This study examines the structural mechanism through which environmental pressure influences firm performance via environmental innovation, while investigating the moderating role of government support and firm size differences. Using microdata from t...
This study examines the structural mechanism through which environmental pressure influences firm performance via environmental innovation, while investigating the moderating role of government support and firm size differences. Using microdata from the 2024 Korean Innovation Survey (manufacturing sector), the analysis focuses on 2,674 firms that have introduced at least one eco-beneficial innovation. Partial least squares structural equation modeling (PLS-SEM) was employed, with environmental innovation specified as a second-order construct. In addition, multi-group analysis (PLS-MGA) was conducted to explore firm size heterogeneity. The results indicate that environmental pressure positively affects environmental innovation and firm performance, both directly and indirectly through environmental innovation. Government support shows a significant negative moderating effect on the relationship between environmental pressure and environmental innovation, suggesting a buffering or substitution effect among firms that have already adopted environmental innovations.
Multi-group analysis reveals that large firms exhibit stronger effects of environmental pressure on both environmental innovation and performance than medium-sized firms, whereas small firms show a stronger linkage between environmental pressure and environmental innovation than medium-sized firms. These findings suggest that the performance implications of environmental pressure and policy support vary by firm size and innovation stage, providing important implications for differentiated environmental and innovation policy design.