Handling customer green pressures: The mediating role of process innovation among export-oriented manufacturing industries

Meeting customers' green requirements for manufacturing firms has been a continuing debate but with mixed results. Based on the innovation diffusion theory, this study argues that process innovation can be an important conduit to absorb customers' green pressures to enhance sustainable measures. The empirical results from 680 manufacturers in 10 different countries confirmed the relationship between the customer green pressures and sustainability performance. Initially, manufacturers might find themselves less motivated in investing environmental initiatives due to limited business performance improvements; however, process innovation can fully absorb external pressures and enhance business measures such as growth and market share. Furthermore, as firms engage more in exports, environmental customer pressures intensify and in turn influence process innovation. Export developments led to proactive approach in handling customer green pressures and leading to better sustainable measures, mainly in environmental measures, but not financial performance. The findings highlight the importance of process innovation in sustainability development and offer managerial guidelines for export-oriented industries in aligning customer environmental demands to accommodate resources for development of sustainable strategies.