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K
51,3 How top management’s
environmental awareness affect
corporate green competitive
1250 advantage: evidence from China
Received 25 January 2021 Cuizhen Cao
Revised 27 March 2021
7 April 2021 Faculty of Business Administration, Shanxi University of Finance and Economics,
Accepted 8 April 2021 Taiyuan, China
Xiujun Tong
CRRC Datong Electric Locomotive Co., Ltd., Datong, China, and
Yunqi Chen and Yue Zhang
Faculty of Business Administration, Shanxi University of Finance and Economics,
Taiyuan, China

Abstract
Purpose – Green ambidexterity innovation and green competitive advantage are of great significance to
enterprises’ sustainable development. From the perspective of upper echelons theory, This paper aims to
investigate the role of top managers in gaining green competitive advantage and the intermediary effect of the
green ambidexterity innovation between them.
Design/methodology/approach – This paper uses empirical data from heavily polluting enterprises in
China for constructing a model to infer how enterprises achieve the green competitive advantage.
Findings – The paper shows that (a) top managers’ environmental awareness and the green ambidexterity
innovation are both positively related to the green competitive advantage of enterprises, while there is a
difference between the exploitative green innovation and the exploratory green innovation regarding the
heterogeneity; the positive effect of the exploratory green innovation on enterprises’ green competitive
advantage is greater than that of the exploitative green innovation; (b) the green ambidexterity innovation
plays a partial intermediary effect between top managers’ environmental awareness and enterprises’ green
competitive advantage and (c) strategic flexibility positively moderates the relation between the green
ambidexterity innovation and the green competitive advantage. The study concludes that top managers’
environmental awareness has a significantly positive impact on reinforcing green competitive advantages
and adopting the green ambidexterity innovation for heavily polluting enterprises in China.
Originality/value – This paper contributes to the green innovation management literature by offering a
theoretical framework for examining how top managers’ environmental awareness influences enterprises’
green competitive advantage.
Keywords Environmental awareness, Exploitative green innovation, Exploratory green innovation, Strategic
flexibility, Green competitive advantage, Green ambidexterity, Top manager
Paper type Research paper

1. Introduction
Guided by the conviction that lucid waters and lush mountains are invaluable assets, the
country advocates harmonious coexistence between humans and nature and sticks to the path
of green and sustainable development, which points out the direction for the harmonious
development of China’s economic society and ecological environment in the new era. The green

Kybernetes
Vol. 51 No. 3, 2022
pp. 1250-1279 Funding: The Research was supported by National Natural Science foundation of China (grant no.
© Emerald Publishing Limited 71774105) and Humanities and Social Sciences Funding Project of Ministry of Education in China
0368-492X
DOI 10.1108/K-01-2021-0065 (project no. 17YJA63004).
development of industry, together with the development trend of intelligence and service Corporate
orientation, is reconstructing the global industrial system and competition pattern (Shi, 2018). green
With a new round of industrial revolution rising, green and low carbon has become the only
way for the global economic development. China is still at the middle and low end of the global
competitive
industrial division of labor; the key to completely change the situation lies in innovation-driven advantage
transformation and upgrading and the realization of green development. Neo-Schumpeterian
growth theory holds that endogenous technological progress ensures sustained economic
growth and development, and the innovation-driven development system should regard the 1251
enterprises as the main body of innovation-driven development on the micro basis. However,
the lack of innovation capability of most existing Chinese enterprises has become a key obstacle
to the construction of the innovation-driven development system (Liu et al., 2017). From the
micro-firms level, it is an inevitable requirement to adapt to the complex macro background of
new and old kinetic energy conversion. Especially under the background of the increasingly
strict environmental regulations, sustainable development has become the correct direction for
Chinese enterprises to gain new drivers of growth in the uncertain environment, as well as the
inevitable choice to break through the bottleneck of development (Xu et al., 2019).
The antecedents of sustainable development are complex. Most research focus on the
underlying cognitive determinants of sustainability development. For example, Mu~ noz (2017)
insists that sustainable decision-making in the business context and entrepreneurship in
particular have involved many dimensions including values, awareness, motivation, intention
and self-efficacy toward sustainable value creation. Ploum et al. (2018) confirms that pro-
environmental behavior values and moral competencies of individuals are important indicators
of the ability to recognize entrepreneurial opportunities for sustainable development. Hahn et al.
(2014) propose two cognitive frames—a business case frame and a paradoxical frame—and
separately explores their different influences on the sensemaking process with regard to
sustainability issues. Kraus et al. (2020) discuss the micro-foundational cultural, behavioral and
moral identity antecedents linked to “tangible” and “intangible” perspectives of sustainability
in an SME context. Accordingly, top managements’ cognitive is one of the most important
antecedents of sustainable development for enterprises. These studies focus on the impact of
individual cognition on the enterprises’ sustainable development as a whole without
elaborating it. Environmental awareness refers to the cognitive level of the environment and
environmental protection formed by the top managements in the cognitive process. In addition,
obtaining green competitive advantage is one of the core factors and final result of sustainable
development. Therefore, based on upper echelons perspective (Hambrick and Mason, 1984),
which holds that top managers with different background and characteristics will have
different values and personal cognition, these factors will directly affect their communication
and cooperation in work and then indirectly affect relevant decisions and corporate
performance; this article innovatively examines the impact of top managers’ environmental
awareness on the green competitive advantages of enterprises. The paper also divides the
dynamic evolution of the green innovation into the exploitative green innovation and the
exploratory green innovation, trying to analyze the transmission mechanism between top
managers’ environmental awareness and the green competitive advantages of enterprises and
introduces strategic flexibility as a scenario variable to explore its moderating effect on the
relationship between the green innovation and green competitive advantage under the
background of ecological civilization construction in China.
Our study adds values in two ways. First, the theoretical contributions are as follows:
(1) This paper incorporates top managers’ environmental awareness, green innovation and
green competitive advantage into one model, which is helpful to explain the transmission
path between top managers’ environmental awareness and the green competitive advantage
of enterprises and reveal the “black box” of how top managers’ environmental awareness
plays a role. (2) By testing the application of top managers’ environmental awareness theory
K in the context of China, this paper further enriches the variables of top managers’
51,3 environmental awareness and makes new contributions to the upper echelons theory. (3) The
paper divides ambidextrous green innovation into the exploratory green innovation and
exploitative green innovation and then explores the heterogeneity of their influence on green
competitive advantage, which further develops the green innovation theory. (4) This paper
adds the variable of strategic flexibility to the process of the green innovation’s effect on the
green competitive advantage, which more accurately explains the essence of the effectiveness
1252 of green innovation on green competitive advantage. It provides a more specific boundary
range for the influence mechanism of the green innovation on the enterprises’ green competitive
advantage and validates the effectiveness of the Porter hypothesis to some extent.
The empirical contributions are as follows: (1) Under the background of China’s
ecological civilization construction and economic transformation, top managers often have
a significant impact on the green innovation activities and strategic transformation of
enterprises. Considering current conditions, it is very urgent to explore the possible impact
of top managers’ environmental awareness and green innovation on the green competitive
advantage of enterprises. The research results are expected to provide important guidance
for enterprises in the management practice of green innovation-driven transformation and
development. (2) Examining the effect of top managers’ environmental awareness on
enterprises’ green competitive advantage in an emerging economy. The existing body of
literature has focused on the investigation of this question in developed economies.
Nonetheless, many developing countries are being confronted by serious environmental
challenges—including China. Therefore, it is of great significance to shed light on the green
development of emerging economies.
The rest of this article is structured as follows: Section 2 is about the literature review and
hypothesis development. Section 3 provides the methodology, including variables
measurement and data collection. Section 4 consists of data analysis and results. Section 5
and Section 6 are the conclusion and discussion, respectively.

2. Hypothesis development and theoretical model

2.1 Theory logics
Driven by the global tendency of green development, the construction of enterprises’ green
competitive advantage has become a new hot strategic issue, especially in the context of
China, where it urgently needs a new theoretical system for further development. Green
competitive advantage is postulated as a condition in which organizations occupy several
positions in the field of environmental protection or green innovation, and competitors cannot
imitate the successful environmental strategy, thus resulting in the organization obtaining
sustainable benefits from its unique environmental strategy (Chen and Chang, 2013).
A company’s green competitive advantage can be obtained from the stock of organizational
capabilities, operating processes, employee commitment, intellectual capital management,
reward systems, database management, managerial institutions and philosophy, corporate
culture, corporate image, brand, trademarks and patents and copyrights among others that
are related to environmental protection or green innovation (Chen, 2008a, b) As for
environmental consciousness, it is one of the best types of corporate culture that plays an
important role in the successful implementation of green management (Chang and Chen,
2012). From the perspective of upper echelons theory, the organization is viewed as a
“reflection of its top managers’ values,” beliefs, attributes of top echelons influence corporate
outcomes. Top managers’ environmental awareness, as one of top managers’ attributes, will
affect the strategies of enterprises when they are confronted with environmental issues
(Xu et al., 2017). Huang and Kung (2011) discovered that top managers with high
environmental consciousness will have the skills, abilities, knowledge, creativity and good
attitude to handle environmental problems appropriately. In addition, it also has the right Corporate
information about market networks and strong relationships with external parties in order to green
obtain a competitive advantage. In view of this, this paper focuses on the effect of top
managers’ environmental awareness on corporate green competitive advantage and further
competitive
assumes that it has a mediating role in the relationship between environmental consciousness advantage
and green competitive advantage.
In addition, top management with a higher awareness of the environment will identify the
potential benefits and market opportunities of the green innovation (Peng and Wei, 2015). 1253
Coupled with high environmental awareness, top managers have a more open and supportive
attitude toward the green innovation. At the same time, they are good at coding the acquired
information and integrating them with corporate resources, absorbing internal and external
knowledge of organizations and applying them to the green innovation (Tseng et al., 2013).
Meanwhile, many previous studies found that green innovation is of great importance for
companies to gain a competitive advantage. Porter et al. (1995a, b) view innovation as one of
the key forces to increase corporate competitive advantage. Green products and processes
innovation increase enterprise’s competitive advantage in the information and electronics
industry (Chen et al., 2006). Organizations that pioneer environmental innovation can gain a
competitive advantage and then expand the sale of their green products or services
(Chen et al., 2006). Green innovation is closely related to both top managers’ environmental
awareness and enterprises’ green competitive advantage. So, the paper will examine whether
the green innovation is a partial mediator in the relationship between environmental
consciousness and green competitive advantage.
As the business environment becomes more and more complex and changeable, there has
been a growing emphasis on the strategic importance of strategic flexibility (Santos-Vijande
et al., 2012; Shimizu and Hit, 2004; Toni and Tonchia, 2005). Strategic flexibility is found in
company with a distinct competitive advantage (Kashani Nik, 2012). Different levels of
strategic flexibility have different promoting effects on the transformation of green innovation
into corporate green competitive advantage. Therefore, this paper takes strategic flexibility as a
regulating variable in the relationship between the green innovation and enterprises’ green
competitive advantage.
When involved in top managers’ environmental awareness at the beginning, multiple
classification methods exist. Based on the research of Gadenne and Mckeever (2009) and
Huang and Kung (2011), according to the differences of cognitive orientation, the paper divides
top managers’ environmental awareness into two dimensions: top managers’ environmental
awareness of responsibility and top managers’ environmental awareness of benefits.
In terms of the mediating variable, the green innovation is an extremely complicated
process of technological innovation and marketization, which is different from general
innovation activities. Therefore, the green innovation needs to integrate common resources
with core resources to specifically realize the integration of new technologies and new
conceptions through exploitative and exploratory activities (Della et al., 2017). Ambidexterity
innovation, which combines exploitation and exploration, enables enterprises to explore new
opportunities and develop existing capabilities, as well as optimizes the resource structure
(Benner and Tushman, 2003), which can effectively balance the short-term interests and long-
term strategic objectives of the green innovation. Exploration involves the creation of
radically new knowledge, whereas exploitation involves the incremental development of
existing knowledge (Levinthal and March, 1981; Benner and Tushman, 2003). This paper
introduces the green ambidexterity innovation into the model in order to explore the effect of
green innovation more deeply.
In conclusion, the paper serves the green innovation as the intermediary variable between
top managers’ environmental awareness and enterprises’ green competitive advantage. At
K the same time, the moderator variable – strategic flexibility is added. The conceptual model
51,3 is shown in Figure 1.

2.2 Top managers’ environmental awareness and green competitive advantages

Top managers’ environmental awareness refers to the perception and attention of top
managers to environmental issues based on their unique knowledge structure, experience and
values (Chen and Chen, 2019). From the perspective of the cognitive response theory of
1254 social psychology, top managers’ environmental awareness is mainly based on their cognitive
models, values and experience to judge whether the enterprises facing opportunities or threats
and then making bounded rational decisions (Hambrick and Mason, 1984). According to the
work of Gadenne and Mckeever (2009) and Huang and Kung (2011), the paper divides top
managers’ environmental awareness into top managers’ environmental awareness of
responsibility and top managers’ environmental awareness of benefits. The former means
that top managers assume social responsibility as moral constraints and take active
environmental protection measures to reduce the negative effects on the environment. Whereas
top managers’ environmental awareness of benefits means that top managers believe that
taking environmental protection measures can reduce costs and increase profits, it mainly
reflects the profit purpose of enterprises.
As for competitive advantage, in the field of enterprise strategic management, it is defined
as a comparative advantage; that is, an enterprise has a competitive advantage when it can
implement a value creation strategy that other existing and potential competitors have not
adopted (Barney, 1991). Green competitive advantage is the advantage brought by the green
management of enterprises with green resources or green capabilities in the industry, which
reflects enterprises’ comparative advantage in products and services in the market. By
complying with the regulations and industrial standards and promoting the development of
the ecological environment, enterprises that provide consumers with more green products
and services and create more value than their competitors in the same industry. The
enterprise that integrates its interests and profits into the process of creating environmental
value and consumers can form a market advantage that competitors can hardly imitate and
then gain a green competitive advantage (Chen and Tian, 2019).
Ahmed et al. (1998) and Naffziger et al. (2003) found that there is a positive relationship
between environmental consciousness and organizational performance in the environmental
era, while organizational performance is one of the main factors of improved competitive
advantage. Chen (2011) concluded that if an organization focuses on handling environmental
issues well, it will gain a competitive advantage. This is achieved mainly through two
aspects. On the one hand, top managers with strong environmental awareness can subtly
discover the opportunities hidden in the environment, which is the key factor of enterprises’

Strategic Flexibility

H2 H5
TMEA GAI
(H2a, H2b) (H5a, H5b)
Top managers’ Green
(H2c, H2d)
environmental H3
Ambidexterity Green Competitive
awareness (H3a, H3b)
Innovation Advantages
H4(H4a, H4b, H4c, H4d)
Figure 1.
Hypothesized
H1
theoretical model
(H1a, H1b)
growth (Yang and Zhou, 2005). On the other hand, top managers who have a strong Corporate
awareness of environmental protection have keen insight into environmental problems; they green
are better able to grasp the essence of the problem and then respond quickly, which enable
enterprises to achieve strategic objectives and enhance their competitiveness without
competitive
investing too many human resources and material resources (Roth, 2000; Kor and Mesko, advantage
2013). From the perspective of information asymmetry and cognitive distance, the company
should provide information about their interest in CRS for the stakeholders. If the information
collected by the stakeholders is consistent with the former, it can cause the condition to 1255
emerge for a collaborative and long-term companies-stakeholders relationship, which is of
great importance in gaining competitive advantage (Caputo, 2020). Top managers with high
environmental awareness are more likely to help achieve it.
The following is an analysis of the two dimensions of top managers’ environmental
awareness. Top managers with high environmental awareness of responsibility regard
environmental protection as the responsibility of enterprises and the premise of its
development (Carpenter et al., 2004). They are more likely to advocate and implement the
concept of energy conservation and environmental protection in the business process.
Especially under the double pressure of energy shortage and environmental protection, the
awareness will push companies to actively adopt a forward-looking environmental strategy
and treat it as a positive incentive to obtain a green competitive advantage. However, top
managers’ environmental awareness of benefits means that top managers with a strong
awareness of benefits tend to implement more environmental protection measures to increase
the utilization rate of resources to reduce costs and increase profits (Gadenne and Mckeever,
2009). Energy conservation and environmental protection are the means to pursue interests.
If enterprises want to obtain a green competitive advantage, they must cater to the trend of
environmental protection orientation and produce green products to meet the market demand
(Cao and Chen, 2017). Based on the above discussion, the authors postulate that
H1. Top managers’ environmental awareness has a positive effect on green competitive
advantages.
H1a. Top managers’ awareness of responsibility for environmental protection has a
positive effect on sustainable green advantages in the enterprise.
H1b. Top managers’ awareness of benefits for environmental protection has a positive
effect on sustainable green advantages in the enterprise.

2.3 Top managers’ environmental awareness and the green ambidexterity innovation
According to the research of Li et al. (2008), this paper considers green innovation as a process
of green knowledge production, application and diffusion. March (1991) divides technological
innovation into the exploitative innovation and exploratory innovation. The exploitative
innovation is the innovation that refines and applies existing knowledge and technology,
while the exploratory innovation is the innovation that explores new knowledge, discovers
new opportunities and develops new technologies. With the studies develop in depth, the
popular “ambidexterity” premise proposed by Tushman and O’Reilly (1996) argues that
firms need to achieve a “balance” between exploitative activities and exploratory activities
to achieve superior performance, which is the core of the ambidexterity innovation
theory. Successful organizations are able to use the exploitative and exploratory innovation
simultaneously to achieve ambidexterity innovation. Ambidexterity innovation enables
enterprises to explore new opportunities while developing existing capabilities, which is the
source power of the survival and sustainable development of enterprises. Therefore, this
paper combines the theory of “green development” and “ambidexterity innovation” to
reinterpret green innovation. In this study, green innovation is defined as taking the concept
K of green development as the purpose, integrating the internal and external resources and
51,3 capabilities. Enterprises try to realize the integration of the new technologies and new
meanings through the exploitative and exploratory activities in order to achieve the
sustainable development. It is a dynamic process that includes the new activities that consider
the green development of enterprises or reduce the negative impact of business processes on
the environment in terms of technology, products, services, processes, organizations, markets,
etc. (Dell et al., 2017).
1256 Environmental consciousness will influence green innovation and organizational business
operations (Schlegelmilch et al., 1996). Burki and Dahlstrom (2017) pointed out that the
attitudes and commitments of top managers for the environment affect the green innovation,
which, in turn, helps to establish a good surrounding for cooperation. The possible reason
maybe that top managements with high environmental awareness have an open and
supportive attitude toward green innovation; they are good at coding the acquired information
and integrating them with corporate resources, absorbing internal and external knowledge of
organizations and applying them to green innovation and responding to environmental issues
actively (Tseng et al., 2013). Meanwhile, top management who has a higher awareness of the
environment is more willing to take the responsibility for green innovation and invest
resources and capabilities in the green innovation (Burki and Dahlstrom, 2017). The stronger
top managers’ environmental awareness, the more attention they paid to the requirements of
environmental regulation on the practical legitimacy of enterprises. After reaching the bottom
line of environmental regulation, enterprises are particularly affected by the awareness of top
managers, and top managers with intense responsibility consciousness likely to drive
enterprises to actively implement green and clean technologies, reduce the cost of pollution
penalties and establish good government relations (Li et al., 2017).
On the strategic level, the strengthening of top managers’ environmental awareness will
enable enterprises to form a green environment-friendly atmosphere and encounter less
resistance in carrying out green innovation activities conducive to the implementation and
success of the green innovation strategy (Zhang et al., 2015). Firstly, coupled with a high level
of environmental protection awareness, top management can not only identify market
opportunities from the business environmental, but also help enterprises to allocate internal
resources or capabilities rationally into green innovation and form an environment-friendly
corporate culture. Secondly, top managers with high environmental awareness can perceive
the harm brought by improper environmental behavior in advance and then will pay more
attention to the green technological innovation in the production process and provide green
products for consumers for the long-term development (Xu et al., 2017). The higher the
environmental protection awareness of top managers, the more top managers recognize the
benefits of environmental protection and will care less about the large number of resources
invested in green innovation practices (Cao and Chen, 2017).
Furthermore, top managers with high awareness of environmental responsibility will
integrate environmental protection behaviors into their values. Whether it is using existing
knowledge, resources, and technology reserves to conduct exploitative green innovation or
the subversion of previous production models for the exploratory green innovation, they will
engage in ecological innovation initiatively to reduce the damage to the environment (Peng
and Wei, 2015). Top managers with high benefits awareness of environmental protection can
realize the potential benefits from following environmental protection actions and can have
keen insight into consumers’ green needs and green willingness to pay. Enterprises tend to
continuously develop new environmental products and green production processes through
exploitative innovation activities and/or exploratory innovation activities to meet the green
needs of consumers (Burki and Dahlstrom, 2017). At the same time, enterprises have
expanded their market share and won more consumers’ favor through the good green image
established by the green ambidexterity innovation so as to obtain greater benefits (Wang Corporate
et al., 2018). Therefore, the authors hypothesize that green
H2. Top managers’ environmental awareness has a positive effect on the green competitive
ambidexterity innovation. advantage
H2a. Top managers’ environmental awareness of responsibility plays a positive role in
the exploitative green innovation.
1257
H2b. Top managers’ environmental awareness of benefits plays a positive role in the
exploitative green innovation.
H2c. Top managers’ environmental awareness of responsibility plays a positive role in
the exploratory green innovation.
H2d. Top managers’ environmental awareness of benefits plays a positive role in the
exploratory green innovation.

2.4 Green ambidexterity innovation and green competitive advantages

Raza (2020) confirmed that green innovation improves the economic and environmental
performance of firms in Japanese and European, respectively. Yan and Zhang (2021) also
found that the green innovation has a positive effect on the environmental performance of
firms. Economic performance and environmental performance are the ultimate goal and
result of gaining competitive advantage for enterprises. In order to explore the mediating role
of green innovation more meticulously, the paper introduces the green ambidexterity
innovation.
The exploitative innovation and exploratory innovation are the prominent characteristics
of ambidextrous organizations (Jansen et al., 2006), and they are the key elements for
organizations to obtain and maintain competitive advantage (Benner and Tushman, 2003).
Green ambidexterity innovation helps enterprises to discover the new market and investment
opportunities, reduce costs and increase profits, which in company with competitive
advantages (Porter et al., 1995a, b). In essence, the green ambidexterity innovation establishes
a heterogeneous green resource system for enterprises, which is conducive to preventing
other competitors from imitating and ensuring the leading position of enterprises in the
market (Cao and Zhao, 2017). As for exploitative green innovation, it is an improvement on
the existing green technology, enterprises can effectively reduce the cost and risk, which is a
benefit to accelerate the speed of innovation and obtain the market-leading advantages. At
the same time, the higher the degree of exploitative green innovation of enterprise, the more
frequently it will improve the existing green technology, which makes the improved green
products have superiority in efficiency and benefit (Duncan, 1976). Through new green
design, green production and green operations, the exploratory green innovation can improve
the resource productivity of enterprises continuously and then obtain the premium benefits
brought by green products (Ma et al., 2016). Moreover, the exploratory green innovation can
also offset or surpass the costs caused by improving the environment, thereby bringing the
technical compensation effect to the enterprise and gain the new competitive advantage
(Altman, 2001). More importantly, although the exploratory green innovation is a drastic type
of innovation, it may relatively bear greater risks. However, the new technology pursued by
the exploratory activities will put enterprises in the leading position of green technology and
formulate the green standards for the industry. The exploratory green innovation can also
make a positive difference in establishing a green image of the enterprise, forming green
barriers that make it difficult for competitors to imitate in a short period, as well as bringing
time-leading and differentiated competitive advantages to the enterprise (Lin et al., 2014).
Therefore, both exploitative green innovation and the exploratory green innovation can make
K enterprises break through the bottleneck of development and bring green competitive
51,3 advantages to enterprises. To sum up, the following assumptions are proposed:
H3. The green ambidexterity innovation plays a positive role in winning green
competitive advantages for enterprises.
H3a. The exploitative green innovation has a positive effect on the green competitive
advantage of enterprises.
1258
H3b. The exploratory green innovation has a positive effect on the green competitive
advantage enterprises.

2.5 The intermediary role of the green ambidexterity innovation

Chen et al. (2012) discovered that only internal sources such as environmental leadership and
corporate culture and capabilities can promote proactive green innovations. Top managers’
environmental awareness plays a decisive role in the choice of corporate strategy and when
the enterprise has unique, scarce and irreplaceable resources and capabilities through
innovation; it will gain a competitive advantage in the market (Barney, 1991). It is proposed
that the green innovation may play a bridge role between top managers’ environmental
awareness and green competitive advantages. According to the Neo-Schumpeterian growth
theory, the sustainable development of enterprises is driven by innovation, and the actions of
entrepreneurs can promote innovation. Green innovation has become a strategic tool to deal
with environmental challenges by coordinating the economic and environmental benefits of
enterprises (Lin et al., 2014; Albert et al., 2017). In the long run, green innovation has been
regarded as a more feasible and effective way for enterprises to reinforce green competitive
advantages (Xiao and Xiao, 2018). Due to the nature of green innovation, however, it requires
more capital investment, consumes a lot of resources and is difficult to achieve obvious profit
growth in the short term so that many enterprises will not take the initiative to implement
green innovation. As the core leaders and decision makers of the enterprises, top managers
determine the implementation of the green innovation. Top manager who has higher
environmental awareness is more willing to take the responsibility for the green innovation
and invest resources and capabilities in green innovation activities (Burki and Dahlstrom,
2017). The higher the awareness of environmental protection among managers, the more
capable they will be to explore opportunities in the environment protection activities, thus
making complex and long-term strategic plans (Albert et al., 2017). In conclusion, the
following hypotheses are proposed:
H4. Green ambidexterity innovation plays an intermediary role between top managers’
environmental awareness and green competitive advantages.
H4a. The exploitative green innovation has a mediating role between top managers’
environmental awareness of responsibility and green competitive advantages.
H4b. The exploitative green innovation has a mediating role between top managers’
environmental awareness of benefits and green competitive advantages.
H4c. The exploratory green innovation has a mediating role between top managers’
environmental awareness of responsibility and green competitive advantages.
H4d. The exploratory green innovation has a mediating role between top managers’
environmental awareness of benefits and green competitive advantages.
2.6 Moderating role of strategic flexibility
With the continuous acceleration of technological transformation in the 21st century,
strategic flexibility has become a key factor in the success of enterprises (Hitt et al., 1998).
Strategic flexibility can be simply summarized as making the organization more adaptable to Corporate
the outside (Johnson et al., 2003). It is the combination of adaptability and management green
ability. In the modern changing business environment, developing strategic flexibility is one
of the hardest yet most important functions of managers (Santos-Vijande et al., 2012; Shimizu
competitive
and Hit, 2004 and Toni and Tonchia, 2005). The level of strategy and successful use of advantage
strategic flexibility can result in better performance and make the imitation difficult for
competitors, which were confirmed in the work of Toni and Tonchia (2005). Strategic
flexibility is found in companies with a distinct competitive advantage because it provides a 1259
diversity of capabilities that may lead to new options. Also, distinct forms of strategic
flexibility in dynamic and variable environments mean the imitation is difficult for
competitors (Kashani Nik, 2012; Brozovic, 2016).
Strategic flexibility coordinates and integrates resources to develop a series of strategic
resources that are effective both for the present and the future and helps enterprises to
reinforce green competitive advantages by encouraging innovation (Su and Zhang, 2018).
With the drastic changes in the market, it is difficult for enterprises to maintain a long-term
competitive advantage only through a green innovation strategy. Green innovation has a
high degree of uncertainty, while enterprises with high strategic flexibility show greater
flexibility in responding to environmental pressures. That is, when enterprises implementing
green innovation, strategic flexibility can enable enterprises to change their strategies in a
short period and reduce the costs of adapting to environmental challenges (Lu et al., 2014). For
enterprises with high strategic flexibility, members of the organization will quickly reach a
consensus on some opinions, and their cognitive abilities are well exerted. This enables the
enterprise to have the foresight to be superior to competitors in formulating strategies and
innovation, thus developing a “quick response” capability all the time, which is of great
significance to the acquisition of competitive advantage (Boonman et al., 2015). In addition,
the green innovation is a kind of organizational revolution, and it usually encounters
obstacles in the implementation process. These obstacles are often caused by organizational
rigidity, such as resources or inertia. Only by overcoming the organizational rigidity can
enterprises’ green innovation play its role (Liu et al., 2015). In short, strategic flexibility is
similar to the booster of an enterprise, which ensures the smooth implementation of
organizational revolution. The stronger the strategic flexibility, the more the green
innovation can help enterprises to reinforce green competitive advantages. In line with
these results, the authors hypothesize that
H5. Strategic flexibility plays a moderating role between the green ambidexterity
innovation and green competitive advantages.
H5a. Strategic flexibility has a positive moderating effect between the exploitative green
innovation and green competitive advantages.
H5b. Strategic flexibility has a positive moderating effect between the exploratory green
innovation and green competitive advantages.

3. Methodology
In order to confirm the relationships presented in the theoretical model, a questionnaire
survey was chosen. Sections 3.1 and 3.2 describe the data collection and sample, variables and
measures, and more details of the data analysis.

3.1 Data collection and sample

A self-administered survey questionnaire was designed and employed to collect data on top
managers’ awareness of environmental protection, green innovation, strategic flexibility and
K sustainable competitive advantage from managers of companies in heavily polluting
51,3 industries in China. We employed simple random sampling technique as each firms has an
equal probability of being chosen.
The samples in this study are mainly from coal, chemical, steel, brewing, pharmaceutical,
metallurgy, thermal power and other in Shanxi, Shandong, Inner Mongolia and Shaanxi and
other places in China. The heavily polluting industries in these regions were selected because
most of these were facing the dual tasks of the economic transition resources type cities and
1260 ecological protection. The new development concept of China’s ecological environment in the
new era is conducive to stimulating top managers’ environmental awareness and the green
innovation activities of enterprises. In particular, enterprises in heavily polluting industries
are confronted with greater environmental protection pressure, and their senior executives
pay more attention to the green innovation and have higher enthusiasm for implementation,
which is very suitable for our research.
35 enterprises in Shanxi and 15 top managers were randomly selected for pre-investigation.
The questionnaire was revised according to the results of the trial filling and the interviews.
The formal survey was conducted from April 2017 to June 2019. During this period, two rounds
of questionnaires were conducted successively. The first survey from April to June in 2017
mainly investigated the awareness of environmental protection, green innovation and strategic
flexibility of top managers. Considering phases in the time domain and time-lag effect of
enterprises’ process of implementing green innovation strategy, reducing the impact of the
endogenous problem; this paper introduces the financial and non-financial performance lagged
one and two periods to evaluate the sustainable competitive advantage of enterprises, that is,
collecting enterprises’ data through the second survey from April to June in 2019.
Among the selected enterprises, revised questionnaires were distributed through on-site
submission (76%), mailing (7%), e-mail (8%), We Chat (9%) and so on. 687 sets of
questionnaires were distributed in pairs to the top managers group (e.g. chairman and
general managers) and the non-top managers group (e.g. department manager, head of
environment and safety affairs and employees) with the assistance of the human resources
department. We received complete questionnaire feedback from 489 senior executives and
440 non-top managers. After screening the matching degree of the previous and the latter
questionnaires, 370 sets of valid questionnaire data were obtained for subsequent research.

3.2 Questionnaires and measures

In this study, in order to represent observable variables in the theoretical model, the widely used
five-point Likert scale has been employed. Among them, one represents “strongly disagree”
and five means “strongly agree.” Originally, all observable and latent variables were developed
in English. As the survey was conducted among managers and enterprises in China, the survey
questionnaire was translated into Chinese in order to improve the level of understanding (a list
of observable constructs is given in Appendix). Related academic experts have checked the
translated version. It was ensured that no major discrepancies were caused by translation.
Besides, referring to the relevant literature on top managers’ awareness of environmental
protection, green innovation, strategic flexibility and sustainable competitive advantage,
Firstly, this paper draws on the mature scales to refine and correct the items of the tested
variables one by one and further tests them through a pre-investigation, which ensures the
scale that has good structural validity and content validity. After finalization, the survey in
Chinese was distributed among respondents.
The questionnaire consists of 42 items in five sections. The first section relates to
environmental awareness of top managers, where it contains eight pertinent questions. The
second section relates to measuring the moderator variable, green innovation, where it includes
12 items. The third section relates to the mediator variable―strategic flexibility based on seven
questions. The fourth section relates to the components of the green competitive advantage, Corporate
which consists of ten items. The last section relates to the basic information about chosen firms green
with five dimensions of age, nature, address, industry and number of staff.
SPSS23.0 was used to test the reliability of each variable. The Cronbach’s coefficient
competitive
values of the measurement scale of each variable were above 0.70, indicating good reliability. advantage
AMOS23.0 was used for confirmatory factor analysis, and the results reached the adaptation
standard, showing good structural validity. Based on the previous research, this paper takes
enterprise-scale, firm age, the industry field of the enterprise and the nature of the enterprise 1261
as control variables.
3.2.1 Dependent variable. Green competitive advantage refers to the scales used in the
study by Chen and Chang (2013) and Zameer et al. (2020), and it is comprehensively measured
from 10 items of both financial and non-financial aspects. The Cronbach’s alpha level of the
scale is 0.940, and the fitness indexes of the confirmatory factor analysis results are:
χ 2 =df 5 1.784, GFI 5 0.981, AGFI 5 0.968, NFI 5 0.971, CFI 5 1, IFI 5 1 and
RMSEA 5 0.034.
3.2.2 Independent variable. Top managers’ environmental awareness is divided into top
managers’ awareness of responsibility for environmental protection and top managers’
awareness of benefits for environmental protection. Concerning the measurement method of
Gadenne and Mckeever (2009), four items are used for measurement. The result indicates an
acceptable level of reliability for all constructs, with a Cronbach’s alpha level of 0.898 for
senior executives’ awareness of responsibility and 0.902 for top managers’ awareness of
benefits. The results of confirmatory factor analysis show that: χ 2 =df 5 1.908, GFI 5 0.896,
AGFI 5 0.95, NFI 5 0.99, CFI 5 1, IFI 5 0.984 and RMSEA 5 0.047.
This research divides the green innovation into the exploitative green innovation and the
exploratory green innovation. With reference to the research results of He and Wong (2004)
and Atuahene and Murray (2007), the implementation level of green innovation in each
dimension is measured through six questions. The result indicates an acceptable level of
reliability for all constructs, with a Cronbach’s alpha level of 0.816 for utilizing green
innovation and 0.749 for exploring green innovation. The adaptability indexes of
confirmatory factor analysis are as follows: χ 2 =df 5 1.062, GFI 5 0.98, AGFI 5 0.95,
NFI 5 0.99, CFI 5 1, IFI 5 1 and RMSEA 5 0.015.
Strategic flexibility refers to the scale used by Nadkarni and Narayanan (2007) in the
research, and it measured through seven items. The Cronbach’s alpha level is 0.829.
Confirmatory factor analysis obtains the following fitness indexes: χ 2 =df 5 1.295, GFI 5 1,
AGFI 5 0.98, NFI 5 0.97, CFI 5 0.99, IFI 5 0.99 and RMSEA 5 0.025.

4. Data analysis and results

4.1 Descriptive statistical analysis and correlation analysis of variables
This paper uses SPSS23.0 to carry out a Pearson correlation analysis on each variable; the
analysis results are shown in Table 1.
From the data in the table, it can be seen that the average value of top managers’ awareness
of responsibility for environmental protection is greater than that of top managers’ awareness
of benefits for environmental protection. This shows that the implementation of environmental
protection measures by top managers is mainly based on ethical factors at the present stage.
They regard environmental protection as a way to assume social responsibility, rather than just
considering the benefits of implementing this measure. In addition, the average value of the
exploitative green innovation is greater than the exploratory green innovation, indicating that
most enterprises are more willing to innovate with currently mature technologies and
capabilities than exploring new fields and new technologies. In terms of the correlation
coefficient, all of our construct measures achieved the minimum criterion of 0.50 or higher for
K average variance extracted, which indicates validity for a construct’s measure. Thus, there is an
51,3 obvious correlation between the variables, which shows that these variables are related and
interacted with each other.

4.2 The influence of top managers’ environmental awareness on green competitive

advantages
1262 Taking the green competitive advantage of the enterprise as the dependent variable and top
managers’ environmental awareness as the independent variable, the regression analysis is
carried out by SPSS23.0. As displayed in Table 2, model 1 is a baseline model to test the
influence of control variables on the dependent variables. Model 2 and model 3 adds top
managers’ awareness of responsibility and awareness of benefits for the environmental
protection separately on the basis of model 1.
The result shows that compared to model 1, Adj R2 of model 2 becomes 0.305 after adding
top managers’ awareness of responsibility for environmental protection, while Adj R2 of
model 3 becomes 0.367 after adding top managers’ awareness of benefits for environmental
protection, which shows that top managers’ environmental awareness has a causal
relationship with sustainable competitive advantage to a certain degree. In addition, top

Average Standard
Variables indexes deviation 1 2 3 4 5 6

Environmental 4.129 0.855 1

awareness of
responsibility
Environmental 3.923 0.948 0.804** 1
awareness of benefits
The exploitative 4.019 0.728 0.329** 0.292** 1
green innovation
The exploratory 3.710 0.654 0.372** 0.416** 0.480** 1
green innovation
Table 1. Strategic flexibility 3.648 0.619 0.273** 0.114* 0.199* 0.123* 1
The correlation Green competitive 3.804 0.780 0.551** 0.599** 0.305** 0.518** 0.238** 1
coefficients between advantages
variables Note(s): *p < 0.05, **p < 0.01

The green competitive advantage of enterprises

Variables Model 1 Model 2 Model 3

Control variables
The nature of enterprise 0.065 0.041 0.069
The industry field of the enterprise 0.024 0.041 0.027
Duration of the enterprise 0.045 0.037 0.052
Enterprise scale 0.109 0.078 0.093*
Table 2. Independent variables
Regression analysis of Environmental awareness of responsibility 0.546***
the effect of top Environmental awareness of benefits 0.598***
managers’ F statistics 0.671 33.393*** 43.738***
environmental R2 0.018 0.314 0.375
awareness on green Adj R2 0.007 0.305 0.367
competitive
advantages Note(s): *p < 0.05, **p < 0.01, ***p < 0.001
managers’ awareness of responsibility for environmental protection (β 5 0.546, p < 0.001) and Corporate
top managers’ awareness of benefits for environmental protection (β 5 0.598, p < 0.001) are green
both significantly positively correlated with a competitive advantage. Therefore, H1a and
H1b are supported.
competitive
advantage
4.3 The influence of top managers’ environmental awareness on the green ambidexterity
innovation 1263
Taking the green innovation of enterprises as the explained variable and the environmental
protection awareness of senior executives as the explaining variable, SPSS23.0 was employed
for regression analysis. Table 3 shows the analysis results. According to the value of Adj R2,
model 5 and model 6 are larger than model 4, which indicates the validity of the two models. In
addition, model 5 shows that there is a significant positive correlation between top managers’
awareness of responsibility for environmental protection and the exploitative green
innovation (β 5 0.323, p < 0.001). Model 6 shows that there is also a significant positive
correlation between top managers’ awareness of benefits for environmental protection and
the exploitative green innovation (β 5 0.288, p < 0.001). Therefore, the hypotheses proposed
by H2a and H2b are supported. Similarly, the values of Adj R2 in model 8 and model 9 both
increase compared to model 7, which shows that the regression model of top managers’
environmental awareness and exploratory green innovation are a perfect fit for the data. In
addition, top managers’ awareness of responsibility for environmental protection has a
significant positive effect on the exploratory green innovation (β 5 0.369, p < 0.001), and H2c
is supported. Top managers’ awareness of benefits for environmental protection also has a
positive effect on the exploratory green innovation, but the results are not significant
(β 5 0.101, p > 0.01), H2d is not empirically supported.

4.4 The impact of the green ambidexterity innovation on green competitive advantages
Table 4 shows the regression results between the green innovation and competitive
advantage. From the data of model 10 and model 11 in the table, it can be concluded that both
the exploitative green innovation (β 5 0.301, p < 0.001) and the exploratory green innovation

The exploitative green innovation The exploratory green innovation

Variables Model 4 Model 5 Model 6 Model 7 Model 8 Model 9

Control variables
The nature of enterprise 0.056 0.042 0.058 0.017 0.033 0.014
The industry field of the 0.018 0.008 0.017 0.020 0.031 0.022
enterprise
Duration of enterprise 0.109** 0.114* 0.105* 0.057 0.063 0.052
Enterprise-scale 0.199*** 0.181** 0.192*** 0.188* 0.167** 0.177**
Independent variables
Environmental awareness of 0.323*** 0.369***
responsibility Table 3.
Environmental awareness of 0.288*** 0.101 Regression analysis
on the effect of top
benefits managers’
F-statistics 3.468** 11.901*** 9.891*** 3.377* 15.002*** 8.705*** environmental
R2 0.037 0.141 0.120 0.036 0.171 0.104 awareness on the green
Adj R2 0.026 0.129 0.108 0.025 0.159 0.093 ambidexterity
Note(s): *p < 0.05, **p < 0.01, ***p < 0.001 innovation
K Green competitive advantage
51,3 Variables Model 1 Model 10 Model 11

Control variables
The nature of enterprise 0.065 0.048 0.074
The industry field of the enterprise 0.024 0.030 0.014
Duration of the enterprise 0.045 0.078 0.075
1264 Enterprise-scale 0.109 0.049 0.011
Independent variables
Table 4. The exploitative green innovation 0.301***
Regression analysis of
The exploratory green innovation 0.521***
the influence of the
green ambidexterity F-statistics 0.671 8.566*** 28.282***
innovation on green R2 0.018 0.105 0.280
competitive Adj R2 0.007 0.093 0.270
advantages Note(s): *p < 0.05, **p < 0.01, ***p < 0.001

(β 5 0.521, p < 0.001) have positive effects on obtaining green competitive advantages for
enterprises, and H3a and H3b are verified.

4.5 Test of the intermediary role of the green ambidexterity innovation

The intermediary role of the green innovation is verified by constructing models 12, 13 and
14, as shown in Table 5. Model 12 shows that the value of Adj R2 increases from 0.305 to 0.319,
so the fitting effect of this model is more ideal. When both top managers’ awareness of
responsibility for environmental protection and the exploitative green innovation are
considered, the influence of top managers’ awareness of responsibility for environmental
protection on the green competitive advantage is still positive and significant (β 5 0.503,
p < 0.001). However, the decrease of the standard coefficient indicates that the exploitative
green innovation partially mediates the relationship between them. Similarly, As depicted in
model 13, when considering top managers’ awareness of responsibility for environmental
protection and the exploratory green innovation at the same time, the relationship between
top managers’ awareness of responsibility for environmental protection and the green
competitive advantage (β 5 0.412, p < 0.001) is still positive and significant. The coefficient
decrease indicates that the exploratory green innovation has a partly intermediate function
between the top manager’s environmental awareness and green competitive advantages.
Therefore, H4a and H4c are supported. Additionally, it has been proved that there is no
significant relationship between top managers’ awareness of benefits for environmental
protection and the exploratory green innovation. Therefore, it is not necessary to conduct an
intermediary test on it to prove the intermediary role of the exploratory green innovation
between top managers’ awareness of benefits for environmental protection and green
competitive advantages. With a higher value of Adj R2 compared to model 2, the fitting effect
of model 14 is better after the term of exploitative green innovation is added. When
considering top managers’ awareness of benefits for environmental protection and the
exploitative green innovation at the same time, it is found that top managers’ awareness of
benefits for environmental protection still has a significant impact on green competitive
advantages (β 5 0.559, p < 0.001), indicating the mediating effect of the exploitative green
innovation. Therefore, H4b is supported.

4.6 Test of the moderating role of strategic flexibility

Models 15 to 18 pertain to the test results for H5a and H5b, which introduces the moderator to
analyze the moderating effect of strategic flexibility on the relationship between the green
 Green competitive advantage
Corporate
Variables Model 2 Model 12 Model 13 Model 14 green
competitive
Control variables
The nature of enterprise 0.041 0.036 0.053 0.061 advantage
The industry field of the enterprise 0.041 0.042 0.030 0.029
Duration of the enterprise 0.037 0.052 0.060 0.066
Enterprise-scale 0.078 0.054 0.017 0.067 1265
Independent variables
Top managers’ environmental awareness of 0.546*** 0.503*** 0.412***
responsibility Table 5.
Top managers’ environmental awareness of benefits 0.559*** Test of the
Mediator variables intermediary role of the
The exploitative green innovation 0.133** 0.134** green ambidexterity
innovation between top
The exploratory green innovation 0.365***
managers’
F-statistics 33.393*** 29.764*** 44.654*** 38.862*** environmental
R2 0.314 0.330 0.425 0.391 awareness and green
Adj R2 0.305 0.319 0.415 0.381 competitive
Note(s): *p < 0.05, **p < 0.01, ***p < 0.001 advantages

innovation and green competitive advantage. Table 6 reveals that the regression coefficient
of the exploitative green innovation on green competitive advantage is 0.301 (p < 0.001), so
the exploitative green innovation can significantly promote the acquisition of green
competitive advantages. After adding the term of strategic flexibility and the interaction
item, the regression coefficients are both significant (β 5 0.204, p < 0.001 for the strategic
flexibility; β 5 0.109, p < 0.05 for the interaction between the strategic flexibility and the
exploitative green innovation). Thus, H5a is supported. Moreover, from the perspective of the

Green competitive advantage

Variables Model 10 Model 15 Model 16 Model 17 Model 18

Control variables
The nature of enterprise 0.048 0.031 0.030 0.058
The industry field of the enterprise 0.030 0.025 0.028 0.010
Duration of the enterprise 0.078 0.075 0.074 0.073
Enterprise-scale 0.049 0.042 0.039 0.006
Independent variables
The exploitative green innovation 0.301*** 0.282*** 0.298***
The exploratory green innovation 0.500*** 0.502***
Moderator variable
Strategic flexibility 0.204*** 0.202*** 0.170*** 0.169***
Interaction effect
The exploitative green innovation * 0.109*
Strategic flexibility
The exploratory green innovation * 0.096* Table 6.
Test of the moderating
Strategic flexibility role of strategic
F-statistics 8.566*** 10.365*** 9.103*** 26.941*** 24.034*** flexibility between the
R2 0.105 0.146 0.150 0.308 0.317 exploitative green
Adj R2 0.093 0.132 0.133 0.297 0.304 innovation and green
Note(s): *p < 0.05, **p < 0.01, ***p < 0.001 competitive advantage
K impact on green competitive advantages, compared with model 15, Adj R2 value in model 16
51,3 increased from 0.132 to 0.133, which further strengthens the interpretability of the model. The
exploratory green innovation is significant at p < 0.001 in model 11, which indicates that it
has a significant impact on gaining green competitive advantages for enterprises. After
introducing the item of strategic flexibility, the regression coefficient becomes 0.170, and the
influence of the exploratory green innovation on green competitive advantages is still
significant. When the interaction item is added, the value of the interaction item becomes
1266 0.096, which is still significant. As a result, H5b is also supported.
To analyze the influence of the strategic flexibility on the relationship between the
green innovation and green competitive advantage, the paper divides the samples into two
groups (including enterprises with high strategic flexibility and enterprises with low strategic
flexibility) to conduct a simple slope test. EGI1 represents the exploitative green innovation, and
EGI2 represents the exploratory green innovation. The results show that among enterprises
with high or low strategic flexibility, the exploitative green innovation and the exploratory
green innovation have significant effects on the green competitive advantage of enterprises,
respectively. The influence of the exploitative green innovation and the exploratory green
innovation on enterprises’ green competitive advantages under the different levels of strategic
flexibility is shown in Figure 2.
All the above results show that two of the 18 hypotheses were not supported. A summary
of the results for tested hypotheses appears below in Table 7.

5. Conclusions and implications

5.1 Research conclusions
From the perspective of upper echelons theory, this paper discusses the influence of top
managers’ environmental awareness on the green competitive advantage of enterprises and
also explores the mediating effect of the green innovation and the adjustment mechanism of
strategic flexibility. The empirical test of data from enterprises in heavily polluting industries
in China has succeeded in proving the existence of a relationship between environmental
consciousness and the green ambidexterity innovation—the exploitative green innovation
and the exploratory green innovation—which, in turn, is related to corporate green
competitive advantages.

Low SF High SF Low SF High SF

GCA

GCA

Figure 2.
Moderating effect of
strategic flexibility on
the relationship
between the green
innovation and green Low GEI1 High GEI1 Low GEI2 High GEI2
competitive advantage
Propositions Result
Corporate
green
H1: Top managers’ environmental awareness has a positive effect on green competitive Support competitive
advantages
H1a: Top managers’ awareness of responsibility for environmental protection has a positive Support advantage
effect on the sustainable green advantage in the enterprise
H1b: Top managers’ awareness of benefits for environmental protection has a positive effect on Support
the sustainable green advantage in the enterprise 1267
H2: Top managers’ environmental awareness has a positive effect on the green ambidexterity Support
innovation
H2a: Top managers’ environmental awareness of responsibility plays a positive role in the Support
exploitative green innovation
H2b: Top managers’ environmental awareness of benefits plays a positive role in the exploitative Support
green innovation
H2c: Top managers’ environmental awareness of responsibility plays a positive role in the Support
exploratory green innovation
H2d: Top managers’ environmental awareness of benefits plays a positive role in the exploratory No
green innovation support
H3: Green ambidexterity innovation plays a positive role in winning green competitive Support
advantages for enterprises
H3a: The exploitative green innovation has a positive effect on the green competitive advantage Support
of enterprises
H3b: The exploratory green innovation has a positive effect on the green competitive advantage Support
enterprises
H4: Green ambidexterity innovation plays an intermediary role between top managers’ Support
environmental awareness and green competitive advantages
H4a: The exploitative green innovation has a mediating role between top managers’ Support
environmental awareness of responsibility and green competitive advantages
H4b: The exploitative green innovation has a mediating role between top managers’ Support
environmental awareness of benefits and green competitive advantages
H4c: The exploratory green innovation has a mediating role between top managers’ Support
environmental awareness of responsibility and green competitive advantages
H4d: The exploratory green innovation has a mediating role between top managers’ No
environmental awareness of benefits and green competitive advantages support
H5: Strategic flexibility plays a moderating role between the green ambidexterity innovation and Support
green competitive advantage
H5a: Strategic flexibility has a positive moderating effect between the exploitative green Support
innovation and green competitive advantage Table 7.
H5b: Strategic flexibility has a positive moderating effect between the exploratory green Support Summary of results for
innovation and green competitive advantage tested propositions

(1) This paper found that environmental consciousness has a significant positive
relationship with a competitive advantage, which supports (Egri and Herman, 2000)
who state that top managers with a strong environmental awareness are more likely
to perceive the potential benefits and risks brought by the environmental protection
activities and try to cooperate with government, suppliers, shareholders or other
stakeholders to share the risks; all of these will lead to the competitive advantage.
However, different from the existing literature, this paper divides environmental
awareness into two dimensions awareness of responsibility for environmental
protection and awareness of benefits for environmental protection. Top managers’
awareness of responsibility for environmental protection and top managers’
awareness of benefits for environmental protection both have a significant positive
impact on the green competitive advantage of enterprises, but the impact of top
managers’ awareness of benefits for environmental protection is greater. The reason
K for this may be that China’s increasing emphasis on environmental protection has
51,3 resulted in stricter penalties for companies that ruin the environment. Under the
circumstances, the senior management of Chinese enterprises, out of the company’s
benefit, will take environmental protection activities actively to surpass their
competitors and gain a competitive advantage.
(2) Most previous studies confirmed the existence of a significant positive relationship
1268 between top managers’ environmental consciousness and green innovation of
enterprises. For example, Greeno and Robinson (1992) found that a top manager who
has a high level of environmental consciousness will increase the company’s ability to
green innovation related to environmental protection, which is similar to the H2
hypothesis. However, these studies often regard green innovation as a whole and ignore
its inherent complexity. In order to generate a nuanced view of the firms’ innovation
activities, this paper divides the corporate green innovation into the exploitative
green innovation and the exploratory green innovation. Different dimensions of
environmental awareness will have different influences on different types of
corporate green innovation activities. Top managers’ awareness of responsibility for
environmental protection and top managers’ awareness of benefits for environmental
protection have positive effects on the exploitative green innovation. Top managers’
awareness of responsibility for environmental protection is helpful for enterprises to
conduct the exploratory green innovation, whereas top managers’ awareness of benefits
for environmental protection has no significant influence on the exploratory green
innovation. The exploratory innovation is a typical high-risk activity with large
investments and uncertain benefits, so top managers with a high awareness of benefits
for environmental protection will not give priority to it for short-term interest. So, the
results that top management with a high awareness of the environment is more willing
to engage in the green innovation and invest resources and capabilities into it (Cao and
Chen, 2019) are not complete.
(3) The support for the H3 hypothesis, which states that the performance of the green
innovation is positively correlated to the enterprises’ competitive advantage, is in
accordance with the findings (Chen et al., 2006). Two different types of green
innovation—the exploitative green innovation and the exploratory green
innovation—both have a positive effect on obtaining green competitive advantages
for enterprises, the finding prove the arguments of (Porter et al., 1995a, b), who state
that the green innovation helps enterprises identify opportunities that inside and
outside the organization, improve productivity and profits and then gain a competitive
advantage. But there is one difference in the paper that the exploratory green
innovation has a greater impact on the corporate competitive advantage. The possible
reason is that the exploratory green innovation requires enterprises to invest more
human resources, material resources and financial resources to achieve the integration
of these resources with corporate capabilities to develop new fields and create
completely new knowledge. This innovation process is difficult to be imitated by
competitors, through which companies can easily gain a competitive advantage. In
practice, the exploratory green innovation is more likely to help enterprise gain a long-
term competitive advantage.
(4) Most research mainly focuses on the regulatory effect of environmental protection
awareness of top managers, which rarely involves the mechanism process between
environmental protection awareness of senior executives and enterprises’ green
competitive advantage (Xu et al., 2017; Zhang et al., 2015; Peng and Wei, 2015). In this
study, we found that the green innovation plays a partial mediating role between top
 managers’ environmental awareness and green competitive advantage. In conclusion, Corporate
top managers’ environmental awareness affects corporate competitive advantage green
in two ways. On the one hand, environmental awareness can guide top managers to
correctly cognitive the internal and external environment, formulate green
competitive
development strategy and properly allocate corporate resources and capabilities on advantage
the strategy. All the measures directly help enterprise gain a competitive advantage.
On the other hand, top managers with higher environmental awareness are more
willing to participate in the green innovation activities because they can see the 1269
potential profits behind them. Through the green innovation, companies can develop
new products or serve to gain new consumers and markets, increase productivity and
then gain a competitive advantage, where environmental awareness impacts the
competitive advantage indirectly.
(5) Hypothesis H5 states that strategic flexibility has a positive regulatory effect on the
relationship between the green ambidexterity innovation and green competitive
advantage. This finding is similar to Liu et al. (2015), who found that through strategic
flexibility, we need to overcome the organization rigidity that can help green innovation
play its role in gaining a competitive advantage for enterprises. Therefore, strategic
flexibility is a special ability to cope with changes, making the time for competitors to
imitate and copy the green innovation of enterprises longer, which is conducive to
prolonging the corporate competitive advantage.

5.2 Theoretical contributions

Firstly, existing studies have proposed that the top manager’s environmental awareness has
a positive effect on the corporate green innovation, but this research mainly focuses on
the regulatory effect of environmental awareness of top managers and rarely involves the
research in the influencing mechanism of the top manager’s environmental awareness on the
corporate competitive advantage (Xu et al., 2017; Zhang et al., 2015; Peng and Wei, 2015).
Based on the upper echelons theory, this article reveals that top managers’ environmental
awareness is an important antecedent variable of the green competitive advantage of
enterprises. Examination data from heavily polluting enterprises in China confirms that top
managers’ environmental awareness has a significant positive effect on green competitive
advantages of enterprises. Companies that place environmental awareness of top managers
as important to the organization observe environmental regulations, deal with environmental
issues actively and allocate company resources properly in order to obtain a green competitive
advantage. One of the important contributions this study makes to provide an understanding
for heavily polluting manufacturing company managers about the role of environmental
awareness to gain a competitive advantage over their competitors. This also showed that
environmental awareness is an important criterion for selecting managers in the green
development enterprises. The findings enriched the relevant literature on the relationship
between top managers’ environmental awareness and green competitive advantages.
Secondly, this study found that the green ambidexterity innovation plays an intermediary
role in the influence of top managers’ environmental awareness on the green competitive
advantage of the enterprise. Based on the ambidexterity theory, the paper divides green
innovation into the dynamic evolutionary process of the exploitative innovation and the
exploratory innovation. Previous research studied the antecedent variables of the green
innovation mainly from internal and external factors. Internal factors include corporate
strategy (Menguc et al., 2010), corporate culture (Chen, 2008a, b) and the resources and
capabilities of corporate (Horbach et al., 2011). External factors include institutional pressure
(Delmas, 2002), pressure from stakeholders (Dacin et al., 2002). The paper regards top
managers’ environmental awareness as the antecedent variable of the ambidexterity green
K innovation. Top managers can effectively allocate resource in the exploitative green
51,3 innovation and the exploratory green innovation, reasonably balance the paradox of the
exploitative and the exploratory activities, which enable the enterprise to pursue the high-
level interaction of these two innovations at the same time and then gain a green competitive
advantage. Through introducing the green ambidexterity innovation and exploring the
influence mechanism of it on corporate green competitive advantages by using empirical
research methods, the paper finds a new way—stimulating the green innovation activities
1270 by improving the environmental awareness of senior executives—to gain green competitive
advantages for enterprises, which further develops the theory of green competitive
advantages.
Finally, focusing on the context of ecological civilization construction in China and
strategic management of the enterprise, taking strategic flexibility as a regulatory variable to
explore how strategic flexibility affects the relationship between the green innovation and
green competitive advantage of enterprises. The previous studies indicate strategic flexibility
as a regulating mechanism for the interaction between enterprises and the environment
(Yao and Zhang, 2019). Different from existing research, this paper analyzes the moderating
effect of strategic flexibility on the relationship between the green innovation and green
competitive advantage of enterprises, which further explores the boundary mechanism of the
process of top managers’ environmental awareness influencing corporate green competitive
advantage through green ambidexterity innovation. The results of the paper prove that
strategic flexibility plays an important role in the transformation of green innovation
activities into green competitive advantages within enterprises, which can promote the
development of the theory of innovation and competitive advantage.

5.3 Practical implications

Firstly, enterprises should attach great importance to the cultivation of top managers’
environmental awareness. With the global environmental crisis and sustainable development
trend, an enterprise’s attitude to the environment determines the future development of it to
some extent. Therefore, as for enterprises, it is necessary to create a green atmosphere, which
can be achieved by raising the environmental protection awareness of senior executives. At
the same time, top managers’ environmental awareness comes from their responsibility can
be more helpful for enterprises to carry out green innovation activities and ultimately gain a
competitive advantage. Through training, lectures, new media platforms and other means to
cultivate top managers’ awareness of responsibility for environmental protection, guide
senior executives need to pay more attention to the demands of stakeholders such as
communities and public welfare organizations. Top managers with high environmental
awareness will take environmental issues such as corporate responsibility and commitments
and try to use new technologies continuously and explore new fields to conduct the
ambidexterity green innovation, which helps enterprises to gain competitive advantages.
Secondly, enterprises should actively carry out ambidexterity green innovation
activities. In the process of development, enterprises need to turn the green conception
into their development strategy and actively carry out different types of green innovation.
Producing green products that meet the expectations and needs of consumers at different
levels through the exploitative green innovation and the exploratory green innovation can
help enterprises expand market share and maintain the market position. In terms of driving
the green innovation, in addition to the influence of policy factors, enterprises should also
pay more attention to the influence from individual factors, such as the support and
environmental consciousness of top managers, which has a positive effect on the
development of enterprises’ green innovation. It should be pointed out that if enterprises
want to implement more exploitative green innovation, they should focus on top managers’
awareness of responsibility for environmental protection and top managers’ awareness of Corporate
benefits for environmental protection at the same time. However, if you want to conduct green
more risk-based exploratory green innovation, you should assign more tasks to top
managers with former environmental awareness. Although both types of green innovation
competitive
can promote enterprises to obtain green competitive advantages, the exploratory green advantage
innovation can have a larger part to play in this respect. Therefore, when an enterprise has
sufficient resources and capabilities to conduct both the exploitative green innovation and
the exploratory green innovation, it may be better to try to adopt the exploratory green 1271
innovation strategy with groundbreaking features.
Finally, enterprises should improve their strategic flexibility. In terms of improving
strategic flexibility, enterprises should try their best to reduce complicated working
procedures and create a friendly working atmosphere. At the same time, they should avoid a
cumbersome and centralized hierarchy to make the organizational structure more flexible.
Besides, enterprises should also build and diversify the communication channels of the
organization so that employees can express their opinions freely and promise the
communication in the organization has to be a two-way street in order to ensure good
communication between top managers and employees. Strategic flexibility emphasizes the
ability to integrate and allocate resources among different units. Enterprises should pay
attention to the cultivation of this ability, for example, how to share the same resource
throughout the organization and how to minimize the cost when the same resource is
converted. To sum up, enterprises should improve strategic flexibility in many ways so that
they can better obtain a sustainable competitive advantage.

5.4 Limitations and future research

Firstly, the paper mainly selects the data from heavily polluting enterprises in Shanxi,
Shandong and Inner Mongolia in China. In fact, green development is the main direction of the
sustainable development of the global economy and society in the future. Therefore, green
innovation and green competitive advantages of enterprises are the problems that all
enterprises are facing now, and follow-up research will expand the sample scale and conduct
dynamic research continuously. Secondly, the positive relationship between top managers’
awareness of benefits for environmental protection and the exploratory green innovation has
not been verified, which may be due to the size of the sample or some intermediate variable
between them still needs to be studied further.

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(The Appendix follows overleaf)

K Appendix
51,3
Part 1: Environmental awareness of corporate executives (Please select the appropriate
number according to the actual situation of your company)

1276 Environmental awareness of Strongly Strongly

Number corporate executives disagree Disagree Uncertain Agree agree

1 Executives attach great importance 1 2 3 4 5

to the negative influence of the
natural environment
2 Corporate executives are well aware 1 2 3 4 5
of the impact of environmental
regulations on their companies
3 Corporate executives are clear 1 2 3 4 5
about the best environmental
practices in their industry
4 Corporate executives attach great 1 2 3 4 5
importance to environmental
protection
5 Corporate executives know the 1 2 3 4 5
benefits of environmental initiative
6 Corporate executives believe that 1 2 3 4 5
the production of environmental
protection products will increase
sales revenue
7 Corporate executives believe that 1 2 3 4 5
environmental protection measures
will reduce costs
8 Corporate executives believe that 1 2 3 4 5
environmental protection measures
will improve production efficiency

Part 2: Green innovation (Please select the appropriate number according to the actual
situation of your company)

Strongly Strongly
Number Green innovation disagree Disagree Uncertain Agree agree

1 Enterprises would like to provide 1 2 3 4 5

customers with the existing green
products and services
2 Enterprises actively introduce 1 2 3 4 5
improved green products and
services in the existing market
3 Enterprises attach importance to 1 2 3 4 5
the improvement of green products
and services in the current market
4 Enterprises regularly collect green 1 2 3 4 5
innovation information in order to
provide more services to customers

(continued )
 Strongly Strongly
Corporate
Number Green innovation disagree Disagree Uncertain Agree agree green
competitive
5 Enterprise development and use 1 2 3 4 5
the existing market as much as advantage
possible
6 Enterprises try to use existing 1 2 3 4 5
advantage to reduce the cost 1277
7 Enterprises are willing to promote 1 2 3 4 5
new green products and services
8 Enterprises will actively grasp the 1 2 3 4 5
new opportunities in the new green
product market
9 Enterprises are willing to tap new 1 2 3 4 5
customers for green products and
services
10 Enterprises believe customers want 1 2 3 4 5
new, green products and services
11 Enterprises are willing to develop 1 2 3 4 5
new sales channels for green
products and services
12 Enterprises develop new green 1 2 3 4 5
products and services continually

Part 3: Strategic flexibility (Please select the appropriate number according to the actual
situation of your company)

Strongly Strongly
Number Strategic flexibility disagree Disagree Uncertain Agree agree

1 The same resource can be shared 1 2 3 4 5

between different departments
2 The same resource can be used to 1 2 3 4 5
develop, produce, and sell different
products and services
3 There is little cost and difficulty in 1 2 3 4 5
converting the same resource to
another use
4 It takes very little time for 1 2 3 4 5
conversion purposes of the same
resource
5 Departments are allowed to break 1 2 3 4 5
formal rules to keep work more
flexible
6 The internal communication 1 2 3 4 5
channels and mechanisms of the
enterprise are very smooth
7 Enterprises can actively respond to 1 2 3 4 5
external competition and react
quickly
K Part 4: Green competitive advantage (Please select the appropriate number according to
the actual situation of your company)
51,3

Strongly Strongly
Number Green competitive advantage disagree Disagree Uncertain Agree agree

1278 1 Green products and services enable 1 2 3 4 5

enterprises to maintain a high sales
growth rate over a long period of
time
2 Green products and services enable 1 2 3 4 5
companies to maintain higher profit
margins over time
3 The market share of enterprises’ 1 2 3 4 5
green products and services is
relatively high
4 Customers have a high degree of 1 2 3 4 5
satisfaction with the green products
and services provided by the
enterprise
5 Customers have high loyalty to 1 2 3 4 5
green products and services and
will recommend others to buy them
6 The environmental behavior of the 1 2 3 4 5
enterprise enhances the loyalty of
the employees
7 Enterprises can continuously 1 2 3 4 5
update green innovation
knowledge, so that the green
innovation ability is better than
competitors in the same industry
8 Enterprises and suppliers to 1 2 3 4 5
establish a long-term good green
cooperative relationship
9 Investors highly value the 1 2 3 4 5
company’s environmental behavior
and are willing to continue to invest
10 The community in which the 1 2 3 4 5
company operates praised the
company for its environmental
behavior

Part 5: Basic information of the company (please fill in and select according to the actual
situation of your company)
(1) The address of your company: ___________________
(2) The nature of your company:
(1) state-owned enterprises, (2) private enterprises and (3) other types
(3) The industry your company is in
(1) Manufacturing of computer, communication and other electronic equipment
(2) Electrical machinery, instrument and meter manufacturing
(3) Pharmaceutical, chemical raw materials and chemical products manufacturing
 (4) Petroleum processing, coking, rubber and plastic manufacturing Corporate
(5) Intelligent equipment and machine manufacturing green
(6) Other manufacturing industries
competitive
advantage
(4) Duration of your company:
(1) 0–3 years, (2) 4–6 years (3) 7–10 years and (4) others
(5) The number of employees at your company
1279
(1) 0–100, (2) 101–300, (3) 301–500, (4) 501–1,000 and (5) more than 1,000

Corresponding author
Yue Zhang can be contacted at: 2893291801@qq.com

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