studies measured the company concerns for customers about environ-
corporate image according to the dimensions of mental management (Keller and Aaker, 1992;
reputation and credibility (Lapierre, 1998; Martinez and Pina, 2005; Weiss et al., 1999).
Martinez and Pina, 2005). Therefore, this study
measured the green image according to the
dimensions of ‘‘green reputation’’ and ‘‘green Empirical results
credibility’’. Referring to Weiss et al. (1999),
this study measured ‘‘green reputation’’ through Table I showed the descriptive statistics of this
the items ‘‘regarded’’, ‘‘professional’’, ‘‘success- study. The Cronbach’s a coefficients of the con-
ful’’, ‘‘well established,’’ and ‘‘stable.’’ In addi- structs were shown in Table II. Generally, the

TABLE I
Descriptive statistics

Constructs Mean Standard Deviation Min. Max.

Green core competence 5.0000 0.9537 2.00 6.80

Green product innovation performance 4.9890 0.8824 2.00 7.00
Green process innovation performance 4.9357 0.8509 2.25 7.00
Green image 4.8346 0.7681 2.38 6.88

TABLE II
The Cronbach’s a coefficients of the constructs

Constructs Number of items Cronbach’s a Remark

Green core competence 5 0.8852 Acceptable

Green product innovation performance 4 0.8537 Acceptable
Green process innovation performance 4 0.8420 Acceptable
Green image 8 0.9071 Acceptable
 The Driver of Green Innovation and Green Image 539

TABLE III
Factor analysis of this study

Constructs Number Number Accumulation percentage

of items of factors of explained variance (%)

Green core competence 5 1 69.254

Green product innovation performance 4 1 69.979
Green process innovation performance 4 1 68.003
Green image 8 1 60.820

minimum requirement of Cronbach’s a coefficient is TABLE IV

0.7 (Hair et al., 1998). It can be observed that the Correlation coefficients between the constructs
Cronbach’s a coefficient of ‘‘green core competence’’
is 0.8852; that of ‘‘green product innovation perfor- (A) (B) (C) (D)
mance’’ is 0.8537; that of ‘‘green process innovation
performance’’ is 0.8420; and that of ‘‘green image’’ is (A) Green core
0.9071. The Cronbach’s a coefficients of all four competence
constructs are more than 0.7. Therefore, the mea- (B) Green product 0.730**
surement of this study was acceptable in reliability. innovation performance
The result of factor analysis in this study was shown in (C) Green process 0.779** 0.723**
Table III. Every construct in this study can be classified innovation performance
(D) Green image 0.785** 0.816** 0.815**
into only one factor. Moreover, the study referred to
the past literatures to design questionnaire items. Before Note: * p < 0.05, ** p < 0.01
mailing to the respondents, six experts and scholars were
asked to modify the questionnaire in the first pretest. firms were positively correlated to the two types of
Subsequently, in the second pretest the questionnaires green innovation performance – green product
were randomly mailed to 10 managers of environ- innovation performance, and green process innova-
mental protection, marketing, or R&D departments of tion performance. Therefore, H1a and H1b were
different companies, and they were asked to fill in the supported in this study. In Model III, the result
questionnaires and identify ambiguities in terms, showed that green core competences, green product
meanings, and issues. Therefore, the measurement of innovation performance, and green process innova-
this study is acceptable in content validity. tion performance of firms were positively correlated
Table IV showed the correlation coefficients to their green images. Therefore, H2, H3a, and H3b
among the constructs. It can be found from were supported in this study. In addition, this
Table IV that green core competences of firms had research also verified the two types of green inno-
significantly positive correlations with green product vation – green product innovation and green process
innovation performance, green process innovation innovation – had partial mediation effects between
performance, and green image respectively, whereas green core competences and green images of firms.
there were significantly positive correlations among This study found that green core competences of
green product innovation performance, green pro- firms had positive effects on their green product
cess innovation performance, and green image. innovation performance, green process innovation
performance, and green images. In other words, the
results showed that the more the investments in the
The results of regression analysis green core competences of firms, the better are their
green product innovation performance, green pro-
The results of the regression analysis in this study cess innovation performance, and green images.
were shown in Table V. In Model I and Model II, Therefore, investment in the green core compe-
the results showed that green core competences of tence, green product innovation performance, and
540 Yu-Shan Chen

green process innovation performance was helpful to

0.212** (3.050)

0.402** (6.381)
0.360** (5.241)
Green image
Model III
businesses. The VIF values of Model I, Model II,

162.941**
and Model III were between 1.000 and 2.992,
which were below 10, so there was no ‘‘multicol-

0.787
0.783
136
linearity’’ in this regression model (Hair et al., 1998).
Green process innovation performance

Difference analysis between large Enterprises and SMEs

According to ‘‘The Criteria to Identify Small, and

Medium-sized Enterprises’’ stipulated by Ministry of
Economic Affairs of Taiwan, this study defined a
Model II

‘‘Medium & Small Enterprise (SME)’’ as that the

number of regular employees of firms in the infor-
0.779** (14.404)

mation and electronics industry does not exceed 200

persons; whereas the number of regular employees of a
207.470**

large enterprise exceeds 200 persons. The total sample

size in the study was 136, including 67 large enterprises,
0.608
0.605
136

and 69 SMEs. This study compared green core com-

Empirical results of regression analysis

petence, green product innovation performance, green

process innovation performance, and green images of
Green product innovation performance

Taiwanese large enterprises with those of Taiwanese

small and medium enterprises (SMEs) in the informa-
TABLE V

tion and electronics industry. As shown in Table VI,

this study showed that green core competence, green
product innovation performance, green process inno-
Model I

vation performance, and green images of SMEs were

all significantly less than those of large enterprises in the
Note: The number in the bracket is t value * p < 0.05, ** p < 0.01
0.730** (12.369)

information and electronics industry in Taiwan.

As mentioned in Table V, green core competences of
152.990**

firms were positively correlated to their green product

innovation performance, green process innovation
0.533
0.530
136

performance, and green images, while green product

innovation performance and green process innovation
performance of firms were positively correlated to their
Green product innovation performance

green images. Hence, there was the advantage of firm

Green process innovation performance

size for the green core competence in the information

and electronics industry of Taiwan. It was imperative
for SMEs in the information and electronics industry
Green innovation performance

of Taiwan to develop and create their green core

competences to strengthen their green product
Green core competence

innovation performance, green process innovation

Independent variables

performance, and green images.

Dependent variable

Adjusted R2

Conclusion and implications

This study summarized the literature on environ-

R2

mental management and corporate strategy into a

F
 The Driver of Green Innovation and Green Image 541

TABLE VI
Difference analysis between large enterprises and SMEs

Mean of large enterprises (E) Mean of SMEs (F) E-F

Green core competence 5.6657 4.3536 1.3121** (11.087)

Green product innovation performance 5.4439 4.5471 0.8968** (6.862)
Green process innovation performance 5.4067 4.4783 0.9284** (7.579)
Green image 5.2369 4.4438 0.7931** ( 7.015)

Note: The measurement of the questionnaire items in this study was with ‘‘seven-point Likert scale from 1 to 7’’ rating
from strongly disagreement to strongly agreement. The sample size of this study was 136, including 67 large enterprises
and 69 SMEs. The number in the bracket is t value. * p < 0.05, ** p < 0.01

new managerial framework from core competence green images. Therefore, investment in the green
view. Although Prahalad and Hamel (1990) pro- core competence, green product innovation per-
posed the concept of core competence and previous formance, and green process innovation perfor-
studies had paid much attention to explore the rel- mance was helpful to businesses. In addition, this
evant issues of core competence, there was no study research also verified green product innovation and
exploring core competence about green innovation green process innovation had partial mediation
or environmental management. Therefore, this effects between green core competences and green
study proposed a novel construct – green core images of firms.
competence and filled the research gap. This study This study found that green core competence,
referred to the classification of green innovation green product innovation performance, green pro-
adopted by Chen et al. (2006) to classify green cess innovation performance, and green images of
innovation into green product innovation and green SMEs were all significantly less than those of large
process innovation to explore the positive effects of enterprises in the information and electronics
green core competence on these two types of green industry in Taiwan. Therefore, it indicated two
innovation and green images of firms. In addition, meanings: first, there was the advantage of firm size
this research also explored, whether green product for the green core competence in the information
innovation and green process innovation had partial and electronics industry of Taiwan; and second, it
mediation effects between green core competences was imperative for SMEs in the information and
and green images of firms. electronics industry of Taiwan to develop and create
The empirical results of this study showed that their green core competences to strengthen their
green core competences of firms had positive effects green product innovation performance, green pro-
on their green product innovation performance, cess innovation performance, and green images.
green process innovation performance, and green The subject of this study covered the issues of
images. In addition, the results showed that the environmental management and core competence,
green product innovation performance and green which respond to the new concept of ‘‘green man-
process innovation performance were positively agement’’ caring both aspects of environmental
correlated to their green images. Therefore, H1a, protection and economy development. Most of
H1b, H2, H3a, and H3b were supported in this Taiwanese companies are SMEs which have few
study. Hence, this research indicated that the more resources to deploy and, thereby, often fail to meet
the investments in green core competences of firms, the requirements and regulations of environmental
the better are their green product innovation per- protection. This would bring Taiwanese SMEs
formance, green process innovation performance, serious damages that resulted from the failure to
and green images, while green product innovation comply with the international conventions and
performance and green process innovation perfor- regulations of environmental protection. However,
mance of firms were positively associated with their this study found that investing many resources and
542 Yu-Shan Chen

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