How customer integration drives green innovation: exploring the influence of regulatory pressures and market changes

Purpose This study aims to (1) validate the effectiveness of customer integration in enhancing firms’ green innovation and (2) explore the respective impacts of regulatory pressure and market changes on the effectiveness of integration mechanisms, thereby identifying the optimal integration outcomes for firms across different contexts. Design/methodology/approach Utilizing an integrated theoretical framework based on the extended resource-based view (ERBV) and contingency theory, this study examines the complex interactions among customer integration, regulatory pressure, market changes and green innovation. The analysis is based on a dataset of 293 responses from manufacturing firms in mainland China. Hierarchical regression analysis was employed to rigorously test the proposed hypotheses. Findings The key outcomes of this research are summarized in two major findings: (1) integrating customers into a firm’s processes meaningfully boosts green innovation initiatives and (2) market dynamics have been found to amplify the positive impact of customer integration on green innovation, whereas regulatory pressure significantly and negatively moderates this relationship. Originality/value This study uniquely integrates multiple theoretical perspectives, providing a richer understanding of how various contextual factors influence the relationship between customer integration and green innovation. These findings contribute original insights to the literature, highlighting how different contextual factors interact with customer integration and offering practical insights for firms to make strategic decisions in diverse contexts.