Financial resource and green business strategy: the mediating role of competitive business strategy

ABSTRACT

Green practices and sustainability are mounting in business organizations around the world. All sized firms have concentrated on environmental and social strategies to benefit the societies that payback in sales and revenue. However, little is known about how Small and Medium Enterprises (SMEs) improve green strategies in emerging markets, especially in Pakistan. To contribute to the existing literature in small businesses, this research tests the influence of financial resources on green business strategy (environmental, social and economic) with a mediating role of competitive business strategy (differentiation and cost leadership). The results of the structural equation modeling based on the data set of 217 Pakistani SMEs indicate that financial resources do not directly influence green business strategy. However, the relationship between financial resources and green business strategy is significantly mediated by competitive business strategy. This research recommends SMEs utilize their financial resources efficiently and economically to practice green activities.

KEYWORDS:

• Financial resources
• competitive strategy
• green business strategy
• RBV
• SMEs

Disclosure statement

No potential conflict of interest was reported by the author(s).