Nexus Among Administrative Environmental Innovation and Firm Financial Performance

This paper explores the effect of administrative environmental innovation (AEI) on firm financial performance (FFP) by considering the dynamic capability theory and resource-based view. Specifically, this study tests the linkages between administrative environmental innovation (AEI) and firm financial performance (FFP)by using worldwide data from 685 companies from 42 countries for the period 2004 to 2020. In the final sample, we have 4368 year-annual observations. In this study, AEI is segregated into internal AEI and external AEI. The findings of this study show that Internal AEI and external AEI both enhance FFP under a dynamic capability approach. In this way, this study provides some managerial implications such as the implementation of AEI helps in green innovation strategy that can raise firm profitability in the long run period.