An Investigation of Barriers to Adopt Green Innovation Among Manufacturing Organizations in Vietnam

Abstract

This research aims to identify the main barriers to green innovation in Vietnam manufacturing organizations. This study began by reviewing the relevant literature and providing a solid theoretical framework to understand the determinants of green innovation for manufacturing firms in the global context. It also helps internal and external stakeholders figure out what influence and how to implement green innovation more efficiently by removing all impediments. Additionally, this article is considered a valuable and rational evidence for prioritizing and directing innovation policies in the manufacturing industry. Based on numerical data from 143 employees at middleand upper-level managers among manufacturing companies around Vietnam, the study found that deficiency of financial resources primarily significantly impacts green innovation adoption, followed by the uncertainty of market demand and lack of government support. However, with limited observations, the investigation did not observe the dynamic effect of green innovation over periods and only focused on the manufacturing sector instead of different industries for generalizing the research results. Moreover, the circumstances of green innovation would be diverse in other nations.


Keywords: green innovation, manufacturing organizations, government supports, financial barriers, market barriers

References
[1] ABDULLAH, M., ZAILANI, S., IRANMANESH, M. & JAYARAMAN, K. 2015. Barriers to green innovation initiatives among manufacturers: the Malaysian case. Review Management Science, 9.

[2] ADB 2020. VIET NAM Technical and Vocational Education and Training Sector Assessment. Metro Manila: Asian Development Bank.

[3] AL KHIDIR, T. & ZAILANI, S. 2009. Going Green in Supply Chain Towards Environmental Sustainability. Global Journal of Environmental Research, 3, 246- 251.

[4] ASHFORD, N. A. 1993. Understanding Technological Responses of Industrial Firms to Environmental Problems: Implications for Government Policy. Environmental Strategies for Industry, 277-307.

[5] AZAPAGIC, A. 2010. Assessing environmental sustainability: life cycle thinking and life cycle assessment. In: AZAPAGIC, A. & PERDAN, S. (eds.) Sustainable Development in Practice: Case Studies for Engineers and Scientists. UK: Wiley: Chichester.

[6] BALASUBRAMANIAN, S. 2012. A hierarchiacal framework of barriers to green supply chain management in the construction sector.

[7] BALDWIN, J. & LIN, Z. 2002. Impediments to advanced technology adoption for Canadian manufacturers. Research policy, 31, 1-18.

[8] BENN, S., DUNPHY, D. & GRIFFITHS, A. 2014. Organizational Change for Corporate Sustainability, New York, Routledge.

[9] BOWEN, F. E., COUSINS, P. D., LAMMING, R. C. & FARUK, A. C. 2001. Horses for courses:explaining the gap between the theory and practice of green supply. Greener Management International Autumn, 41-60.

[10] CANEPA, A. & STONEMAN, P. 2007. Financial constraints to innovation in the UK: Evidence from CIS2 and CIS3. Oxford Economic Papers, 60, 711–730.

[11] CARTER, C. R. & DRESNER, M. 2001. Purchasing’s role in environmental management: cross-functional development of grounded theory. Supply Chain Management, 37, 12-26.

[12] CETINDAMAR, D., PHAAL, R. & PROBERT, D. 2009. Understanding technology management as a dynamic capability: a framework for technology management activities. Technovation 29, 237-246.

[13] CHEN, Y. 2011. Green organisational identity: sources and consequence. Management Decision, 49, 384–404.

[14] CHEN, Y. S. 2008. The driver of green innovation and green image-green core competence. Journal of Business Ethics, 81, 531–543.

[15] 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, 331-339.

[16] CHIOU, T., CHAN, H., LETTICE, F. & CHUNG, S. 2011. 1. The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan. Transportation Research E, 47, 822-836.

[17] COHEN, W. M. & LEVINTHAL, D. A. 1990. Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly, 35, 128–152.

[18] CURKOVIC, S. & SROUFE, R. 2011. Using ISO 14001 to promote a sustainable supply chain strategy. Business Strategy and the Environment, 20, 71-93.

[19] DANGELICO, R. & PUJARI, D. 2010. Mainstreaming green product innovation: why and how companies integrate environmental sustainability. Journal of Business Ethics, 95, 471-486.

[20] DE KONING, J. I. J. C., CRUL, M. R. A., WEVER, R. & BREZET, J. C. 2015. Sustainable consumption in Vietnam: an explorative studyamong the urban middle class. International Journal of Consumer Studies, 1, 608-609.

[21] DEL RÍO, P., CARRILLO-HERMOSILLA, J. & KÖNNÖLÄ, T. 2010. Policy Strategies to Promote Eco-Innovation. Journal of Industrial Ecology, 14, 541-557.

[22] DHULL, S. & NARWAL, M. 2016. Drivers and barriers in green supply chain management adaptation: A state-of-art review. Uncertain Supply Chain Management, 4, 61-76.

[23] DRUCKER, P. 1998. The discipline of innovation. Harvard Business Review, 76, 149- 158.

[24] DUBEY, R., GUNASEKARAN, A. & SAMAR ALI, S. 2015. Exploring the relationship between leadership, operational practices, institutional pressures and environmental performance: A framework for green supply chain. International Journal of Production Economics, 160, 120-132.

[25] ERYGIT, N. & OZCURE, G. 2020. Eco-Innovation as Modern Era Strategy of Companies in Developing Countries: Comparison Between Turkey And European Union. Procedia - Social and Behavioral Sciences, 195, 1216-1225.

[26] FAYYAZI, M., SHAHBAZMORADI, S., AFSHAR, Z. & SHAHBAZMORADI, M. 2015. Investigating the barriers of the green human resource management implementation in oil industry. Management science letters, 5, 101-108.

[27] GHISETTI, C., MANCINELLI, S., MAZZANTI, M. & ZOLI, M. 2017a. Financial barriers and environmental innovations: evidence from EU manufacturing firms. Climate Policy, 17, 131-147.

[28] GHISETTI, C., MANCINELLI, S., MAZZANTI, M. & ZOLI, M. 2017b. Financial barriers and environmental innovations: evidence from EU manufacturing firms. Climate Policy, 17, S131-S147.

[29] GOVINDAN, K., KALIYAN, M., KANNAN, D. & HAQ, A. N. 2014. Barriers analysis for green supply chain management implementation in Indian industries using analytic hierarchy process. International Journal of Production Economics, 147, 555-568.

[30] GREENPEACE 2014. Green Gadgets: Designing the future The path to greener electronics. Greenpeace.

[31] GROENEWEGEN, P. & VERGRAT, P. 1991. Environmental issues as threats and opportunities for technological innovation. Technology Analysis and Strategic Management, 3, 43-55.

[32] GROOT, W. & BORÉN, T. 2010. Life cycle assessment of the manufacture of lactide and PLA biopolymers from sugarcane in Thailand. The International Journal of Life Cycle Assessment, 15, 970–984.

[33] GUPTA, H. & BARUA, M. K. 2018a. A framework to overcome barriers to green innovation in SMEs using BWM and Fuzzy TOPSIS. Science of The Total Environment, 633, 122–139.

[34] GUPTA, H. & BARUA, M. K. 2018b. A framework to overcome barriers to green innovation in SMEs using BWM and Fuzzy TOPSIS. Science of the Total Environment, 633, 122-139.

[35] HAIR, J. F. 2009. Multivariate data analysis.

[36] HART, S. L. 1995. A natural resource-based view of the firm. Academy of Management Review, 20, 986-1014.

[37] HAZARIKA, N. & ZHANG, X. 2019. Factors that drive and sustain eco-innovation in the construction industry: The case of Hong Kong. Journal of cleaner Production, 238, 117816.

[38] HO, N. & NGUYEN, A. 2016. Green Economy Development in Vietnam and the Involvement of Enterprises. Low Carbon Economy, 7, 1-2.

[39] HOFFMAN, K., PAREJO, M., BESSANT, J. & PERREN, L. 1998. Small firms, R&D, technology and innovation in the UK: a literature review. Technovation, 18, 39–55.

[40] HOJNIK, J. & RUZZIER, M. 2016. Drivers of and barriers to eco-innovation: a case study. International Journal of Sustainable Economy, 4, 273-294.

[41] HOLZL, W. & JANGER, J. 2014. Distance to the frontier and the perception of innovation barriers across European countries. Res Policy, 43, 707–725.

[42] HOTTENROTT, H. & PETERS, B. 2012. Innovative capability and financing constraints for innovation: More money, more innovation? Review of Economics and Statistics, 94, 1126–1142.

[43] ILO 2020. Rapid assessment of the impact of the COVID-19 pandemic on businesses and workers in several key economic sectors: Response, adjustment and resilience. International Labor Organization, 1, 7-8.

[44] JINZHOU, W. 2011. Discussion on the Relationship between Green Technological Innovation and System Innovation Energy Procedia 5, 2352–2357.

[45] KANE, B., CRAWFORD, J. & GRANT, D. 1999. Barriers to effective HRM. International Journal of Manpower, 20, 494-516.

[46] KAPOOR, S. & OKSNES, L. 2011. Funding the green new deal: Building a green financial system (Green New Deal Series Vol. 6). Green European Foundation (GEF).

[47] KASPRZYK, I., RODINKOVA, V., ŠAULIENĖ, I., RITENBERGA, O., GRINN-GOFRON, A., NOWAK, M. & SULBORSKA, A. 2014. Air pollution by allergenic spores of thegenus Alternaria in the air of central andeastern Europe. Environmental Science and PollutionResearch, 72, 35-37.

[48] KIDWELL, B., FARMER, A. & HARDESTY, D. M. 2013. Getting Liberals and Conservatives to Go Green: Political Ideology and Congruent Appeals. Journal of Consumer Research, 40, 350-367.

[49] KING, A. & LENOX, M. 2002. Exploring the locus of profitable pollution reduction. Management Science, 48, 289-300.

[50] KONG, N., SALZMANN, O., STEGER, U. & IONESCU-SOMERS, A. 2002. Moving business/industry towards sustainable consumption: the role of NGOs. European Management Journal, 20, 109-127.

[51] KUSHWAHA, D. & TALIB, F. 2017. Ranking of Barriers to Green Manufacturing Implementation in SMEs Using Best-Worst Method. International Conference on Mechanical and Energy Technologies, 748, 1-3.

[52] LEE, Y. S. & RHEE, S. 2007. The change in corporate environmental strategies: a longitudinal empirical study. Management Decision, 45, 196–216.

[53] LIAO, W. & WANG, T. 2018. Promoting green and sustainability: A multi-objective optimisation method for the job-shop schedulingproblem. Sustainability, 10, 1-19.

[54] LIU, X., YANG, J., QU, S., WANG, L., SHISHIME, T. & BAO, C. 2012. Sustainable production: practices and determinant factors of green supply chain management of Chinese companies. Business Strategy and the Environment, 21, 1-16.

[55] LOREK, S. & SPANGENBERG, J. H. 2014. Sustainable consumption within a sustainable economy– beyond green growth and green economies. Journal of Cleaner Production, 63, 33–44.

[56] LUTHRA, S., KUMAR, V., KUMAR, S. & HALEEM, A. 2011. Barriers to implement green supply chain management in automobile industry using interpretive structural modeling technique-An Indian perspective. Journal of Industrial Engineering and Management, 4, 231-257.

[57] MADRID-GUIJARRO, A., GARCIA, D. & VAN, A. H. 2009. Barriers to innovation among Spanish manufacturing SMEs. Journal of Small Business Management, 47, 465–488.

[58] MANGLA, S. K., GOVINDAN, K. & LUTHRA, S. 2017. Prioritising the barriers to achieve sustainable consumption and production trends in supply chains using fuzzy analytical Hierarchy Process. Journal of Small Business Management, 151, 509-525.

[59] MATHIYAZHAGAN, K., GOVINDAN, K., NOORULHAQ, A. & GENG, Y. 2013. An ISM approach for the barrier analysis in implementing green supply chain management. Journal of Cleaner Production, 47, 283-297.

[60] MEHRABI, M., ULSOY, A. & KOREN, Y. 2000. Reconfigurable Manufacturing Systems: Key to Future Manufacturing. Journal of Intelligent Manufacturing, 11, 403–419.

[61] MIN, H. & GALLE, W. P. 2001. Green purchasing practices of US firms. International Journal of Operations & Production Management, 21, 1222-1238.

[62] MOCH, M. K. & MORSE, E. V. 1977. Size, Centralisation and Organizational Adoption of Innovations. American Sociological Review, 42, 716-725.

[63] MOIT 2021. Xu hướng tiêu dùng xanh ngày càng được coi trọng. MOIT.

[64] MOIT. 2022. Programme to support private firms in sustainable business development [Online]. MOIT. Available: https://moit.gov.vn/en/news/latestnews/ programme-to-support-private-firms-in-sustainable-businessdevelopment. html [Accessed 2022].

[65] MOST 2022. https://www.most.gov.vn/vn/tin-tuc/21963/thu-hut-cong-nghe-caochuyen- doi-nen-kinh-te-xanh-o-viet-nam.aspx. Ministry of Science and Technology.

[66] MUDGAL, R. K., SHANKAR, R., TALIB, B. & RAJ, T. 2010. Modelling the barriers of green supply chain practices: an Indian perspective. International Journal of Logistic Systems and Management, 1, 81-107.

[67] MURPHY, P. R., POIST, R. F. & BRAUNSCHWEIG, C. D. 1996. Green logistics: Comparative views of environmental progressives, moderates, and conservatives. Journal of Business Logistics, 17, 191-211.

[68] MUSAAD O, A. S., ZHUO, Z., MUSAAD O, A. O., ALI SIYAL, Z., HASHMI, H. & SHAH, S. A. A. 2020. A fuzzy multi-criteria analysis of barriers and policy strategies for small and medium enterprises to adopt green innovation. Symmetry, 12, 116.

[69] NAFFZIGER, D., AHMED, N. & MONTAGNO, R. 2003. Perceptions of environmental consciousness in U.S. small businesses: An empirical study. Advanced Management Journal, 68, 23.

[70] ORSATO, R. 2006. Competitive Environmental Strategies: When Does It Pay to be Green? California Management Review 48, 127-143.

[71] OSTERMAN, P. 2000. Work reorganisation in an era of restructuring: trends in diffusion and effects on employee welfare. ILR Review, 53, 179–196.

[72] PATRICK, I. 2017. How to foster green product innovation in an inert sector. Journal of Innovation & Knowledge, 11, 13.

[73] PAWANCHIK, A. & SULAIMAN, S. 2010. In search of InnovAsian: the Malaysian innovation climate report 2010. Kuala Lumpur: Alpha Catalyst Consulting.

[74] PERRON, G. M. 2005. Barriers to Environmental Performance Improvements in Canadian SMEs. Canada: Dalhousie University.

[75] PINGET, A., BOCQUET, R. & MOTHE, C. 2015. Barriers to environmental innovation in SMEs: Empirical evidence from French firms. M@ n@ gement, 18, 132-155.

[76] PUN, K. F. 2006. Determinants of environmentally responsible operations: a review. International Journal of Quality & Reliability Management.

[77] RAO, P. 2002. Greening of the supply chain: a new initiative in South East Asia. International Journal of Operations & Production Management, 22, 632-655.

[78] RAO, P. & HOLT, D. 2005. Do green supply chains lead to competitiveness and economic performance? International Journal of Operations & Production Management, 25, 898-916.

[79] REAP, J., ROMAN, F., DUNCAN, S. & BRAS, B. 2008. A survey of unresolved problems in life cycle assessment, part 2: impact assessment and interpretation. The International Journal of Life Cycle Assessment, 13, 374–388.

[80] REHMAN, S. U., KRAUS, S., SHAH, S. A., KHANIN, D. & MAHTO, R. V. 2020. Analysing the relationship between green innovation and environmental performance in large manufacturing firms. Technological Forecasting & Social Change, 12, 2-5.

[81] REVELL, A. & RUTHERFOORD, R. 2003. UK environmental policy and the small firm: broadening the focus. Business Strategy and the Environment, 12, 26-35.

[82] ROTHENBERG, S. 2003. Knowledge Content and Worker Participation in Environmental Management at NUMMI. Journal of Management Studies, 40, 1783–1802.

[83] RUBIK, F., FRANKL, P., PIETRONI, L. & SCHEER, D. 2007. Eco-labelling and consumers: towards a re-focus and integrated approaches. International Journal of Innovation and Sustainable Development, 2, 175-191.

[84] RUNHAAR, H., TIGCHELAAR, C. & VERMEULEN, W. J. 2008. Environmental Leaders: Making a Difference. A Typology of Environmental Leaders and Recommendations for aDifferentiated Policy Approach. Business Strategy and the Environment, 1, 160– 178.

[85] RUSSO, M. V. & FOUTS, P. A. 1997. A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal, 40, 534-559.

[86] SARKIS, J., GONZALEZ-TORRE, P. & ADENSO-DIAZ, B. 2010. Stakeholder pressure and the adoption of environmental practices: The mediating effect of training. Journal of Operations Management, 28, 163-176.

[87] SHAHZAD, U. 2015. Global Warming: Causes, Effects and Solutions. Durreesamin Journal, 1, 1-2.

[88] SILVA, M. J., LEITAO, J. & RAPOSO, M. 2008. Barriers to innovation faced by manufacturing firms in Portugal: how to overcome it for fostering business excellence? International Journal of Business Excellence, 1, 92-105.

[89] SPCO 2018. Tác động của xu hướng tiêu dùng xanh đến doanh nghiệp Việt Nam. In: INDUSTRY, M. O. T. A. (ed.).

[90] SPCO 2019. Tiêu dùng xanh: Giải pháp hiệu quả bảo vệ môi trường và sức khỏe cộng đồng, hướng đến phát triển bền vững. Ministry of Trade and Industry.

[91] SPENCER, J. W. 2003. Firms' knowledge-sharing strategies in the global innovation system: Empirical evidence from the flat panel display industry. Strategic Management Journal, 24, 217-233.

[92] STOCK, J. R. 1998. Development and implementation of reverse logistics programs Oak Brook, Council of Logistics Management.

[93] SUN, J., ZHOU, Z., HUANG, J. & LI, G. 2020. A Bibliometric Analysis of the Impacts of Air Pollution on Children. Internaltional Journal of Environmental Research and Public Health, 12, 2-4.

[94] TILLEY, F. 1999. The gap between the environmental attitudes and the environmental behaviour of small firms. Business Strategy and the Environment, 8, 238-248.

[95] TOAN, D. 2022. Tiêu dùng xanh: Giải pháp bảo vệ môi trường và sức khỏe cộng đồng. Kinh tế đô thị.

[96] TSENG, M., LIM, M. & WONG, W. P. 2015. Sustainable supply chain management: a closed-loop network hierarchical approach. Industrial Management & Data Systems, 115, 436–461.

[97] ULLAH, S., AHMAD, N., KHAN, F. U., BADULESCU, A. & BADULESCU, D. 2021. Mapping Interactions among Green Innovations Barriers in Manufacturing Industry Using Hybrid Methodology: Insights from a Developing Country. International Journal of Environmental Research and Public Health, 18, 7885.

[98] UNITEDNATIONS, V. 2017. National Action Plan for the implementation of the 2030 sustainable development agenda. UN

[99] WALKER, H., SISTO, L. D. & MCBAINC, D. 2008. Drivers and barriers to environmental supply chain management practices: Lessons from the public and private sectors. Journal of Purchasing & Supply Management, 14, 69–85.

[100] WANG, J. 2011. Discussion on the relationship between green technological innovation and system innovation. Energy Procedia, 5, 2352–2357.

[101] WILSON, C., WILLIAMS, I. & KEMP, S. 2011. Compliance with producer responsibility legislation: experiences from UK small and medium-sized enterprises. Business Strategy and the Environment, 20, 310–330.

[102] WONG, S. K. S. 2012. Environmental Requirements, Knowledge Sharing and Green Innovation: Empirical Evidence from the Electronics Industry in China. Business Strategy and the Environment, 22, 321-338.

[103] WORLDBANK 2018. Global Waste to Grow by 70 Percent by 2050 Unless Urgent Action is Taken: World Bank Report.

[104] WORLDECONOMICFORUM 2013. The Green Investment Report: The ways and means to unlock private finance for green growth. Geneva: World Economic Forum.

[105] WYCHERLEY, I. 1999. Green Supply Chains: The Case of The Body Shop International. Business Strategy and the Environment, 8, 120-127.

[106] YLINENPÄÄ, H. 1998. Measures to Overcome Barriers to Innovation in Sweden - Fits and Misfits. Vienna: Luleå University of Technology.

[107] ZAREI, S. & MADAN, N. M. 2020. International Cooperation for Environmental Protection in the 21st Century. CIFILE Journal of International Law, 1, 1-3.

[108] ZHU, L., LUO, J., DONG, Q., ZHAO, Y., WANG, Y. & WANG, Y. 2021. Green technology innovation efficiency of energy-intensive industries in China from the perspective of shared resources: Dynamic change and improvement path. Technological Forecasting and Social Change, 170, 120890.

[109] ZWICK, T. 2002. Employee Resistance Against Innovations. International Journal of Manpower, 23, 542–552.