Mediating and Moderating Role of Green Innovation and Environmental Regulation Between Green Knowledge Management and Environmental Performance: Evidence From Ethiopian Industrial Parks

Abstract

Grounded in the resource-based view (RBV), the knowledge-based view (KBV), and the institutional theory (IT), this study examines how green product and process innovations serve as mechanisms linking green knowledge management (GKM) and environmental performance (EP) in an emerging economy context. The study also examined how environmental regulation (ER) serves as a boundary condition. To achieve this objective, the study develops and tests the mediation and moderation model utilizing cross-sectional survey data from 331 managerial-level employees of firms in Ethiopian Industrial Parks. Covariance-based structural equation modeling (CB-SEM) with AMOS was employed to test the relationships. The findings indicate that GKM has a significant direct influence on green product innovation (GPtI), green process innovation (GPcI), and EP. Furthermore, GPcI partially mediates the relationship between GKM and EP, whereas GPtI does not. Finally, ER does not show a significant moderating effect on the relationship between GKM and EP. These findings contribute by refining the mechanisms by which GKM enhances EP through disaggregating GI into product and process dimensions and examining the conditional role of ER within the RBV, KBV, and IT framework. The findings provide context-specific and actionable insights for managers and policymakers, highlighting the stronger role of GPcI relative to GPtI and the complementary benefits of GKM and GPcI in enhancing EP, while indicating a limited role of ER.