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Barriers to green innovation initiatives among manufacturers: the Malaysian

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Barriers to green innovation initiatives
among manufacturers: the Malaysian case
Mirza Abdullah, Suhaiza Zailani,

Mohammad Iranmanesh &
K. Jayaraman
Review of Managerial Science
ISSN 1863-6683
Rev Manag Sci

DOI 10.1007/s11846-015-0173-9
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Rev Manag Sci
DOI 10.1007/s11846-015-0173-9
ORIGINAL PAPER
Barriers to green innovation initiatives

among manufacturers: the Malaysian case
Mirza Abdullah1 • Suhaiza Zailani2 •

Mohammad Iranmanesh2 • K. Jayaraman3
Received: 3 October 2014 / Accepted: 4 May 2015

! Springer-Verlag Berlin Heidelberg 2015
Abstract This study investigated the internal and external barriers to green in-
novation initiatives among Malaysian manufacturers. Data was gathered through a
survey of 153 manufacturing companies in Malaysia. Data was analyzed using the
partial least squares technique. Results indicated that the barriers to green products,
processes, and systems innovations are different. Issues of environmental resources,
attitude and perception, business practices, government support, and customer de-
mand were found to be the barriers to green product innovations, whereas attitude
and perception, business practices, poor external partnerships, insufficient infor-
mation, lack of customer demand, and environmental commercial benefits were
determined to be the factors that negatively affect green process innovations. As
regards green system innovation, environmental resources, attitude and perception,
business practices, technical barriers, government support, and environmental and
commercial benefits presented themselves as the internal and external barriers that
need to be addressed. The results have important implications for managers of
manufacturers that have plans of promoting green products, processes, and system
innovations.
& Mohammad Iranmanesh

iranmanesh.mohammad@gmail.com
Suhaiza Zailani
shmz@um.edu.my
K. Jayaraman
dr_kjraman@usm.my
1
School of Management, University Sains Malaysia (USM), 11800 Penang, Malaysia
2
Faculty of Business and Accountancy, University of Malaya (UM), 50603 Kuala Lumpur,
Malaysia
3
Graduate School of Business, Universiti Sains Malaysia (USM), 11800 Penang, Malaysia
123
M. Abdullah et al.
Keywords Barriers ! Green innovation ! Manufacturers ! Malaysia
Mathematics Subject Classification 62G08
1 Introduction
In recent years, the importance of the environmental agenda for the industry has
been rising exponentially at the international level. Additionally, increasing
consumers’ awareness on the environmental impact of their consumption choices
and their willingness to reduce their ecological footprint (Harrison et al. 2005) has
created new market opportunities for manufacturers. Furthermore, increasingly
restrictive policies punishing environmentally harmful behaviors and the action of
NGOs, which has directed and increased attention toward manufacturers’ polluting
activities (Porter and van der Linde 1995), have encouraged manufacturers to
control the effects of their activities on the environment to reduce reputation risks
and avoid additional costs. Thus, green innovation has become one of the more
important strategic tools used to obtain sustainable development in manufacturing
industries in response to the increasing environmental pressure.
Despite the importance and benefits of green innovation, manufacturers’
involvement in green innovation remains below expectations. Certain manufacturers
are deterred from engaging innovation because of the difficulties involved and
remain locked into established routines. Other firms actually attempt to innovate and
invest in green innovation, but they may fail to bring new green products or
processes to the market because they are unable to overcome these barriers.
Successful green innovation depends on a firm’s ability to overcome these green
innovation barriers. However, Malaysian manufacturing companies’ low awareness
of green innovation barriers prevents them from achieving the benefits of green
innovation (Pawanchik and Sulaiman 2010). Therefore, investigating the potential
barriers to green innovation in Malaysia is important because limited discussion is
related to this specific context in the literature at present. In addition, the Malaysian
manufacturing industry is still in its developing stages and has significant negative
environmental impacts. Hence, the barriers to green innovation should be pursued
aggressively to accommodate the current environmental situation.
Distinguishing barriers to green innovation among manufacturers is important for
two reasons. First, a distinction is crucial from an innovation policy perspective for
policy makers to be able to design appropriate policies that address systemic failures
preventing firms from engaging in green innovation activities; they need to identify
why firms are excluded from the innovation contest (Woolthuis et al. 2005;
Chaminade and Edquist 2006). Second, from the perspective of innovation
management, identifying the barriers commonly faced by firms engaging in green
innovation activities is important, especially those that result in failure to introduce
new green products or processes in the market. Such identification should provide
crucial insights for managers to inform corporate strategies to overcome obstacles to
green innovation (D’Este et al. 2008).
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Barriers to green innovation initiatives among…
Green innovation can be classified into three main categories: green product
innovation, green process innovation, and green system or managerial innovation
(Chen et al. 2006; Chen 2008). Potential barriers to green innovation can differ
among different types of innovations. In other words, certain barriers might deter
firms from green product innovation, whereas others might deter them from green
process innovation. The present study addresses this research question: what are the
barriers (internal and external) of each type of green innovation among manufac-
turers in Malaysia that have not been discussed in the literature? The results are
expected to provide primary guidelines for managers of manufacturers and
policymakers in addressing barriers to green innovation initiatives. The adoption
of green innovation may increase among manufacturers by addressing these barriers.
The rest of the paper is organized as follows: Sect. 2 introduces green innovation
initiatives, barriers to innovation initiatives, and barriers to green supply chain
management (GSCM) initiatives. Furthermore, the section develops the conceptual
model. In Sect. 3, hypotheses are developed. Section 4 presents the research
methods including data collection, sample, measure of constructs, and analysis
method. Section 5 presents the results. Section 6 includes the discussions. The
managerial and policy implications of the study are presented in Sect. 7, followed
by the limitations and recommendations to future studies in Sect. 8.
2 Literature review and model conceptualization
2.1 Green innovation initiatives
Green innovation is the exploitation, production, or assimilation of a service,

production process, product, or management and system methods novel to the
organization adopting or developing them (Kemp and Pearson 2008). Pollution,
environmental risks, and other negative effects on resource use (including energy
use) throughout its life cycle are significantly reduced by green innovation.
Similarly, Wong (2013) suggest that the decreased environmental impact of firms is
facilitated by green innovation, thereby enabling firms to integrate environmental
benefits and meet eco-targets. Although the importance of green innovation has
been discussed extensively (e.g., Zailani et al. 2014; Wong 2013), limited
understanding on green innovation barriers can be gleaned from the literature.
Green product innovation, green process innovation and green management or
system innovation comprise the three main categories into which green innovation
is classified (Chen et al. 2006; Chen 2008; Madrid-Guijarro et al. 2009). Green
product innovation was identified by Chen et al. (2006) as introducing significantly
improved or new products because of environmental concerns (e.g., green design,
non-toxic raw materials, pollution prevention, energy savings, waste minimization,
and waste recycling). Green process innovation refers to producing environmentally
friendly products that meet eco-targets by modifying manufacturing processes and
systems. Such modification includes waste recycling, energy savings, and pollution
prevention (Meeus and Edquist 2006; Kammerer 2009). Green system innovation
refers to the process of identifying, implementing, and monitoring pioneering ideas
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M. Abdullah et al.
that strengthen green environmental performance of a company, enhancing

competitiveness in the process.
Green product, process, and system innovations are different in nature (Chen
et al. 2006; Kammerer 2009). In green product innovation, the degree of a new
green product’s competitiveness should be evaluated by the research and
development unit. Consumer needs must also be well understood (Tseng et al.
2013). Moreover, the feasibility of green products, in terms of commercial,
economic, technical aspects should be evaluated. The creation of knowledge
(R&D), the creativity and skills of employees, systems for either explicit or tacit
technological protection, learning curves, and the practical criticism of routines
must be fostered by manufacturers to enhance green process innovation (Athaide
et al. 1996; Rao and Holt 2005; Chen et al. 2006). Manufacturers must be able to
evaluate and install an environmental management system and ISO 14000 series;
consume less gas, water, petrol, and electricity; provide environmental awareness
seminars and training for stakeholders; and strictly control hazardous waste and
emissions to enhance green system innovation (Zhu et al. 2010). As the aspects and
criteria of each green innovation are different, we expect the barriers to practicing
them, which are not investigated in the previous studies, to be different.
2.2 Barriers to innovation initiatives
Barriers can be considered internal and external. Issues outside the organization
comprise external barriers, whereas issues within the organization that will hinder a
company from achieving its innovation initiatives are known as internal barriers
(Walker et al. 2008). Although studies on the barriers to green innovation are
lacking in the literature, many studies are conducted on the barriers to general
innovation (e.g., Madrid-Guijarro et al. 2009; Hölzl and Janger 2014) and on the
barriers to GSCM initiatives (e.g., Wooi and Zailani 2010; Zailani et al. 2011;
Govindan et al. 2014), which can be used as the groundwork.
Innovation barriers are issues that prevent or hamper the firm’s innovative
activities (Sandberg and Aarikka-Stenroos 2014). Savignac (2008), using data on
French manufacturing firms based on the Community Innovation Survey (CIS)
methodology, shows that financial constraints significantly hinder a firm’s
likelihood to implement innovative projects. Tiwari et al. (2007), based on the
Dutch CIS, find a strong and significant deterrent effect of perceived financial
obstacles on the R&D investment.
The involvement of many actors with difficult-to-reconcile stakes and a
multiplicity of interactions characterize innovation processes (Afuah and Bahram
1995; Hadjimanolis 2003). Potential barriers may arise from such a situation. For
example, the so-called TCOS model is a framework addressing radical, controversial
innovation, indicates that technological, commercial, organizational, and social
uncertainties are barriers to be overcome for successful innovation (Hall and Martin
2005; Hall et al. 2011). The TCOS model evaluates innovation under social
uncertainties, that is, innovation that addresses stakeholder concerns that are
conflicting and difficult-to-reconcile (Afuah and Bahram 1995; Hall and Martin 2005).
123
In terms of innovation under social uncertainty, the effect of the external

environment is particularly critical. Such a situation entails potentially controversial
effects for third parties (Hall and Martin 2005; Hall and Vredenburg 2012). To
analyze social uncertainties, stakeholder theory (Freeman, 2004; Mainardes et al.
2011) was used. Considering that stakeholders affect innovation, this theory
structures the identification of external innovation barriers related to external
stakeholders (Nambisan 2002).
A more comprehensive understanding of increasingly complex environments is
facilitated by stakeholder theory (Waxenberger and Spence 2003) by identifying
actors with the opportunity, willingness, and capacity to benefit or threaten the
organization (Savage et al. 1991). Stakeholders are affected by the firm or have the
potential to affect it (Fassin 2009), and are considered ‘‘key actors’’ (Post et al.
2002).
The innovation value-added chain indicates that the key stakeholders who are
affected by an innovation or can affect an innovation are suppliers, customers, and
complementary innovators (i.e., competitors; Afuah and Bahram 1995). Empirical
studies have confirmed the existence of innovation barriers along the innovation
value-added chain such as deficient technical support from vendors (e.g., Baldwin
and Lin 2002), limited supply (Carlsen and Edwards 2008), competitive pressure
(Özgen and Ölçer 2007), and lacking customer responsiveness (Galia and Legros
2004; Tourigny and Le 2004).
In addition, if innovation goals are not aligned with organizational strategy, then
the innovation competes with different priorities. Organizational strategy shapes
organizational structure (Wolf and Egelhoff 2001), and conversely, the strategy
used by an organization influenced by the existing structure (Pertusa-Ortega et al.
2010). Innovation barriers at the organizational level can be created by both
strategic and structural issues (e.g., Galia and Legros 2004; Kim et al. 2005; Ren
2009; Tourigny and Le 2004).
The ability to recognize value and incorporate new information are required to
develop an organization’s innovative capabilities. This absorptive capacity (Cohen
and Levinthal 1990) relates to innovation barriers in terms of a lack of
organizational learning, including organizational culture and inappropriate training
within the organization (e.g., Baldwin and Lin 2002). Several studies have identified
innovation barriers related to organizational culture (e.g., Anumba et al. 2006;
Storey 2000; Vermeulen 2004; Zerjav and Javernick-Will 2009).
Hölzl and Janger (2014) studied 18 European countries and categorized
innovation barriers into the following: (1) financial barriers to innovation (lack of
finance from sources outside your enterprise), (2) skill barriers to innovation (lack of
qualified personnel), (3) lack of information on technology, (4) lack of information
on markets, and (5) lack of innovation partners (difficulty in finding cooperation
partners for innovation). In another study, Plotnikova et al. (2015) grouped the
innovation barriers as follows: (1) infrastructural, (2) connected with the form of
innovation activity support, (3) in the sphere of education and management, (4)
determined by actions of the state, and (5) informational.
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M. Abdullah et al.
2.3 Barriers to GSCM initiatives
Literature survey has emphasized various kinds of barriers that hinder an

organization from adopting GSCM initiatives. Giunipero et al. (2012) found (1)
lack of consensus at the CEO level, (2) costs of sustainability and economic
conditions, (3) lack of sustainability standards and appropriate regulations, and (4)
misalignment of short term and long term strategic goals as the barriers to GSCM
initiatives. Wooi and Zailani (2010) investigated the barriers that hinder the firms in
Malaysia from implementing GSCM and found that resources is the key barrier that
impedes the adoption of GSCM initiative, whereas the technical barrier is expected
to be the key barrier for the firms in Malaysian manufacturing sectors. In another
study, Muduli et al. (2013) categorized the barriers to GSCM initiatives as follows:
(1) information gap (lack of management awareness regarding cost savings from the
implementation of GSCM, lack of management awareness about new technologies,
lack of employee awareness about occupational health hazards, and inadequate
exchange of information among departments involved), (2) society (lack of
community pressure, resistance by employees to the adoption of modern
technology, absence of green consumer awareness, lack of employee motivation),
(3) poor legislation (lack of enforcement, lack of strict supervision, corruption, and
changing regulations from changing political climate), and (4) capacity constraints
(financial constraints, technical constraints, productivity or operational constraints,
lack of expertise or human resources, and lack of infrastructure for the sustainability
of waste management or disposal methods). Jayant and Azhar (2014) studied the
barriers to implementing GSCM practices and found 20 barriers to GSCM
initiatives, namely, cost implication, lack of IT implications, poor organized culture
in adopting GSCM, lack of top management commitment in adopting GSCM,
resistance to advance technology adoption, lack of government support to adopt
GSCM, lack of knowledge about green practice, lack of technical expertise, market
competition, less awareness of customer about GSCM, lack of environmental
awareness to the supplier, fear of failure, pollution in industries, non-availability of
bank loans to encourage green product, lack of training courses about implementing
GSCM, lack of recycling and reuse efforts of organization, lack of sustainability
certification (ISO 14001), cost of disposal and hazardous products, lack of
awareness about reverse logistics adoption, and lack of corporate social responsi-
bility. Pellegrino and Savona (2013) categorized the barriers to innovation into cost
factors, knowledge factors, market factors, and regulation factors.
2.4 Model conceptualization
The recognized internal barriers to innovation and GSCM initiatives were grouped
into seven categories: (1) attitude and perception barriers (employee resistance to
change and managers resistance to change), (2) information-related barriers (lack of
awareness and relevant information on market and technology and uncertainty about
environmental regulations), (3) technical barriers (poor R&D), (4) lack of financial
resources, (5) process-related barriers (high innovation cost, very high risks, and
difficulty in controlling the innovation cost), (6) environmental resources barriers
123
(lack of skilled personnel, turnover of qualified employees, lack of internal

employee training, insufficient capacity in time), and (7) business practice barriers
(conflicts with functional requirements and no long term strategy). The recognized
potential external barriers were grouped into six categories: (1) poor external
partnership, (2) insufficient information (insufficient market information, insuffi-
cient technological information), (3) lack of government support, (4) lack of
customer demand, (5) lack of external fund, and (6) environmental commercial
benefits (economic turbulence, easy to copy, commercial disadvantage, and no
alternative available).
Determining whether the recognized barriers in previous studies on general
innovation or GSCM initiatives will be suitable to reflect the barriers to green
innovation initiatives in Malaysia is important because the aim of this study is to
determine the barriers to green innovation among manufacturing companies in the
country. Therefore, in depth interviews were conducted in five organizations in
Malaysia (interview methodology details are discussed in the methodology section).
The analysis of the interviews shows that the most prominent internal barriers are
business practices, environmental resources, attitude and perception, information-
related barriers, and technical-related barriers. The information-related internal
barriers will be omitted here and have been taken as an item under external barriers
because they are almost the same and are interrelated with the external barriers. In
addition, the analysis shows that government support, information-related types,
partnership, environmental commercial benefits, and customer demand are the most
prominent types of green innovation initiatives in Malaysia. Therefore, in the present
study, the four prominent internal barriers (business practices, environmental
resources, attitude and perception, and technical barriers) and five prominent external
barriers (government support, information-related barriers, partnership, environ-
mental commercial benefits, and customer demand) were considered potential
internal and external barriers to green innovation initiatives in the model (Fig. 1).
3 Hypothesis development
3.1 Environmental resources barriers
Experts in environmental management are important in building sustainable

organizations. The analysis of past literature shows that the organizations with a
lack of skilled personnel in the area of environmental management will put less
effort into innovation initiatives (Silva and Leitão 2007) because of poor knowledge
and experience. In addition to this finding, trained employees do not stay long in an
organization to help build green management. The focus on short-term tasks and
priorities by organizations will lead to low emphasis on long-term innovation
initiatives (Ylinenpaa 1998), which will further hinder the adoption of green
innovation because related tasks will cause a burden for the employees and will lead
to a lower success rate. The lack of qualified staff can be a serious constraint to the
development of the innovation initiatives in an organization (Hoffman et al. 1998).
Therefore, the following hypothesis is developed:
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M. Abdullah et al.
Internal Barriers
-Environmental
Resources
-Attitudinal and
Perception
-Business Practices Green Innovation
Initiatives
-Technical -Product Innovation
-Process Innovation
External Barriers -System Innovation
-Poor External
Partnership
-Insufficient Information
-Lack of Government
Support
-Lack of Customer
Demand
-Environmental
Commercial Benefit
Fig. 1 Research framework
H1: Environmental resource barriers have a negative effect on the adoption of

(a) green products, (b) green process, and (c) green system innovation initiatives in
Malaysian manufacturing companies.
3.2 Attitude and perception barriers
People tend to choose the false boundaries and limitations created by the past and
are reluctant to attempt new challenges because of their previous experience.
Therefore, progress is impossible without this change in mindset, and those who
cannot change their minds cannot change anything. Organizational culture is
responsible in building the attitude and perception of employees in companies. In
small and medium industries, firms’ resistance to adopt innovation can obviously be
a direct indicator that the organizational culture failed in supporting the innovation
initiatives (McAdam et al. 2004). Employees in organizations resist change because
of internal factors, such as insufficient communication, existing poor corporate
norms and culture, poor human resource practices, and lack of support and
commitment from top management teams (Zwick 2002). Small organizations do not
perceive environmental related innovation as part of their responsibility and believe
that it cannot help to improve their business or competitive advantage in the market
(van Hemel and Cramer 2002). Therefore, the following hypothesis is developed:
123
H2: Attitude and perception barriers have a negative effect on the adoption of
(a) green product, (b) green process, and (c) green system innovation initiatives in
Malaysian manufacturing companies.
3.3 Business practices barriers
As mentioned by Ōno (1988), the track record for organizations to implement

various initiatives or strategies such as ISO, SCM, JIT, Lean, and Six Sigma in an
event to control and improve the key performance indicators (financial and
operational outcomes) of the company can help in gaining core competencies
besides being competitive in the market. Senge (2006) also mentioned that
organizations with a good track record of implementing the above-mentioned
strategies will help organizations to become learning organizations. Liebowitz and
Beckman (1998) mentioned that the next generation of corporations will integrate
core competencies and expertise with organizational learning, new organizational
structures, compensational schemes, and innovative information technologies to
create long-term sustainable competitive advantages. Additionally, the implemen-
tation of any new initiatives will be easier in this type of organization because it has
better chances and abilities to focus attention, effort, and energy in implementing
innovative activities, which are related to advancing environmentally conscious
manufacturing (ECM) practices, rather than in companies that do not have any
experience in various business practices (Florida et al., 2001). Therefore, the
following hypothesis is developed to further analyze the condition:
H3: Business practices barriers have a negative effect on the adoption of (a) green
product, (b) green process, and (c) green system innovation initiatives in Malaysian
manufacturing companies.
3.4 Technical barriers
Lack of technical information and knowledge will lead to difficulties in finding

alternative solutions in designing new technologies, materials, operations, and
industrial processes related to green innovation initiatives (van Hemel and Cramer
2002; Ylinenpaa 1998). Lack of technical expertise and knowledge is also
considered to be a major barrier in the preview study conducted by the researchers
(Silva et al. 2008; Perron 2005). In a study conducted in Malaysia, innovation in the
country was discovered still to be at its infancy compared to other countries
(Pawanchik and Sulaiman 2010). Revell and Rutherfoord (2003) reported that the
lack of technical knowledge and expertise has been found to have a negative
relationship toward the green innovation initiatives of an organization, which has
been supported by the findings by Lai et al. (2003) mentioning that if an
organization has more capabilities in R&D and innovation compared to their
competitors, then they will embark on innovative activities. Innovation will also
help organizations to gain the first-mover benefits, which in turn increases their
market share and revenue (Lai et al. 2003). Therefore, the following hypothesis is
developed to further analyze the condition:
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M. Abdullah et al.
H4: Technical barriers have a negative effect on the adoption of (a) green product,
(b) green process, and (c) green system innovation initiatives in Malaysian
3.5 Poor external partnership
Building external partners is important to support the green innovation initiatives

that an organization is embarking. Ylinenpaa (1998) mentioned that finding partners
or suppliers to cooperate with and work together on the green innovation initiatives
is difficult among small firms in Sweden. Organizations have difficulties in finding
good external partnerships because suppliers are not ready to invest in redesigning
the current product into a green product (Hadjimanolis 1999). The low participation
of suppliers can be attributed to the unknown demand, higher cost for material
production to meet green specifications, and the expensive cost of redesigning
(Porter and van der Linde 1995; Chen et al. 2006). Finding an external partner who
wants to invest in developing green innovation material or technologies is very
difficult (Hadjimanolis 1999). Therefore, the following hypothesis is developed to
further analyze the condition.
H5: Poor external partnerships have a negative effect on the adoption of (a) green
3.6 Insufficient information
Weak external market and technological information will have a negative effect on
green innovation (Woolman and Veshagh 2006). Madrid-Guijarra et al. (2009)
mentioned that the insufficient availability of market and technological information
on environmentally friendly products and processes will prevent firms from
proceeding to the next level of product or process innovations because they feel very
uncertain about their product and its demand in the market. Therefore, the following
hypothesis is developed to further analyze the condition:
H6: Insufficient information has a negative effect on the adoption of (a) green
3.7 Lack of government support
The government does not support green innovation initiatives in Malaysia by

providing grants, loans, or subsidies to encourage organizations to go green by
adopting initiatives. Piatier (1984) and Runhaar et al. (2008) discovered that a lack
of government support can be a de-motivating factor for organizations to embark on
innovation initiatives. A study conducted by Demirbas (2010) on Turkish SMEs
suggests that the lack of government R&D and technology policy as a formal barrier
to innovation has a significant effect on the entrepreneur’s propensity for
innovation. Poor support by governments is practically due to a lack of knowledge
123
on green production or environmental leadership (Runhaar et al. 2008) and lack of

expertise that would enable them to share green knowledge. Therefore, the
following hypothesis is developed to further analyze the condition.
H7: Lack of government support has a negative effect on the adoption of (a) green
3.8 Lack of customer demand
The willingness of the customer to pay more for green products will secure the
future demand of green products of an organization. Moreover, the lack of
significant benefits that the green product brings to the company will hinder
manufacturers from engaging green innovation efforts. The lack of customers’
responsiveness to new products will show organizations that have fewer propen-
sities to innovate (Silva and Leitão 2007). Organizations believe that if the market
does not accept their new products, then they have no incentive to take on
innovation initiatives because of time, cost, and resource constraints. Therefore, the
following hypothesis is developed to further analyze the condition:
H8: Lack of customer demand has a negative effect on the adoption of (a) green
3.9 Environmental commercial benefit
If an organization does not have knowledge and expertise on green innovation, then
it will not embark on green innovation initiatives. When an organization perceives
no clear environmental commercial benefits gained from green innovation
initiatives (van Hemel and Cramer 2002), efforts to go green will fail. When
organizations already perceive that green innovation does not bring them any
benefits, green innovation initiatives will be further reduced in firms (Woolman and
Veshagh 2006). Therefore, the following hypothesis is developed to further analyze
the condition:
H9: Lack of environmental commercial benefits has a negative effect on the
adoption of (a) green product, (b) green process, and (c) green system innovation
initiatives in Malaysian manufacturing companies.
4 Research methodology
Data collection consisted of two separate phases. Initially, semi-structured

interviews were conducted with the managers of five manufacturing companies to
find out whether the identified variables in the literature will be suitable to reflect the
situation of manufacturing-based organizations in Malaysia. Next, a survey
questionnaire was used to gather data for statistical hypothesis testing. In the
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M. Abdullah et al.
following subsections, we discuss the data collection, measure of constructs, and

analysis method.
4.1 Data collection and the sample
The sampling frame of this study consists of manufacturing companies in Malaysia

at a business level that comprises five different sectors, namely, food and beverage
products, rubber and plastics, chemical products, electrical and electronics, and
fabricated and basic metals. These five industries were chosen because they have
recorded the fastest growth rate in terms of the growth of their industry by sub-
sectors (FMM 2012). In addition, the manufacturing companies in Malaysia were
chosen for the sample because they will be highly involved in embarking on green
innovation compared to other companies. The sampling list was obtained from the
Federation of Malaysian Manufacturers (FMM). The respondents comprised
manufacturing companies operating in Malaysia, which are mainly large companies
or multinational corporations. The data shows approximately 1500 large-scale
industries listed in the FMM directory. The survey questionnaires were mailed to
500 members of the potential sample.
This study targeted CEOs, general managers, managing directors, directors,
managers or persons-in-charge of environmental health and safety departments,
environmental protection departments, production and operations departments, new
product introduction departments, procurement or material departments, marketing
departments, and R&D departments in Malaysian manufacturing companies. These
people were chosen because they have first-hand knowledge and information
regarding the green issues, green innovation initiatives, and continuous green
progress in environmental performance of the manufacturing companies. The
survey was conducted using a structured mail questionnaire directed to the
corresponding respondents in each firm. Out of a total of 500 distributed
questionnaires, 153 usable responses were received, resulting in an effective
response rate of 30.7 % (153/500). The sample was estimated to be effective at the
95 % confidence level with a margin of error of ±7.5 %.
In measuring the power of the 153 samples, G*Power version 3.1.9.2 was used
(Faul et al. 2009). Using G*Power with an effect size of 0.15 and statistical
significance (a level) of 0.05 yielded a power of 0.928, which is above 0.80 and
signifies a satisfactory degree of the power of the sample in the present study (Chin
2001). These results show that the proposed sample size of the present study
indicates the requisite power to reject the null hypotheses of the study (Faul et al.
2009).
In ensuring that the received responses are representative of the sample firms, a
non-response bias was conducted following the procedure suggested by Armstrong
and Overton (1977). The last quarter of responses received were assumed to be very
similar to non-respondents because their replies took the longest time and the most
effort to obtain. Therefore, the last quartile was compared to the first three quartiles.
At the 5 % significance level, no differences between the ‘‘early’’ and ‘‘late’’
respondents were detected, suggesting that non-response bias was not a problem
with regard to the data collected in this study.
123
4.2 Measure of constructs
The questionnaire is divided into five sections: company’s basic information,

internal barriers (environmental resources, attitude and perception, business
practices, and technical barriers), external barriers (poor external partnership,
insufficient information, lack of government support, lack of customer demand, and
environmental commercial benefit), green innovation initiatives (product innova-
tion, process innovation, and system innovation), and respondent’s personal
information. The items were measured using a five-point Likert scale anchored
by ‘‘strongly disagree’’ and ‘‘strongly agree’’ for the internal and external barriers
and by ‘‘not at all’’ and ‘‘very high’’ for green innovation items. In ensuring content
validity, the items were adopted from previous studies as follows: environmental
resources (Woolman and Veshagh 2006; van Hemel and Cramer 2002), attitude and
perception (Madrid-Guijarro et al. 2009), business practices (Chen 2008; Florida
et al. 2001; Woolman and Veshagh 2006), technical (Lai et al. 2003; Perron 2005;
Freel 2000), poor external partnership (Ylinenpaa 1998; Hadjimanolis 1999),
insufficient information (Woolman and Veshagh 2006; Madrid-Guijarro et al.
2009), lack of government support (Madrid-Guijarro et al. 2009; Runhaar et al.
2008), lack of customer demand (Woolman and Veshagh 2006; Silva and Leitão
2007), environmental commercial benefit (Woolman and Veshagh 2006; Runhaar
et al. 2008), product innovation (Lai et al. 2003; Sarkis et al. 1998), process
innovation (Lai et al. 2003), and system innovation (Lai et al. 2003; Woolman and
Veshagh 2006).
4.3 Analysis
The structural equation modeling technique of PLS was applied using SmartPLS
Version 3.0 to test the research model. This technique has been used because of its
appropriateness for the exploratory nature of this study (Hair et al. 2011). In
addition, PLS is the preferred method when the sample size is small, and the model
is completed (Hair et al. 2013).
The two-step approach was used in data analysis as suggested by Hair et al.
(2013). The first step involves the analysis of the measurement model, whereas the
second step tests the structural relationships among the latent constructs. The two-
step approach aims to establish the reliability and validity of the measures before
assessing the structural relationship of the model.
5 Results
5.1 The sample
The descriptive analysis shows that about 88.2 % of the respondents’ companies are
from production and manufacturing of goods and the rest are from assembly
manufacturing of ICT items, telecommunication, agricultural or live stock goods
and related to mining (manufacture chemical and Substrate). Regarding the quality
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M. Abdullah et al.
of system qualification (status of ISO certification), almost all the respondents’

companies have ISO certification (94.1 %) such as ISO 9000, 9001 and 14000. In
addition, nearly half of the companies have a structured green innovation plan or
policy put in place by the company. A majority of the companies (68.6 %) have
been operating more than 10 years in Malaysia and have fully foreign-based
ownership (72.5 %).
5.2 Measurement model results
The reliability and validity of the reflective constructs were assessed. Composite
reliability (CR) needs to be assessed in connection with internal reliability which is
similar to Cronbach’s Alpha. The CR of all constructs were above 0.7 (Table 1),
satisfying the Hair et al. (2013) rule of thumb. Hair et al. (2010) suggested accepting
items with loadings of at least 0.6. Since the loadings associated with each of the
scales were all greater than 0.6, individual item reliability was judged acceptable.
The convergent validity was evaluated using the average variance extracted (AVE).
The AVE of all constructs was above 0.5, signifying a satisfactory degree of
convergent validity (Fornell and Larcker 1981).
To assess the discriminant validity of the constructs, two approaches were used.
First, the cross loadings of the indicators were examined. This revealed that no
indicator loads higher on an opposing construct (Hair et al. 2012). Second,
following the Fornell and Larcker (1981) criterion, each construct’s square root of
AVE exceeded the intercorrelations of the construct with the other constructs in the
model (Table 2). Both analyses confirmed the discriminant validity of all constructs.
As seen in Table 2, lack of poor external partnership is the barrier that highly
perceived by manufacturing companies in Malaysia (mean = 3.359) followed by
lack of customer demand (mean = 3.346), business practice barriers
(mean = 3.307), and technical barriers (mean = 3.202). Moreover, green product
innovation in the most common type of innovation among manufacturing
companies in Malaysia.
5.3 Assessment of the structural model
With the satisfactory results in the measurement model, the structural model was
evaluated subsequently. The predictive accuracy of the model was evaluated in
terms of the portion of variance explained. The results suggest that the model is
capable of explaining 59.0 % of the variance in green product innovation, 70.6 % in
green process innovation, and 43.7 % in green system innovation. Besides
estimating the magnitude of R2, researchers have recently included predictive
relevance developed by Stone (1974) and Geisser (1975), as additional model fit
assessment. This technique represents the model adequacy to predict the manifest
indicators of each latent construct. Stone-Geisser Q2 (cross-validated redundancy)
was computed to examine the predictive relevance using a blindfolding procedure in
PLS. Following the guidelines suggested by Chin (2010), a Q2 value of greater than
zero implies the model has predictive relevance. In the present study, a value of
0.408 was obtained as an average cross-validated redundancy (for all endogenous
123
Table 1 Measurement model evaluation

Variables Items Factor CR AVE
loadings
Environmental Face shortage of in-house skilled personnel to carry 0.934 0.953 0.801
resources barriers out green initiatives
(ERB) Trained employees in green technology don’t stay 0.844
long with the organization (people resigning from
the organization)
Is not willing to spend money on training and 0.943
development of employees for green innovation
initiatives
Face problem in getting information on green 0.894
innovation and also the willingness of employees to
learn is very low
Day-to-day work is very heavy and got no time for 0.855
green innovation activity
Attitudinal and Employees and manager only identify opportunity to 0.834 0.906 0.707
perception barriers change if adopting green innovation initiatives
(APB) creates gain and competitive advantage in the
market
Employees and manger prefer doing the job the same 0.792
way and reluctant to change
The employees and manager only change when there 0.897
is economic turbulence which act as a stimulus that
encourage my firm to become more innovative
(remedial change)
The employees and manager are complacent due to 0.836
current high product mix which yields high profit
Business practices Have no cost reduction initiatives or strategy in the 0.912 0.900 0.647
barriers (BPB) organization related to green product
Have a systematic plan to establish long-term 0.834
strategy for green innovation initiatives and
incorporate it into business plan
Have initiated well planned previous learning 0.746
programs in order to increase in-house knowledge
on green innovation initiatives
Keep abreast of new solutions emerging in the field 0.878
of green technology and new innovation practices
Adopted many manufacturing excellence practices 0.615
(GSCM, ISO, JIT, TQM, LEAN, SIX SIGMA etc.)
to improve business process, inventory, product,
and eliminate waste
Technical barriers Introduces new products on time to market to achieve 0.815 0.948 0.785
(TB) first mover benefits
Information related to green innovation technical 0.850
support is not available to management and
employees
Is facing lack of technical knowledge and expertise 0.885
relate to green innovation
Receive lower priority for future-oriented activities 0.919
such as green innovation initiatives work due to
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M. Abdullah et al.
Table 1 continued

loadings
insufficient capacity in time to pick-up technical
knowledge
Have low innovative index because of poor value 0.955
creation through R&D activities
Poor external Find it difficult to find the partner or supplier to 0.799 0.883 0.716
partnership (PEP) corporate and work on the green innovation
initiatives
Realize that suppliers are not ready to invest in 0.941
redesigning for green innovation initiatives
Have difficulties to find external partner who want to 0.791
invest in developing green innovation material or
technologies
Insufficient Insufficient availability of external sources of 0.970 0.834 0.565
information (II) information and advice regarding green innovation
initiatives
My company is uncertain about environmental 0.600
regulations
Insufficient availability of external sources of 0.705
information regarding green technologies and
alternative material which are environmental
friendly
Green knowledge available is not specific enough for 0.681
company to reduce environmental impact
Lack of government Getting approval from respective government 0.831 0.875 0.637
support (LGS) departments for support like information on green
innovation
Inadequate enforcement of environmental regulations 0.761
by government officers
Inadequate subsidies on green innovation initiatives 0.818
Poor support by government due to lack of 0.781
knowledge of green production/green
environmental leadership
Lack of customer Adopting green design has been influenced by 0.881 0.942 0.803
demand (LCD) business clients or end customer
Believes that there is limited growth opportunities 0.909
due to modest demand
Experience lack of customer responsiveness for green 0.864
innovation products in the market (new product)
Experience lack of customer responsiveness to new 0.930
green products in the market (for current product)
Environmental Believe that there would be little environmental 0.837 0.916 0.731
commercial benefit benefits by practicing green innovation
(ECB) Perceived that there is limited environmental 0.875
opportunities due to poor demand for their green
products
Experience that customer is not willing to pay for 0.856
green innovation products
Perceived that green benefit is little but cost is high 0.852
123
Table 1 continued

loadings
Green product (GP) Choose materials of the product that releases the least 0.847 0.965 0.753
amount of pollution during the green product
design and development stage
Choose the material of the green product that 0.770
consume the least amount of energy and resource
during the design and development stage
Would well-consider whether the green product is 0.887
easy to reuse and easy decomposed during the
product development and design stage
Would well-consider whether the green product is 0.934
easy to recycle during the product development and
design stage
Produce green products that are free from hazardous 0.863
material in the product (free from lead, mercury,
chromium and cadmium)
Uses environmental hazardous free packaging 0.873
materials (free from lead, mercury, chromium and
cadmium)
Make sure the green product made have re-workable 0.892
criteria
Produces green products that have minimum impact 0.813
to the environment during the End-of-life stage
Make sure the green product manufactured has 0.918
recyclable and reusable criteria
Green process (GPR) Manufacturing process effectively reduces the 0.841 0.926 0.676
emission of hazardous substance or waste
Manufacturing process recycle waste and emission 0.823
that allow them to be treated and re-used
Manufacturing process reduces the consumption of 0.878
water, electricity, coal or oil
Manufacturing process reduced the use of raw 0.811
materials
Emission of hazardous substance from green process 0.808
such as lead, mercury, chromium and cadmium an
etc. will be treated at end of process before
releasing to the landfill or environment
Implementing green initiatives will significantly 0.769
improved green process (good or service) to gain
competitive advantage
Green system (GS) Has more R&D and green innovation capabilities 0.814 0.963 0.765
compared to competitors
Had introduced a new product, process or services in 0.891
the preceding years related to green
Has a Environmental Management System (EMS) 0.907
that help to proactively control pollutions
Has adopted new cost control method in our process 0.918
0.881
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M. Abdullah et al.
Table 1 continued

loadings
Have implemented method and techniques to
minimize consumable materials and material waste
(improve reject rates in our process)
practice proactive management in addressing issue 0.875
during turbulence environment
Has adopted some form of techniques to improve 0.865
speed, error and waste in operation such as lean
manufacturing techniques, six sigma, total quality
management, supply-chain management, etc.
Product-life-cycle or cradle to grave activity has 0.843
taken into consideration the design level of product,
process, material and environmental impact when
designing green innovation initiatives
CR Composite reliability, AVE average variance extracted
variables) which is far greater than zero. In sum, the model exhibits acceptable fit
and high predictive relevance.
Nonparametric bootstrapping was applied (Wetzels et al. 2009) with 2000
replications to test the structural model. The structural model resulting from the PLS
analysis is summarized in Table 3. As the results show, H1a,c, H2a,b,c, H3a,b,c,
H4c, H5b, H6b, H7a,b,c, H8a,b, and H9b,c were supported and other the hypotheses
were rejected.
6 Discussion
Environmental issues and green innovation have been receiving continuous

attention and pressure from business sectors because of the growing concern over
environmental destruction. Despite this fact, few Malaysian manufacturers practice
green product, process, or system innovation. The lack of awareness on green
innovation barriers prevents successful practice of green innovation among
Malaysian manufacturers. The aim of this study was to investigate the internal
and external barriers to green innovation initiatives among Malaysian manufactur-
ers. The findings show that the barriers to green product, process, and system
innovation initiatives are different among manufacturing companies in Malaysia as
discussed in the subsequent text.
According to the findings of the present study, environmental resource barriers
have negative effects on the adoption of green product and green system
innovations. Insufficient environmental resources, such as the number, tenure,
experience, dedication, and knowledge of environmental staff, lead to a lack of in-
house expertise (Woolman and Veshagh 2006) in an organization. The lack of
expert staff on green innovation initiatives is a serious issue because the
development of and emphasis on green innovation in Malaysia is new. The
importance of environmental resources in green product innovation is higher than
123
Table 2 Discriminant validity coefficients
ERB APB BPB TB PEP II LGS LCD ECB GP GPR GS
ERB 0.895
APB 0.465 0.841
BPB -0.135 -0.198 0.804
TB 0.543 0.359 -0.269 0.886
PEP 0.112 0.111 0.339 0.147 0.846
II 0.077 0.134 0.337 0.056 0.307 0.752

LGS 0.088 0.226 0.529 0.105 0.277 0.416 0.798
LCD 0.216 0.297 -0.010 0.289 0.187 0.257 0.400 0.896
ECB -0.115 -0.095 0.250 0.052 0.199 0.283 0.247 0.170 0.855
GP -0.598 -0.582 -0.151 -0.483 0.076 -0.112 -0.330 -0.450 -0.069 0.868
GPR -0.333 -0.617 -0.115 -0.077 -0.219 -0.082 -0.030 -0.094 -0.271 0.180 0.822
GS -0.466 -0.512 -0.204 -0.448 0.091 -0.116 -0.225 -0.231 -0.199 0.571 0.335 0.875
Mean 3.108 3.170 3.307 3.302 3.359 3.108 3.260 3.346 2.922 3.780 3.314 3.145
SD 0.945 0.864 0.747 0.920 0.797 0.856 0.786 0.834 0.835 0.887 0.777 0.8553
Diagonal terms (in bold) are square roots of the AVE
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M. Abdullah et al.
other types of green product innovations, because human resources play a very
important role in producing green products (Mehrabi et al. 2000). Green product
innovation involves the development of green products from the research and
development stage, which needs skilled staff in the area of being green. However,
managers of manufacturing companies should attract, train, and retain skilled staff
for the successful implementation of green product and green system innovation.
The results also show that improper attitudes and perceptions toward green
innovation is a barrier among manufacturing companies in Malaysia that negatively
affects their green product, process, and system innovations. The managers and
employees should not have perceptions or beliefs that new green innovation
Table 3 Path coefficients and

Hypothesis Relationships Path coefficient Decision
hypothesis testing
Green product innovation
H1a ERB ? GP -0.348*** Supported
H2a APB ? GP -0.248** Supported
H3a BPB ? GP -0.119* Supported
H4a TB ? GP -0.101 Not supported
H5a PEP ? GP 0.051 Not supported
H6a II ? GP -0.042 Not supported
H7a LGS ? GP -0.263*** Supported
H8a LCD ? GP -0.195** Supported
H9a ECB ? GP -0.057 Not supported
Green process innovation
H1b ERB ? GPR -0.094 Not supported
H2b APB ? GPR -0.803*** Supported
H3b BPB ? GPR -0.503*** Supported
H4b TB ? GPR -0.054 Not supported
H5b PEP ? GPR -0.173** Supported
H6b II ? GPR -0.183* Supported
H7b LGS ? GPR -0.348*** Supported
H8b LCD ? GPR -0.148** Supported
H9b ECB ? GPR -0.178** Supported
Green system innovation
H1c ERB ? GS -0.172* Supported
H2c APB ? GS -0.236** Supported
H3c BPB ? GS -0.212** Supported
H4c TB ? GS -0.196* Supported
H5c PEP ? GS 0.037 Not supported
H6c II ? GS -0.074 Not supported
H7c LGS ? GS -0.271** Supported
H8c LCD ? GS -0.034 Not supported
* p \ 0.05, ** p \ 0.01, H9c ECB ? GS -0.203** Supported
*** p \ 0.001 (one tailed)
123
initiatives will have little environmental benefits (Williander 2006). Malaysian

employees are not willing to risk their jobs or safety for innovation (Pawanchik and
Sulaiman 2010). This risk will deter employees from creatively thinking out of the
box for new process and product designs. Poor communication, poor existing
corporate norms, weak human resource practices, and lack of commitment from top
management are the potential drivers of employee resistance to innovation (Zwick
2002; Osterman 2000; Kane et al. 1999). Therefore, managers must be open-minded
and able to create an environment that can cultivate change in the organization
(Madrid-Guijarro et al. 2009). Organizations must be able to give opportunities to
employees to try new things to generate creative ideas, new processes, improved
systems, and better products by continuous improvement initiatives (Williander
2006).
Business practice risk is another barrier to green product, process, and system
innovation. All manufacturers’ excellent practices and the previous learning,
knowledge, and experience in business practices will be underlying propositions for
the organization to enjoy better chances and to have the ability to focus attention,
effort, and energy on implementing green innovation initiatives and practices
(Florida et al. 2001). For example, a study conducted by King and Lenox
(2000)claimed that lean concept adoption can lower toxic chemical pollution and
reduce greenhouse gas emissions in a proactive manner instead of the end of the
pipe control method, which is costly. Therefore, the lack of previous manufacturers’
excellent practices has a negative effect on innovation initiatives.
Technical knowledge barriers have no significant effect on product and process
innovation and only affect system innovation. The lack of expertise on green
technology and the lack of knowledge on green operations are the potential causes
of low green innovation adoption (Silva et al. 2008). Companies with better R&D
will have more capabilities in green system innovation (Lai et al. 2003). Therefore,
the Malaysian manufacturers should invest in green R&D.
Poor external partnership barriers have negative effects on green process
innovation initiatives in Malaysian manufacturing companies. Large and mature
organizations will always want to extend their good production processes, practices,
and systems to their partners or suppliers via the customer–supplier relationship
program. This intention will actually create a win–win situation for both parties in
terms of high quality, less waste, shorter cycle time, shorter lead time, better control
method, lower cost, and higher profit to both parties in the long run (van Hemel and
Cramer 2002). From this situation, the poor external partnership between
organizations in green innovation negatively affects green process innovation. In
addition, the results of the study revealed that external partners have no significant
effect on green products. Finding partners and suppliers who want to cooperate and
work on green innovation initiatives is difficult (Ylinenpaa 1998). The lack of
partnership in green product innovation is mainly due to the high cost, long payback
period, difficulties in protecting intellectual properties, high monitoring cost, and
difficulty in accessing the viability of innovation, making the challenge of financing
innovation even more difficult (Freel 2000; Woolman and Veshagh 2006). These
difficulties discourage organizations from taking part in green product innovation
initiatives (Hewitt-Dundas 2006; Hausman 2005).
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M. Abdullah et al.
The insufficient information on market and technology is another barrier of green

process innovation. The lack of awareness on relevant green information on the
market and green technology is a setback to organizations (Woolman and Veshagh
2006). Finding the right process to combat greenhouse gas emissions is difficult for
companies because they are uncertain about environmental regulations and
requirements (Woolman and Veshagh 2006).
Lack of government support is another barrier that has negative effects on all
three types of green innovation initiatives in Malaysian manufacturing companies.
The government sets the regulations and incentives that induce organizations to take
up green initiatives, but the control and pressure to comply to be green is poor
(Runhaar et al. 2008; Eltayeb et al. 2011). The control comes only if complaints are
made by the public or if the government itself notices the harmful practices of an
organization. Pressure will be exerted on this organization, which may also lead to a
temporary closure to rectify the situation and to put system processes in place.
Although the Malaysian government promotes green activities and grants financial
aids and incentives to manufacturers who embark on green initiatives or products,
government support remains lacking toward nurturing green innovation initiatives
in Malaysian manufacturing companies.
Lack of customer demand is the next barrier to green product and process
innovation. Silva and Leitão (2007) mention that organizations experience limits on
customer demand for green innovative products in the market because green
products are expensive. Therefore, organizations believe in limited growth
opportunities for practicing green innovation, and because of this belief, they are
not willing to take high risks to develop green innovative products and process
(Runhaar et al. 2008; Silva and Leitão 2007).
Finally, the result of the present study reveals the negative effects of the lack of
environmental commercial benefits on green process and system innovation. This
finding is consistent with van Hemel and Cramer (2002) and Woolman and Veshagh
(2006), who stated that few environmental commercial benefits may be reaped from
green innovation initiatives, reducing green innovation initiatives in firms.
7 Managerial and policy implications
The results reveal the internal and external barriers to each type of green innovation
for the managerial groups of Malaysian manufacturers. They will help them to
understand and combat the internal and external barriers to the type of green
innovation that their organizations want to practice. The results are helpful for
manufacturing firms to easily apply green innovation by removing the barriers. In
addition, barriers to green innovation are a useful concept to prioritize innovation
policies. The evidence on internal barriers to innovation is of interest to
policymakers and may inter alia be shaped by framework conditions such as
corporate governance and industrial relations. Evidence on external barriers to
innovation provides a rationale for using more direct innovation policy channels.
To diffuse green product innovation, manufacturing firms and policymakers
should direct their attention toward environmental resource barriers, attitudinal and
123
perception barriers, and business practice barriers, and the government should
address the lack of government support and customer demand issues. The diffusion
of process innovation can be accelerated by addressing attitudinal and perception
barriers, business practice barriers, poor external partnership, insufficient informa-
tion, lack of government support, lack customer demand, and lack of environmental
commercial benefits. Regarding green system innovation, manufacturing firms and
policymakers need to give special attention to environmental resource barriers,
attitudinal and perception barriers, business practice barriers, technical barriers, lack
of government support, and lack of environmental commercial benefits.
8 Limitations and recommendations to future studies
Certain limitations need to be considered in generalizing the results of this study.

One limitation is that the study tested and verified the hypotheses with a
questionnaire survey and only provided a cross-section of the study in nature.
Therefore, it limits the ability to imply causality in the relationships among the
variables. Thus, the results of the survey are affected by the fact that this study
cannot observe the dynamic change of green innovation in the process of addressing
the internal and external barriers. As such, a longitudinal study should be attempted,
one that examines the relationships for an extended period to be able to provide
results that are more precise. Furthermore, the population for this study is specific
only to manufacturing companies. Consequently, service and non-manufacturing
companies that may want to apply the results of this study need to be more
conscious because the internal and external barriers might vary with the types of
industries. In addition, this study used a survey sample limited to Malaysian
manufacturing companies. However, the maturity of the internal and external
barriers to green innovation might be different among countries. Thus, future
research could test the research model of this study in non-manufacturing
companies and in other countries. The study also suggests conducting the study
in different regions of a country to provide the opportunity for data comparison and
to obtain more information. Our analysis indicated that barriers to green product
innovation, green process innovation, and green system innovations are varied;
therefore, we call for qualitative research to investigate the potential reason of these
differences.
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Barriers to green innovation initiatives among manufacturers: the Malaysian

Article in Review of Managerial Science · May 2015

Suhaiza Zailani Mohammad Iranmanesh

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Mirza Abdullah, Suhaiza Zailani,

Review of Managerial Science

Rev Manag Sci

Barriers to green innovation initiatives

Mirza Abdullah1 • Suhaiza Zailani2 •

Received: 3 October 2014 / Accepted: 4 May 2015

& Mohammad Iranmanesh

Keywords Barriers ! Green innovation ! Manufacturers ! Malaysia

Mathematics Subject Classification 62G08

2 Literature review and model conceptualization

2.1 Green innovation initiatives

Green innovation is the exploitation, production, or assimilation of a service,

that strengthen green environmental performance of a company, enhancing

2.2 Barriers to innovation initiatives

In terms of innovation under social uncertainty, the effect of the external

2.3 Barriers to GSCM initiatives

Literature survey has emphasized various kinds of barriers that hinder an

2.4 Model conceptualization

(lack of skilled personnel, turnover of qualified employees, lack of internal

3.1 Environmental resources barriers

Experts in environmental management are important in building sustainable

Fig. 1 Research framework

H1: Environmental resource barriers have a negative effect on the adoption of

3.2 Attitude and perception barriers

3.3 Business practices barriers

As mentioned by Ōno (1988), the track record for organizations to implement

3.4 Technical barriers

Lack of technical information and knowledge will lead to difficulties in finding

3.5 Poor external partnership

Building external partners is important to support the green innovation initiatives

3.6 Insufficient information

3.7 Lack of government support

The government does not support green innovation initiatives in Malaysia by

on green production or environmental leadership (Runhaar et al. 2008) and lack of

3.8 Lack of customer demand

3.9 Environmental commercial benefit

Data collection consisted of two separate phases. Initially, semi-structured

following subsections, we discuss the data collection, measure of constructs, and

4.1 Data collection and the sample

The sampling frame of this study consists of manufacturing companies in Malaysia

4.2 Measure of constructs

The questionnaire is divided into five sections: company’s basic information,

5.1 The sample

of system qualification (status of ISO certification), almost all the respondents’

5.2 Measurement model results

5.3 Assessment of the structural model

Table 1 Measurement model evaluation

Variables Items Factor CR AVE

Variables Items Factor CR AVE

Variables Items Factor CR AVE

CR Composite reliability, AVE average variance extracted

Environmental issues and green innovation have been receiving continuous

II 0.077 0.134 0.337 0.056 0.307 0.752

Diagonal terms (in bold) are square roots of the AVE

Table 3 Path coefficients and