From Eco‐Policy to Green Practice: Government Eco‐Initiatives, Managerial Attention and Frugal Green Innovation in Saudi Arabia

ABSTRACT Considering the need for environmental sustainability and fulfillment of the needs of customers at the bottom of the pyramid, this study integrates the attention‐based view of organizations and situational leadership theory to examine the impact of government eco‐initiatives on frugal green innovation through managerial attention toward the environment in the presence of transformational leadership. Using a multisource (leader–subordinate) and time‐lagged research design, data were collected from 229 large manufacturing firms located in major industrial centers of Saudi Arabia, including Riyadh, Makkah, Jeddah, and Jubail. The study's hypotheses were tested using partial least squares‐structural equation modeling (PLS‐SEM). The empirical findings confirm the mediating role of managerial attention toward the environment in the relationship of government eco‐initiatives with frugal green innovation. Nevertheless, they do not support the moderating effect of transformational leadership on the “managerial attention toward the environment–frugal green innovation” relationship. In addition, transformational leadership does not influence the mediating role of managerial attention toward the environment on the “government eco‐initiatives–frugal green innovation” relationship. This study enriches the scant frugal green innovation literature. The authors also elaborate on the current empirical evidence in theory, research, and practice related to managerial attention and frugal innovation.