Open for Green New Product Development: A Voluntary Approach to Green Process Innovation

ABSTRACT Prioritizing greenness in new product development (NPD) has been an integral part of manufacturers' strategic choices to achieve sustainable goals. This research aims to unravel the mechanisms through which firms with external search activities can foster green NPD. The data was obtained from 254 manufacturers located in Vietnam. The results revealed the crucial role of external search in promoting green NPD through voluntary green process innovation (GPI) practices. Furthermore, we did not find the role of absorptive capacity in accentuating the link between external search and voluntary GPI, whereas green subsidies negatively moderated this relationship. Thus, the findings provide valuable insights for policymakers and managers interested in promoting and supporting green NPD, as well as raise concerns about the effective utilization of absorptive capacity and green subsidies. This inquiry contributes to the existing green innovation literature by establishing a connection between external search and green NPD, while identifying the mediation and moderation mechanisms that underlie this relationship.