Green Innovation Strategy as Antecedent of Performance Sustainability among ISO 14001-Certified Manufacturing Firms in Kenya: Does Regulatory Framework Play a Moderating Role?

Performance sustainability has been a major concern in the manufacturing sector in Kenya. Most firms have recorded a dwindling performance: a decline in profits, an increase in environmental crisis and unmanaged waste. Firms in the manufacturing sector have been on the move to get ISO 14001 certification, which is perceived as critical as firms go green. It is, however, noted that despite the regulatory framework and increased ISO 14001 certification, sustainability challenges are still high. This study aimed to establish whether the regulatory framework had a moderating effect on the relationship between green innovation strategy and performance sustainability of ISO 14001-certified manufacturing firms in Kenya. The scholar operationalized a green innovation strategy using green products, green processes, green marketing and green organizational innovation strategy. The regulatory framework was operationalized using environmental regulations, clean technologies regulations and NEMA regulations, while performance sustainability was operationalized using financial, social and environmental performance. The study was anchored on triple bottom line theory, green business model innovation, and institutional and stakeholders' theory. The study adopted a positivism philosophy where descriptive and explanatory research design was adopted. A Census of all 60 ISO 14001-certified manufacturing firms in Kenya was conducted involving 218 respondents. Primary data was collected using semi-structured self-administered questionnaires and analysed using a multiple regression model. The study findings indicated that regulatory framework had a significant negative moderating effect on the relationship between green innovation strategy and performance sustainability of ISO 14001-certified manufacturing firms. The study recommended that the government should come up with a flexible regulatory framework that will encourage firms to adopt green innovation. It was further recommended that management should come up with an internal policy and train its staff so that it may improve their compliance, leading to the performance sustainability of the firms.