Environmental innovation practices and performance: moderating effect of resource commitment

• The impacts of institution pressures on environmental innovation practices are examined.
• The impacts of command-and-control and economic incentive instrument are examined separately.
• The impacts of overseas and domestic customer pressures are examined separately.
• The relationship between environmental innovation practices and performance is examined.
• The moderating effect of resource commitment on performance is examined.

Based on institutional theory and resource based view, this study seeks to examine linkages among institutional pressures, environmental innovation practices and performance. Specially, we test the moderating effect of resource commitment on the consequences of environmental innovation practices. We collected data from 148 manufacturers in Pearl River Delta, China to test the theoretical model. The statistical results reveal that institutional pressures coming from government's command-and-control instrument, overseas customer pressure and competitive pressure exert significant positive impact on environmental innovation practices, while government's economic incentive instrument and domestic customer pressure do not work. We also find environmental innovation practices have significant positive impact on firms' environmental performance, while the effect on financial performance should be through the mediating role of environmental performance. The further analysis reveals that the relationship between environmental innovation practices and financial performance is moderated by the level of resource commitment. As resource commitment increases, the financial performance yielded from environmental innovation practices will be better.