Encouraging SMEs’ Green Innovation Through Stakeholder Pressure: The Moderating and Mediating Role of Environmental Commitment and Ethics

This study investigates how stakeholder pressures (SSTPR) prompt SMEs to perform green innovation (GRNI) activities by grounding the analysis exclusively in stakeholder theory. It employs a survey questionnaire to gather information from 141 top- and mid-level executives working in various SME manufacturing firms (listed in DSE, CSE, foreign SMEs) in Bangladesh. The structural equation modeling (SEM) technique is used to analyze data and test hypotheses. The study’s findings reveal that SSTPR, both primary and secondary, have a significant positive impact on the firm’s degree of GRNI. Moreover, it has also been found that environmental commitment (ENVC) has a positive moderating effect on the relation between stakeholder influences and GRNI. On the other hand, environmental ethics (ENVE) has a partial mediation impact on this relationship. The results shed light on the crucial role of stakeholder influence, ENVC, and ENVE in promoting GRNI behavior. These findings will fill knowledge gaps on the factors that drive SMEs’ investments in GRNIs with insightful implications for regulators, managers, and policymakers. This study also assists Bangladesh’s sustainable agenda by bolstering green and sustainable innovation activities.