Institutional Theory and Environmental Pressures: The Moderating Effect of Market Uncertainty on Innovation and Firm Performance

Although considerable research has investigated the influence of institutional pressures on environmental practices, few studies have examined its impact on innovation among third-party logistics (3PL) providers. Moreover, extant scholarship equivocates on the relationships between various institutional pressures and green innovation. Different industries develop unique responses to their contexts and 3PL providers may counter environmental issues unlike other sectors (e.g., manufacturing). Integrating the institutional theory and natural-resource-based view, this paper examines green innovations of 3PL providers as a response to their institutional pressures and to gain competitive advantages, as well as explores the contingent effect of market uncertainty. Based on survey data acquired from 165 3PL providers in China, the empirical results suggest customer pressure and competitive pressure significantly impel 3PL providers to adopt a green innovation, while to this point, regulatory pressure has not affected such innovation. Additionally, green innovation positively affects financial performance for 3PL providers in China. Moreover, market uncertainty alleviates the driving effect of customer pressure on green innovation, but amplifies its contributive effect on performance. Research implications for green innovation in the 3PL context, practical implications, and future research direction are discussed.