How Environmental Leadership Influences Performance Outcomes: A Study of the Manufacturing Sector

ABSTRACT Drawing on the ability‐motivation‐opportunity (AMO) theory and the resource‐based view (RBV), this study argues that environmental transformational leadership (ETL) enhances both economic and environmental performance through green human resource management (GHRM). It also examines the moderating role of environmental knowledge in the relationship between ETL and GHRM. Furthermore, this study posits that big data analytical capabilities (BDAC) strengthen the impact of GHRM on economic and environmental performance. Using a random sampling approach, we collected multi‐respondent data from 355 manufacturing firms, incorporating insights from first‐level managers and top executives. Structural equation modeling was employed as our analytical technique. The findings confirm that GHRM significantly mediates the effect of ETL on both economic and environmental performance. However, contrary to expectations, environmental knowledge does not moderate the ETL–GHRM relationship. In contrast, BDAC strengthens the influence of GHRM on economic and environmental performance. This study contributes to the leadership literature by identifying the underlying mechanism (how) and boundary conditions (when) through which ETL influences firms' performance outcomes.