Exploring the Curvilinear Relationship between Green Innovation Complexity and Performance: The Moderating Role of Governance Mechanisms

Green innovation has been adopted widely by companies as a strategic tool to deal with the increasing pressure of environmental concerns as well as sustainability. Extra resources are required to reduce the uncertainties and risks involved in green innovation to improve innovation performance. Building on information-processing perspective and contingency theory, this study examines the impact of green innovation complexity on performance and how proper governance mechanisms can properly align with the complexity to improve innovation capability. Using survey data from 231 companies in China, we find the relationship between green innovation complexity and performance to be curvilinear in nature. More importantly, administrative governance mechanism does a better job in improving innovation performance for green innovation with low-level complexity. Relational governance mechanism performs well for innovation tasks with high-level complexity. Managerial implications are drawn from our study for practitioners regarding how to align proper governance mechanisms to deal with innovation tasks with different-level complexity so as to improve innovation performance.