The catalytic role of responsible investments in innovation and firm performance link: in the context of manufacturing in Asia-Pacific

Technological innovations while economically prudent may have harmful consequences to the planet and/or people. This paper empirically investigates the moderating effect of responsible investment on the influence of innovation on firm performance in manufacturing industry. The hypothesized relationships are justified using signalling theory. Relationships are tested using data from six countries in Asia-pacific region, namely Australia, Korea, Taiwan, China, India, and Vietnam. The established measures are drawn from well-established GMRG fifth version survey instrument. The empirical analysis on 297 data points was done using SmartPLS3. The result strongly suggests that the responsible investments have significant positive moderating effect on the innovation, product and process, and firm performance relationships. Managers are, therefore, encouraged to not only consider responsible consequences of technological innovation, but also pay attention to the responsible investment aspects that influence innovation-performance relationship.

Automated summary

This paper empirically investigates the moderating effect of responsible investment on the influence of innovation on firm performance in manufacturing industry. The results strongly suggest that responsible investments have a significant positive moderating effect on the innovation, product and process, and firm performance relationships. Managers are encouraged to consider both the responsible consequences of technological innovation and the responsible investment aspects that influence the innovation-performance relationship.