The environmental literature has focused on examining how firms leverage environmental innovation to convert environmental challenges into driving forces of competitive advantage. This paper enhances the knowledge on the implementation of environmental strategies in the Malaysian manufacturing industry by examining the impacts of environmental shared vision and environmental strategic focus on competitive advantage in the greening of the industry. The Smart PLS technique was used to analyse data collected from 124 Malaysian manufacturing firms on their environmental strategies as well as their implications for competitive advantage and environmental innovation. The findings suggest that environmental innovation mediates the positive exchange between firms’ environmental strategies and competitive advantage. The study provides valuable information for manufacturers in crafting their corporate competitive strategies, policies, and action plans. The direct and indirect roles of environmental innovation in fostering competitive advantage suggest that manufacturers should prioritise their environmental activities by enhancing innovation outcomes to achieve a successful green business status.

• Ambec, S., Cohen, M. A., Elgie, S., & Lanoie, P. (2013). The porter hypothesis at 20: Can environmental regulation enhance innovation and competitiveness? Review of Environmental Economics and Policy, 7(1), 2-22.

• Ambec, S., & Lanoie, P. (2008). Does it pay to be green? A systematic overview. Academy of Management Perspectives, 22(4), 45-62. https://doi.org/10.5465/amp.2008.35590353

• Aragón-correa, J. A., Hurtado-Torres, N. E., Sharma, S., & García-Morales, V. J. (2008). Environmental strategy and performance in small firms: A resource-based perspective. Journal of Environmental Management, 86(1), 88-103. https://doi.org/10.1016/j.jenvman.2006.11.022

• Armbruster, H., Bikfalvi, A., Kinkel, S., & Lay, G. (2008). Organizational innovation: The challenge of measuring non-technical innovation in large-scale surveys. Technovation, 28(10), 644-657. https://doi.org/10.1016/j.technovation.2008.03.003

• Arundel, A., & Kemp, R. (2009). Measuring eco-innovation. UNU-Merit. http://collections.unu.edu/eserv/UNU:324/wp2009-017.pdf

• Banerjee, S. B. (2002). Corporate environmentalism: The construct and its measurement. Journal of Business Research, 55(3), 177-191.

• Banerjee, S. B., Iyer, E. S., & Kashyap, R. K. (2003). Corporate environmentalism: Antecedents and influence of industry type. Journal of Marketing, 67(2), 106-122. https://doi.org/10.1509/jmkg.67.2.106.18604

• Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. https://doi.org/10.1177/014920639101700108

• Barney, J. B. (2001). Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Journal of Management, 27(6), 643-650. https://doi.org/10.1177/014920630102700602

• Bradley, W., & Henseler, J. (2007, December 3-5). Modeling reflective higher-order constructs using three approaches with PLS path modeling: A Monte Carlo comparison. ANZMAC 2007: Reputation, Responsibility, Relevance, Dunedin, New Zealand

• Buysse, K., & Verbeke, A. (2003). Proactive environmental strategies: A stakeholder management perspective. Strategic Management Journal, 24(5), 453-470. https://doi.org/10.1002/smj.299

• Camisón-Zornoza, C., Lapiedra-Alcamí, R., Segarra-Ciprés, M., & Boronat-Navarro, M. (2004). A meta-analysis of innovation and organizational size. Organization Studies, 25(3), 331-361. https://doi.org/10.1177/0170840604040039

• Chang, C.-H. (2011). The influence of corporate environmental ethics on competitive advantage: The mediation role of green innovation. Journal of Business Ethics, 104(3), 361-370. https://doi.org/10.1007/s10551-011-0914-x

• Chen, Y. S. (2008). The driver of green innovation and green image – Green core competence. Journal of Business Ethics, 81(3), 531-543. https://doi.org/10.1007/s10551-007-9522-1

• Chen, Y. S., Chang, C.-H., Yeh, S.-L., & Cheng, H. I. (2015). Green shared vision and green creativity: The mediation roles of green mindfulness and green self-efficacy. Quality & Quantity, 49(5), 1169-1184. https://doi.org/10.1007/s11135-014-0041-8

• Chen, Y. S., Lai, S. B., & Wen, C. T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67(4), 331-339. https://doi.org/10.1007/s10551-006-9025-5

• Cheng, C. C., & Shiu, E. C. (2012). Validation of a proposed instrument for measuring eco-innovation: An implementation perspective. Technovation, 32(6), 329-344. https://doi.org/10.1016/j.technovation.2012.02.001

• Cheng, C. C., Yang, C.-l., & Sheu, C. (2014). The link between eco-innovation and business performance: A Taiwanese industry context. Journal of Cleaner Production, 64, 81-90. https://doi.org/10.1016/j.jclepro.2013.09.050

• Chin, W. W. (1998). Issues and opinion on structural equation modeling. MIS Quarterly, 22(1), vii-xvi.

• Chin, W. W. (2010). How to write and report PLS analysis. In V. V. Esposito, W. W. Chin, J. Henseler & H. Wang (Eds.), Handbook of partial least squares: Concepts, methods and applications. Springer.

• Chiou, T.-Y., Chan, H. K., Lettice, F., & Chung, S. H. (2011). The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan. Transportation Research Part E: Logistics and Transportation Review, 47(6), 822-836. https://doi.org/10.1016/j.tre.2011.05.016

• Chow, W. S., & Chen, Y. (2012). Corporate sustainable development: Testing a new scale based on the mainland chinese context. Journal of Business Ethics, 105(4), 519-533. https://doi.org/10.1007/s10551-011-0983-x

• Coff, R. W. (1999). When competitive advantage doesn’t lead to performance: The resource-based view and stakeholder bargaining power. Organization Science, 10(2), 119-133.

• Coombs, J. E., & Bierly, P. E. (2006). Measuring technological capability and performance. R&D Management, 36(4), 421-438. https://doi.org/10.1111/j.1467-9310.2006.00444.x

• Cortez, M. A., & Cudia, C. P. (2010). The impact of environmental innovations on financial performance: The case of Japanese automotive and electronics companies. Journal of International Business Research, 9(SI. 1), 33-47.

• Delmas, M., Etzion, D., & Nairn-Birch, N. (2013). Triangulating environmental performance: What do corporate social responsibility ratings really capture? The Academy of Management Perspectives, 27(3), 255-267. https://doi.org/10.5465/amp.2012.0123

• Dost, M., Pahi, M. H., Magsi, H. B., & Umrani, W. A. (2019). Effects of sources of knowledge on frugal innovation: Moderating role of environmental turbulence. Journal of Knowledge Management, 23(7), 1245-1259. https://doi.org/10.1108/JKM-01-2019-0035

• Eltayeb, T. K., Zailani, S., & Ramayah, T. (2011). Green supply chain initiatives among certified companies in Malaysia and environmental sustainability: Investigating the outcomes. Resources, Conservation and Recycling, 55(5), 495-506. https://doi.org/10.1016/j.resconrec.2010.09.003

• Figge, F., & Hahn, T. (2012). Is green and profitable sustainable? Assessing the trade-off between economic and environmental aspects environmental performance. International Journal of Production Economics, 140, 92-102. https://doi.org/10.1016/j.ijpe.2012.02.001

• Falk, R. F., & Miller, N. B. (1992). A primer for soft modeling. University of Akron Press.

• Fernando, Y., Jabbour, C. J. C., & Wah, W. X. (2019). Pursuing green growth in technology firms through the connections between environmental innovation and sustainable business performance: Does service capability matter? Resources, Conservation and Recycling, 141, 8-20. https://doi.org/10.1016/j.resconrec.2018.09.031

• Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50. https://doi.org/10.2307/3151312

• Forsman, H. (2013). Environmental innovations as a source of competitive advantage or vice versa? Business Strategy and the Environment, 22(5), 306-320. https://doi.org/10.1002/bse.1742

• Gastwirth, J. L., Gel, Y. R., & Miao, W. (2009). The impact of Levene’s test of equality of variances on statistical theory and practice. Statistical Science, 24(3), 343-360. https://doi.org/10.1214/09-STS301

• Grekova, K., Bremmers, H. J., Trienekens, J. H., Kemp, R. G. M., & Omta, S. W. F. (2013). The mediating role of environmental innovation in the relationship between environmental management and firm performance in a multi-stakeholder environment. Journal on Chain and Network Science, 13(2), 119-137. https://doi.org/10.3920/JCNS2013.1003

• Guenther, E., & Hoppe, H. (2014). Merging limited perspectives. Journal of Industrial Ecology, 18(5), 689-707. https://doi.org/10.1111/jiec.12125

• Hair, J. F., Hollingsworth, C. L., Randolph, A. B., & Chong, A. Y. L. (2017). An updated and expanded assessment of PLS-SEM in information systems research. Industrial Management & Data Systems, 117(3), 442-458. https://doi.org/10.1108/IMDS-04-2016-0130

• Hair, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2016). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2nd ed.). Sage.

• Hair, J. F., Ringle, C. M., & Sarstedt, M. (2013). Partial least squares structural equation modeling: Rigorous applications, better results and higher acceptance. Long range planning, 46(1-2), 1-12.

• Hart, S. L. (1995). A natural-resource-based view of the firm. The Academy of Management Review, 20(4), 986-1014. https://doi.org/10.2307/258963

• Hart, S. L., & Dowell, G. (2011). A natural-resource-based view of the firm: Fifteen years after. Journal of Management, 37(5), 1464-1479. https://doi.org/10.1177/0149206310390219

• Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modeling in international marketing. In R. S. Rudolf & N. G. Pervez (Eds.), New challenges to international marketing (Vol. 20, pp. 277-319). Emerald Jai.

• Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the academy of marketing science, 43(1), 115-135. https://doi.org/10.1007/s11747-014-0403-8

• Judge, W. Q., & Douglas, T. J. (1998). Performance implications of incorporating natural environmental issues into the strategic planning process: An empirical assessment. Journal of Management Studies, 35(2), 241-262. https://doi.org/10.1111/1467-6486.00092

• Karagozoglu, N., & Lindell, M. (2000). Environmental management: testing the win–win model. Journal of Environmental Planning and Management ,43, 817-829. https://doi.org/10.1080/09640560020001700

• Kesidou, E., & Demirel, P. (2012). On the drivers of eco-innovations: Empirical evidence from the UK. Research Policy, 41(5), 862-870. https://doi.org/10.1016/j.respol.2012.01.005

• King, A., & Lenox, M. (2001). Does it really pay to be green? An empirical study of firm environmental and financial performance. Journal of Industrial Ecology, 5(1), 105-116. https://doi.org/10.1162/108819801753358526

• Klassen, R. D., & Whybark, D. C. (1999). Environmental management in operations: The selection of environmental technologies. Decision Sciences, 30(3), 601-631. https://doi.org/10.1111/j.1540-5915.1999.tb00900.x

• Küçükoğlu, M. T., & Pınar, R. İ. (2015). Positive influences of green innovation on company performance. Procedia-Social and Behavioral Sciences, 195, 1232-1237. https://doi.org/10.1016/j.sbspro.2015.06.261

• Larwood, L., Falbe, C. M., Kriger, M. P., & Miesing, P. (1995). Structure and meaning of organisational vision. Academy of Management Journal, 38(3), 740-769. https://doi.org/10.2307/256744

• Lee, V.-H., Ooi, K.-B., Chong, A. Y.-L., & Lin, B. (2013). A structural analysis of greening the supplier, environmental performance and competitive advantage. Production Planning & Control: The Management of Operations, 26(2), 116-130. https://doi.org/10.1080/09537287.2013.859324

• Liao, Z. (2016). Temporal cognition, environmental innovation, and the competitive advantage of enterprises. Journal of Cleaner Production, 135, 1045-1053. https://doi.org/10.1016/j.jclepro.2016.07.021

• Ma, H. (2000). Competitive advantage and firm performance. Competitiveness Review: An International Business Journal, 10(2), 15-32. https://doi.org/10.1108/eb046396

• McCarthy, N., Rouse, W. B., & Serban, N. (2015). Disentangling competitive advantage and superior performance and their roles in enterprise transformation. Journal of Enterprise Transformation, 5(2), 113-140. https://doi.org/10.1080/19488289.2015.104017

• McCloskey, J., & Maddock, S. (1994). Environmental management: Its role in corporate strategy. Management Decision, 32(1), 27-32. https://doi.org/10.1108/00251749410050651

• Newbert, S. L. (2007). Empirical research on the resource-based view of the firm: An assessment and suggestions for future research. Strategic Management Journal, 28(2), 121-146. https://doi.org/10.1002/smj.573

• Nishimura, A. (2014). Transforming cost design into environmentally conscious cost design in Japan: Likelihood and problems for further development. Journal of Management Control, 25(1), 55-75. https://doi.org/10.1007/s00187-014-0190-x

• O’Connell, D., Hickerson, K., & Pillutla, A. (2011). Organizational visioning: An integrative review. Group & Organization Management, 36(1), 103-125. https://doi.org/10.1177/1059601110390999

• OECD. (2005). Oslo manual: Guidelines for collecting and interpreting innovation data (3rd ed.). OECD Publishing.

• Ong, T. S., Lee, A. S., Teh, B. H., & Magsi, H. B. (2019). Environmental innovation, environmental performance and financial performance: Evidence from Malaysian environmental proactive firms. Sustainability, 11(12), 3494. https://doi.org/10.3390/su11123494

• Ong, T. S., Lee, A. S., Teh, B. H., Magsi, H. B., & Ng, S. H. (2020). Environmental capabilities and environmental innovations of manufacturing firms in Malaysia. Indonesian Journal of Sustainability Accounting and Management, 1(1), 1-14. https://doi.org/10.28992/ijsam.v4i1.248

• Orsato, R. J. (2006). Competitive environmental strategies: When does it pay to be green? California Management Review, 48(2), 127-143. https://doi.org/10.2307/41166341

• Pearce, C. L., & Ensley, M. D. (2004). A reciprocal and longitudinal investigation of the innovation process: The central role of shared vision in product and process innovation teams (PPITs). Journal of Organizational Behavior, 25(2), 259-278. https://doi.org/10.1002/job.235

• Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource-based view. Strategic Management Journal, 14(3), 179-191.

• Peteraf, M. A., & Barney, J. B. (2003). Unraveling the resource-based tangle. Managerial & Decison Economics, 24(4), 309-323. https://doi.org/10.1002/mde.1126

• Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879-903. https://doi.org/10.1037/0021-9010.88.5.879

• Porter, M. E. (1980). Industry structure and competitive strategy: Keys to profitability. Financial Analysts Journal, 36(4), 30-41.

• Porter, M. E. (1981). The contributions of industrial organization to strategic management. Academy of Management Review, 6(4), 609-620. https://doi.org/10.2307/257639

• Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78-92.

• Porter, M. E., & Van der Linde, C. (1995). Green and competitive: Ending the stalemate. Harvard Business Review, 73(5), 120-134.

• Pujari, D., Peattie, K., & Wright, G. (2004). Organizational antecedents of environmental responsiveness in industrial new product development. Industrial Marketing Management, 33(5), 381-391. https://doi.org/10.1016/j.indmarman.2003.09.001

• Reinhardt, F. L. (1998). Environmental product differentiation: Implicaitons for corporate strategy. California Management Review, 40(4), 43-73. https://doi.org/10.2307/41165964

• Rennings, K., Ziegler, A., Ankele, K., & Hoffmann, E. (2006). The influence of different characteristics of the EU environmental management and auditing scheme on technical environmental innovations and economic performance. Ecological Economics, 57(1), 45-59. https://doi.org/10.1016/j.ecolecon.2005.03.013

• Ong, T.S, Magsi, H. B., & Burgess, T. F. (2019). Organisational culture, environmental management control systems, environmental performance of Pakistani manufacturing industry. International Journal of Productivity and Performance Management, 68(7), 1293-1322. https://doi.org/10.1108/IJPPM-05-2018-0187

• Sarstedt, M., Ringle, C. M., Smith, D., Reams, R., & Hair, J. F. (2014). Partial Least Squares Structural Equation Modeling (PLS-SEM): A useful tool for family business researchers. Journal of Family Business Strategy, 5(1), 105-115. https://doi.org/10.1016/j.jfbs.2014.01.002

• Schaltegger, S., & Synnestvedt, T. (2002). The link between ‘green’ and economic success: Environmental management as the crucial trigger between environmental and economic performance. Journal of Environmental Management, 65(4), 339-346. https://doi.org/10.1006/jema.2002.0555

• Schiederig, T., Tietze, F., & Herstatt, C. (2012). Green innovation in technology and innovation management - An exploratory literature review. R&D Management, 42(2), 180-192. https://doi.org/10.1111/j.1467-9310.2011.00672.x

• Sezen, B., & Çankaya, S. Y. (2013). Effects of green manufacturing and eco-innovation on sustainability performance. Procedia - Social and Behavioral Sciences, 99, 154-163. https://doi.org/10.1016/j.sbspro.2013.10.481

• Sharma, S., & Vredenburg, H. (1998). Proactive corporate environmental strategy and the development of competitively valuable organizational capabilities. Strategic Management Journal, 19(8), 729-753. https://doi.org/10.1002/(SICI)1097-0266(199808)19:8<729::AID-SMJ967>3.0.CO;2-4

• Shrivastava, P. (1995). Environmental technologies and competitive advantage. Strategic Management Journal, 16(S1), 183-200. https://doi.org/10.1002/smj.4250160923

• Sigalas, C., & Economou, V. P. (2013). Revisiting the concept of competitive advantage: problems and fallacies arising from its conceptualization. Journal of Strategy and Management, 6(1), 61-80. https://doi.org/10.1108/17554251311296567

• Sigalas, C., Economou, V. P., & Georgopoulos, N. B. (2013). Developing a measure of competitive advantage. Journal of Strategy and Management, 6(4), 320-342. https://doi.org/10.1108/JSMA-03-2013-0015

• Tsai, W., & Ghoshal, S. (1998). Social capital and value creation: The role of intrafirm networks. Academy of Management Journal, 41(4), 464-476. https://doi.org/10.2307/257085

• Wagner, M., & Schaltegger, S. (2004). The effect of corporate environmental strategy choice and environmental performance on competitiveness and economic performance: An empirical study of EU manufacturing. European Management Journal, 22(5), 557-572. https://doi.org/10.1016/j.emj.2004.09.013

• Walley, N., & Whitehead, B. (1994). It’s not easy being green. Harvard Business Review, 72(3), 46-51.

• Wiengarten, F., Pagell, M., & Fynes, B. (2013). ISO 14000 certification and investments in environmental supply chain management practices: identifying differences in motivation and adoption levels between Western European and North American companies. Journal of Cleaner Production, 56, 18-28. https://doi.org/10.1016/j.jclepro.2012.01.021

• Zaccaro, S. J., & Banks, D. (2001). Leadership, vision, and organizational effectiveness. In S. J. Zaccaro & R. J. Klimoski (Eds.), The nature of organizational leadership: Understanding the performance imperatives confronting today’s leaders (pp. 181-218). Jossey-Bass.