Received: 22 December 2021 Revised: 21 April 2022 Accepted: 5 May 2022

DOI: 10.1002/bse.3136

RESEARCH ARTICLE

Green intellectual capital and ambidextrous green innovation:

The impact on environmental performance

Kaveh Asiaei1 | Neale G O'Connor1 | Omid Barani2 | Mahesh Joshi3

1
Department of Accounting, School of
Business, Monash University Malaysia, Bandar
Sunway, Malaysia
2
Young Researchers and Elite Club, Mashhad,
Iran
3
School of Accounting, Information Systems
and Supply Chain, RMIT University,
Melbourne, Australia
Correspondence
Kaveh Asiaei, Department of Accounting,
School of Business, Monash University
Malaysia, Bandar Sunway, Malaysia.
Email: kaveh.asiaei@monash.edu
Abstract
This study relies on a unique synthesis of ambidexterity theory and the natural
resource orchestration approach to investigate how green intellectual capital ele-
ments, namely green human, structural, and relational capital, along with ambidex-
trous green innovation, trigger a synergy in favor of environmental performance. In
particular, this paper primarily aims to test the mediating role of ambidextrous green
innovation in the relationship between green intellectual capital and environmental
performance. Based on a survey of 105 Iranian public listed companies, the results
indicate that green intellectual capital elements are not directly associated with envi-
ronmental performance. Instead, they influence environmental performance only
through the channel of ambidextrous green innovation as a mediating variable. This
is the first study to simultaneously embed the resource orchestration theory in the
green intellectual capital and ambidexterity literature. The findings of the current
study offer new insights into the issue of how organizations gain maximum benefit
from the orchestration of their various green assets and capabilities, including green
intellectual capital and ambidextrous green innovation.

KEYWORDS
ambidextrous green innovation, environmental performance, green intellectual capital, Iran,
natural resource orchestration, sustainable development

1 | I N T RO DU CT I O N Over the past few decades, mounting institutional, legal, and

Prior research acknowledges that intellectual capital is an important
determinant of innovative capacities in the organizational setting
(Andreeva et al., 2021; Asiaei et al., 2020; Buenechea-Elberdin et al.,
1
2018; Kianto et al., 2017). Intellectual capital is also becoming a criti-
cal factor in tackling society's ecological challenges (Massaro et al.,
2018). In this respect, environmental capabilities and green assets,
which equip businesses to minimize the adverse environmental
impacts while involved in their routine operations, are at the center of
the fourth stage of intellectual capital research (Dameri & Ricciardi,
2015).
consumer-related pressures have propelled organizations to place
environmental and social concerns as their top priorities. As an exam-
ple of such pressures, as of July 2021, there have been 1006 climate
change litigation cases filed since 2015 (Higham, 2021). While most
of these cases have been filed against governments, a small but grow-
ing group of cases also targets the private sector (Setzer & Byrnes,
2019). Take the example of the textiles and clothing industry, the sec-
ond most polluting industry after oil several lawsuits highlight the
growing concern of a disconnect between greenwashing and actual
sustainable and responsible operations. Allbirds positioned itself as a
sustainable company, something that is at the heart of its advertising

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© 2022 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd.

Bus Strat Env. 2023;32:369–386. wileyonlinelibrary.com/journal/bse 369


370
and its initial public offering filings (and those of a growing number of
other companies), but in 2021 a class of plaintiffs sued the footwear
marker for not living up to the claims that are made in its marketing,
including about the carbon footprint of its products, and its “sustain-
able” and “responsible” manufacturing practices (The Fashion Law,
2021). Not the only brand facing legal pushback over its green claims,
Canada Goose has been embroiled in a false advertising suit after
allegedly misleading consumers about the nature of the trapping
methods used to source the fur for its buzzy jackets by claiming that it
is dedicated to “the ethical, responsible, and sustainable sourcing and
use of real fur.” Indeed, consumer sentiment demands the greater
integration of sustainable economic practices (The Fashion Law,
2021). An online survey of 9709 respondents from 9 advanced coun-
tries found that many consumers would like to support a company
that engages in actions and policies demonstrating corporate social
responsibility (CSR) (Cone Communication, 2015). Because many con-
sumers expect companies to be accountable for their CSR efforts,
these potential customers are more likely to trust a company with a
high CSR level. “Nearly nine-in-10 (88%) expect companies to report
on the progress of their CSR efforts, and nearly as many (86%) say if a
company makes CSR commitments, it should be accountable for pro-
ducing and communicating results” (Cone Communication, 2015).
Thus, high levels of CSR, and public perception of that engagement,
may lead to higher sales levels in consumer industries, translating into
a higher level of profits.
Under such circumstances, organizations have initiated new capa-
bilities, for example, advanced management systems, eco-innovations,
and the integration of stakeholders' demands, to pave the way for
environmentally sustainable economic practices (Alvino et al., 2021;
Claver-Cortes et al., 2007). These environmental capabilities or green
assets are the firm's resources essential for operations while minimiz-
ing the adverse environmental effects (Hart & Dowell, 2011).2 It is
argued that “environmental capabilities are part of intellectual capital
since they refer to intangible assets created by the management of
knowledge related to incorporating the environment variable in the
value creation process” (Albertini, 2021, p. 2).
Although there are a plethora of studies documenting the great
significance of intellectual capital since the 1990s, there has been
much less research on how green intellectual capital (GIC) (i.e., the
stock of intangible assets, knowledge, and capabilities, which incorpo-
rates aspects of environmental protection and green innovation,
henceforth GIC) is used in the value creation process (Chang & Chen,

pez-Gamero et al., 2011). Indeed, empirical
2012; Chen, 2008; Lo 3
studies have rarely explored the mechanisms through which GIC influ-
ences environmental performance, “a firm's effectiveness in meeting
and exceeding society's expectations with respect to concerns for the nat-
ural environment” (Judge & Douglas, 1998, p. 245). According to
Asiaei, Bontis, Alizadeh et al. (2022), understanding the processes by
which intellectual capital translates into value creation and environ-
mental performance is the key to understanding the problems with
the past efforts of firms to tackle sustainability issues
(e.g., greenwashing) and the real issues to be addressed in the future.
The question of how to translate organizational practices to meet a
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ASIAEI ET AL.
green agenda has been described as a “forbidden area” of innovation
because it affects the organization's ability to optimize its operations
and the allocation of its resources (Jusoh et al., 2021).
We directly address this gap by drawing from the green innova-
tion literature (Chen et al., 2014; Peters & Buijs, 2022; Úbeda-García
et al., 2022; Wang et al., 2020) to propose ambidextrous green inno-
vation as an overlooked intervening channel through which GIC can
be translated into better environmental performance. Following an
ambidexterity strategy, companies simultaneously pursue exploitative
and exploratory green innovations to deal with different environmen-
tal challenges effectively. Exploitative green innovation is concerned
with the application of existing environmental knowledge, abilities,
and processes to promote existing green products and green designs
(Chen et al., 2014), while exploratory green innovation is related to the
new environmental information, knowledge, and skills to create new
green markets and green products (Wang et al., 2020).
We build upon the “natural resource orchestration” perspective
(Asiaei, Bontis, Alizadeh et al., 2022) for addressing the following main
questions in this paper. (1) What are the relationships between GIC,
ambidextrous green innovation, and environmental performance?
(2) Does ambidextrous green innovation mediate the association
between GIC and environmental performance? The central premise in
our theoretical framework is that an effective orchestration of various
green organizational capabilities and resources (e.g., GIC elements and
ambidextrous green innovation) plays an important role in boosting
environmental performance in the corporate setting. We test our
research hypotheses with data from a survey of Chief Financial Offi-
cers (CFOs) in 105 publicly listed Iranian companies. Using the partial
least squares (PLS) technique (SmartPLS, version 3, Ringle et al., 2015)
based on structural equation modeling (SEM), we document that all
three elements of GIC indirectly affect environmental performance
through the complete mediation of ambidextrous green innovation.
This study extends the existing environmental accounting litera-
ture in the developed context by providing evidence from an emerg-
ing market, that is, the Tehran Stock Exchange (TSE), which enjoys
unique cultural, socio-economic, and political characteristics. A sample
from Iran, which is one of the most populous countries in the Middle
East and one of the largest economies in the region (Oradi et al.,
2020; Rezaee et al., 2021), offers fresh insight into the antecedents
and consequences of environmental engagement in a worldwide set-
ting. This is particularly important because evidence from Iran can
inspire managers, policymakers, and academics whereby green
agenda, in general, and environmental accounting, in particular, are
promoted in a country, that is, Iran, where such practices undergo a
less structured platform (Asiaei, Jusoh, Barani, et al., 2022). According
to the Environmental Performance Index, Iran has recently been
ranked 83 out of 178 (Afshar Jahanshahi et al., 2020). Notwithstand-
ing the acceptable level of environmental awareness among Iranian
companies, the country suffers from a high level of pollution and
emissions of greenhouse gases, water and energy resource waste, and
loss of forests (Haghighi et al., 2021). In light of the support from the
United Nations Educational, Scientific and Cultural Organization
(UNESCO) Green Citizens Project, the Iranian government has

ASIAEI ET AL.
launched several green initiatives along with providing training pro-
grams for the companies to encourage engagement in the develop-
ment of eco-friendly products and green innovations (Afshar
Jahanshahi et al., 2020). For example, the government has recently
allocated about €500 million from the National Development Fund for
green energy development (Eslamizadeh et al., 2020).
Although our study focuses on GIC in a developing country con-
text (i.e., the TSE), we make a broader contribution to the theory of
intellectual capital by integrating attributes of GIC in this area. More
precisely, we draw upon a newly developed approach, that is, natural
resource orchestration (Asiaei, Bontis, Alizadeh, et al., 2022), to inves-
tigate a model that demonstrates how GIC and ambidextrous green
innovation trigger a synergy in favor of environmental performance,
which has notably remained unexplored in previous research. In this
respect, we extend the resource orchestration perspective (Sirmon
et al., 2007, 2011) by proposing that an organization can maximize
the benefits of its green resources and capacities only when they are
structured, bundled, and managed effectively.
The rest of the article is structured as follows. Section 2 articu-
lates the theoretical foundations along with developing the hypothe-
ses. Section 3 provides a comprehensive overview of the
methodology, followed by the data analysis and results presentation
in section 4. Section 5 concludes the paper with an overarching dis-
cussion that presents the key findings, implications, limitations, and
further research agendas at the end.
2 | THEORETICAL FRAMEWORK AND
HYPOTHESES
According to the resource-based view of the firm, competitive
advantage stems from the organization's unique assets and
FIGURE 1 Theoretical model
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371
heterogeneous resources that are valuable, rare, inimitable, and
non-substitutable (Barney, 1991). Although this viewpoint has domi-
nated the intellectual capital literature (Bontis, 1998; Kianto et al.,
2017; Roos & Roos, 1997), the emerging trend highlights that
understanding the process through which resources affect perfor-
mance remains obscure (Miao et al., 2017). Asiaei, Bontis, Barani,
et al. (2022) argue that possessing resources per se is unlikely to
bring about competitive advantage and above-market performance.
Instead, resources must be accumulated, synthesized, and leveraged
to unlock their value-creating potential in what is known as
resource orchestration theory (Sirmon et al., 2007, 2011). This leads
us to another piece of the puzzle worth exploring in a more
nuanced manner.
We draw on resource orchestration theory (Sirmon et al., 2007,
2011) and propose the notion of “natural resource orchestration”
according to which green resources and capabilities (e.g., GIC and
ambidextrous green innovation) only influence performance when
they are structured, bundled, and leveraged in a way proper for a spe-
cific market. At the heart of the resource orchestration view is
“resource mobilization,” in which mobilized resources are integrated
into an effective structure to ensure greater alignment, coordination,
and direction for a particular use (Asiaei et al., 2021). The main chal-
lenge in implementing resource orchestration lies in understanding
how managers can mobilize and structure resources (Miao et al.,
2017). Drawing from the green innovation literature, the promotion
of ambidextrous green innovation in the organization is considered
one possible avenue through which managers can mobilize resources.
More specifically, we treat ambidextrous green innovation as a chan-
nel through which the organization's strategic green knowledge
resources (i.e., GIC) are mobilized more effectively to generate real
value for the company. Figure 1 shows the proposed theoretical
model of the current study.

372
2.1 | Green intellectual capital and environmental
performance
It is widely acknowledged that organizations' involvement in green
management and environmental initiatives can diminish production
waste and augment productivity. It also charges relatively high
prices for green products, enhances corporate images, and therefore
may bring a positive effect on the company's competitive advan-
tages under the trends of popular environmentalism consciousness
of consumers and strict international regulations of environmental
protection (Berry & Rondinelli, 1998; Porter & van der Linde, 1995;
Shrivastava, 1995). Chuang and Huang (2018) argue that greater
environmental performance derives from the extent to which an
organization is actively engaged in accumulating green-related
knowledge and resources. Considering the internal implications, GIC
may help minimize environmental costs and promote employees'
professional knowledge and awareness of green thoughts and
energy-saving technologies. In the remainder of this section, we
define the concepts of GIC and environmental performance and
propose our first hypothesis.
Borrowing mainly from Chen (2008) and Chang and Chen (2012),
this study defines GIC as “the total stock of all kinds of intangible assets,
knowledge, capabilities, and relationships, etc. about environmental pro-
tection or green innovation of both the individual and organization levels
within a company” (Chang & Chen, 2012, p. 77). Viewed this way, GIC
consists of three dimensions, namely green human capital, green
structural capital, and green relational capital (Chen, 2008). While
human-centered (human) capital refers to the features of human
resources such as know-how, knowledge, experience, and qualifica-
tion, organization-centered (structural) capital embraces all of the
non-human storehouses of knowledge inside the company such as
documents, databases, process descriptions, plans, and the company's
intellectual properties (Asiaei et al., 2018). Likewise, organizations
have recently realized the importance of environmental knowledge
embedded in the workforce for fostering green innovation and green
management as a response to external environmental pressures
(Chang & Chen, 2012). As such, green human capital is defined as “the
summation of employees' knowledge, skills, capabilities, experience, atti-
tude, wisdom, creativities, and commitments, etc., about environmental
protection or green innovation” (Chen, 2008, p.277).
Along the same line, in light of today's concerns on environmental
issues, environmental know-how and culture embedded in organiza-
tions are at the top of the agenda for many companies, whereby they
would be able to develop and execute environmentally oriented inno-
vative strategies to grasp new opportunities or to achieve sustained
competitive advantages (Chang & Chen, 2012). In this respect, green
structural capital is defined as “the stocks of organizational capabilities,
organizational commitments, knowledge management systems, reward
systems, information technology systems, databases, managerial mecha-
nisms, operation processes, managerial philosophies, organizational cul-
ture, company images, patents, copyrights, and trademarks, etc. about
environmental protection or green innovation within a company” (Chen,
2008, p. 277).
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ASIAEI ET AL.
The value stemming from an organization's relationships and con-
nections with its key stakeholders such as customers, suppliers, dis-
tributors, partners, and the local community is deemed to be
relationship-centered (i.e., relational) capital (Dzinkowski, 2000;
Edvinsson & Malone, 1997; Roos & Roos, 1997). The company's key
stakeholders and external parties provide resources and other support
to grow and survive. Nevertheless, nowadays, environmentalism is at
the forefront for organizations, stakeholders, and external parties.
Given the importance of such a green trend, organizations seek to
acquire more resources to promote their external relationships con-
cerning mutual environmental interests (Chang & Chen, 2012). In this
sense, green relational capital is defined as “the stocks of a company's
interactive relationships with customers, suppliers, network members, and
partners about corporate environmental management and green innova-
tion, which enables it to create fortunes and obtain competitive advan-
tages” (Chen, 2008, p. 278).
There is a lack of consensus on the exact definition,
operationalization, and scope of the environmental performance
(Gray & Milne, 2013; Ilinitch et al., 1998). While some studies provide
instead a narrow view of environmental performance emphasizing
environmental effects, like emission and waste disposal (Burnett &
Hansen, 2008; Mungai et al., 2020), others advocate broader defini-
tions building upon both environmental ratings of firms and multi-
dimensional, subjective evaluations developed by external groups
(Henri & Journeault, 2010; Lisi, 2015). Judge and Douglas (1998,
p. 245) describe environmental performance as “a firm's effectiveness
in meeting and exceeding society's expectations with respect to concerns
for the natural environment.” Our study adopts this conceptualization
since it enjoys broader scope in which the company's capability to
build coordinated interactions with a wide range of green-intensive
stakeholders is also considered in parallel with environmental impacts
(Henri & Journeault, 2010; Lisi, 2015).
We develop our first hypothesis for the influence of GIC on envi-
ronmental performance. First, green human capital is instrumental in
promoting environmental performance for companies with high mana-
gerial environmental considerations (Song et al., 2020). Prior research
acknowledges that the development of green human capital triggers a
positive interaction between corporate environmental ethics and
(1) green relationship learning, and (2) green innovation performance
(Asiaei, Bontis, Alizadeh, et al., 2022). Huang and Kung (2011) argue
that green human capital paves the way for the entity's adherence to
international environmental standards, creating value coping with the
growing environmental demands of consumers. Asiaei, Jusoh, Barani,
et al. (2022) document that green human capital equips a company to
successfully manage its green agenda, which, in turn, yields enhanced
environmental performance. In the same vein, Asiaei, Jusoh, Barani,
et al. (2022) observe that workforce knowledge, know-how, compe-
tencies, attitude, and inventiveness about environmental conservation
could ultimately support companies to promote their environmental
performance.
Second, green human capital alone is most likely insufficient to
bring about desired pro-environment outcomes, specifically without
the support of necessary organizational structure, information

ASIAEI ET AL.
systems, and strategies—green structural capital (Jardon & Dasilva,
2017). Widener (2006) argues that companies fail to benefit from
their human capital without robust systems and procedures. In effect,
superior green structural capital paves the way for an encouraging
atmosphere that inspires and motivates the organizational members
to contribute to environmental protection, thereby improving environ-
mental performance (Asiaei, Jusoh, Barani, et al., 2022). Wang et al.
(2021) point out that environmentally friendly companies will likely
develop a stable pro-environmental structure and organizational capa-
bilities to respond to climate calls.
Finally, in a similar vein, green relational capital helps promote
collaborative relationships with an organization's various external bod-
ies who advocate environmental protection to improve the image and
reputation of the company (Chuang & Huang, 2018). According to
Dickel et al. (2018), green collaborations foster environmental con-
sciousness among partners to bring about superior environmentally
friendly behaviors. Wang et al. (2020) argue that green relations
among the company's partners, for example, customers, suppliers, net-
work members, and competitors, have gained much appreciation now-
adays as the major determinants of environmental responsibility and
pro-environment performance in the organizational context. Given all
the preceding discussions that articulate the plausible associations
between three elements of GIC and environmental performance, we
put forward the following hypothesis:
Hypothesis 1. Green intellectual capital components,
including (a) green human capital, (b) green structural
capital, and (c) green relational capital, are positively
associated with environmental performance.
2.2 | Green intellectual capital and ambidextrous
green innovation
Green innovation is concerned with innovation in products, services,
technologies, strategies, and managerial styles to promote sustainable
development (Li et al., 2018; Rennings, 2000). To create value in
today's sustainable world, where environmental considerations are
the top priority, companies must constantly formulate and execute
green innovation strategies for energy saving, pollution prevention,
and environmental quality improvement (Wang et al., 2021). To this
end, companies tend to involve in exploitative and exploratory green
innovations simultaneously, whereby they can successfully cope with
environmental challenges. Exploitative innovation is the innovation
that refines and applies existing knowledge and technology, whereas
exploratory innovation is the innovation that explores new knowl-
edge, discovers new opportunities, and develops new technologies
(Cao et al., 2021). According to the central notion of ambidexterity
theory (Tushman & O'Reilly, 1996), organizations need to find a
proper balance between exploitative and exploratory practices for
promoting their performance.
Successful companies are strongly oriented toward simulta-
neously engaging in exploitative and exploratory innovation to
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373
achieve ambidextrous innovation. Ambidextrous innovation equips
companies to explore new opportunities while promoting existing
capacities, which, in turn, can bring about a competitive advantage for
the organization. More specifically, exploitative green innovation
involves utilizing existing environmental knowledge, capabilities, and
practices to promote existing green products and structures (Chen
et al., 2014). On the other hand, exploratory green innovation repre-
sents new information, knowledge, and skills in relation to the envi-
ronmental agenda to foster new green markets and products. The
innovation literature recently highlights that resource orchestration
plays a role in stimulating firms' exploitative and exploratory green
innovations (Wang et al., 2020). Along the same line, Asiaei, Bontis,
Alizadeh, et al. (2022) propose the “natural resource orchestration”
notion through which a significant synergy can occur among a range
of green assets (e.g., green human, structural, and relational capital) in
the organization. This synergy paves the way for sharing, trans-
forming, and harmonizing resources and capabilities across the busi-
ness. This, in turn, enables the company to simultaneously explore
new opportunities as well as promote existing capacities that are criti-
cal for innovation (Asiaei et al., 2020).
The first dimension of GIC is green human capital, a resource con-
cerned with the considerations and reflections of the organizational
members about the company's social good and sustainability obliga-
tions (Asiaei, Jusoh, Barani, et al., 2022). Prior literature, in general,
acknowledges that one of the key drivers for innovation is an organi-
zation's capacity in terms of its human capital (Diebolt & Hippe,
2019). For instance, in particular, top managers' ethical principles and
thoughts about the environmental agendas play a large part in stimu-
lating green innovation in the company (Cao et al., 2021). Employees
who advocate the natural environment are most likely to explore and
grasp any sustainability-related opportunities to present themselves
and provide alternative solutions to take advantage of such opportu-
nities. Environmentally committed managers are more likely to uphold
their commitment to the natural environment by promoting and
implementing environmental innovation initiatives. For example,
Wang et al. (2021) observe that CEO environmentally responsible
leadership drives engagement in eco-innovation.
Organizations with more green structural capital, which manifests
itself in superior pro-environmental structure and contemporary envi-
ronmental technologies and strategies, are likely to excel in ambidex-
trous green innovation. Companies' innovative capability of
environmental technology and business operations plausibly needs a
well-aligned innovative eco-control mechanism, such as ambidextrous
green innovation, to gain the maximum benefit from green structural
capital (Nadeem et al., 2021). Green structural capital can support
managers to handle to what extent companies can reduce environ-
mental pollution by redesigning their production processes and
increasing their green productivity. The third dimension of GIC is
green relational capital, which is concerned with a company's green
relations with various stakeholders such as customers, suppliers, net-
work members, and partners (Chen, 2008). Prior literature widely
acknowledges that the factor of stakeholders' concerns and attitudes
concerning the natural environment is one of the major determinants

374
that can inspire corporate environmentalism, for example, eco-innova-
tion, within a company (Acebo et al., 2021; Garcés-Ayerbe et al.,
2019; Zhang & Zhu, 2019).
With all the above-mentioned arguments in favor of the presence
of possible links between three elements of GIC and ambidextrous
green innovation use, we develop the following hypothesis:
Hypothesis 2. Green intellectual capital components,
including (a) green human capital, (b) green structural
capital, and (c) green relational capital, are positively
associated with ambidextrous green innovation.
2.3 | Ambidextrous green innovation and
environmental performance
Prior research shows that green innovation contributes to organiza-
tional success, including enhanced environmental performance
(Kraus et al., 2020; Singh et al., 2020). Along the same line, previous
studies demonstrate that an ambidextrous company, which is supe-
rior in engaging in both exploitative and exploratory innovations,
tends to achieve better environmental performance (Lee et al.,
2018; Lin & Ho, 2016). The assumption that ambidexterity can
improve environmental performance draws upon the central premise
of the ambidexterity theory, according to which “firms capable of
simultaneously pursuing exploitation and exploration are more likely to
achieve superior performance than firms emphasizing one at the
expense of the other” (Raisch & Birkinshaw, 2008, 392). Organiza-
tions primarily oriented around exploitation tend to be proficient
enough to successfully deal with environmental issues by amending
their operations and procedures (Benner & Tushman, 2003). On the
other hand, exploratory-oriented companies have a strong propen-
sity to promote technological development by initiating novel prod-
ucts and services that can lead to superior environmental
performance (Lin & Ho, 2016).
Concerning a company targeting both process enhancement and
product innovation to improve environmental performance, an effec-
tive synthesis of exploitation and exploration views as complementary
skills of the organization according to which exploitation may be con-
ducive to exploration and vice versa. (Gupta et al., 2006; Lin & Ho,
2016). An ambidextrous firm can successfully translate its know-how
to exploitative and exploratory actions of environmental practices. An
organization's capability to effectively attain better environmental
performance depends on its ambidextrous ability since an adaptive
company is supposed to “exploit existing competencies and explore
new ones and, more importantly, that these two facets of organiza-
tional learning are inseparable” (Floyd & Lane, 2000, 155).
Given the preceding arguments, therefore, we propose the fol-
lowing hypothesis:
Hypothesis 3. There is a positive association between
ambidextrous green innovation and environmental
performance.
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ASIAEI ET AL.
2.4 | The mediating effect of ambidextrous green
innovation
Hart and Dowell (2011) challenge the direct relationship between sus-
tainable development practices and organizational performance. This
agenda inspires the recent efforts to concentrate more on shaping the
association rather than what is required to connect environmental
practices, strategies, or resources, for example, GIC, with sustainability
performance (Asiaei, Bontis, Alizadeh, et al., 2022; Lisi, 2015, 2018;
Wijethilake, 2017). To better understand the GIC-environmental per-
formance relationship, we propose that ambidextrous green innova-
tion plays a mediating role in the foregoing association. We build our
central assumption on prior literature indicating that ambidextrous
organizations can effectively translate their various knowledge into
exploitation and exploration in response to external changes in the
environment (Lin & Ho, 2016). This is how we build upon the notion
of “natural resource orchestration” and propose that a company
can take full advantage of its different green resources and
capacities only when they are structured, bundled, and managed
effectively.
According to Helfat et al. (2007), “resource mobilization is at the
heart of the resource orchestration perspective according to which
mobilized resources are integrated into an effective structure to sup-
port better harmonization, synchronization, and direction for specific
utilization.” The major obstacle in executing resource orchestration is
finding the channels whereby the management can mobilize and
structure the organization's underlying assets (Miao et al., 2017). In
this respect, we inspire by the ambidexterity literature and put for-
ward that the promotion of green ambidexterity is one plausible ave-
nue through which managers can foster resource mobilization (Lin &
Ho, 2016, 2021). All the preceding arguments lead us to the following
hypothesis:
Hypothesis 4. Ambidextrous green innovation medi-
ates the relationship between GIC components, includ-
ing (a) green human capital, (b) green structural capital,
and (c) green relational capital and environmental
performance.
3 | METHODOLOGY
3.1 | Sustainability status in the Iranian context
The Iranian government established the National Committee for Sus-
tainable Development in 1992 as a signatory to the declarations. The
primary goal of this initiative was to develop and implement policies
that adhered to the Rio Earth Summit declarations. For example, the
committee intended to create a unified framework to meet the
requirements of Summit Article 21. One of the article's main points
emphasizes the importance of education in increasing understanding
and improving capabilities supporting long-term development goals
(Bahaee et al., 2014). Implementing the preceding directives issued by
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ASIAEI ET AL. 375

the Iranian Department of Environment is critical in dealing with the
nation's economic, social, and environmental challenges (Valinejad &
Rahmani, 2018). In parallel with executing strategies for fostering
these initiatives through public awareness campaigns and public edu-
cation, the government launched two national initiatives, namely the
National Plan for Environmental Protection and the National Strategy
for Sustainable Development (Bahaee et al., 2014). According to the
Environmental Performance Index ranking, Iran is currently ranked
83rd among 178 countries (Afshar Jahanshahi et al., 2020). Despite a
satisfactory level of environmental awareness among Iranian busi-
nesses, the nation still has undergone massive pollution and green-
house gas emissions, forests loss, and water and energy resources
waste (Haghighi et al., 2021). Relying on the UNESCO Green Citizens
Project, Iran has embarked on some green initiatives and training pro-
grams for businesses to boost participation and involvement in pro-
moting innovative green practices and eco-friendly products (Afshar
Jahanshahi et al., 2020). For instance, the government has recently
allocated approximately €500 million from the National Development
Fund to develop green energy (Eslamizadeh et al., 2020).
3.2 | Sample and data collection
We consider the TSE an ideal sampling frame since it is Iran's primary
stock exchange. Further, virtually all the TSE organizations are consid-
ered large corporations that typically possess greater capacities to
engage in sustainability practices (Asiaei, Bontis, Barani, et al., 2022).
Moreover, the complete information of the organizations is readily
available as the mailing list provided by the TSE directory contains
comprehensive data of all the Iranian publicly listed companies, such
as managing directors' names, addresses, contact numbers, types of
product/services manufactured/provided, number of employees,
years of establishment, and so forth (Asiaei & Jusoh, 2017). It is
acknowledged that a multi-industry sample enables the researchers to
analyze the inter-industry effects, thereby broadening the study's gen-
eralization (Bontis, 1998). As such, the current study's target popula-
tion is public-listed companies in Iran, in which there are more than
300 companies with a combined market capitalization of US$226 bil-
lion. There is no sampling, implying that we consider the entire popu-
lation as the research sample due to population constraints and
having a multi-industry sample to obtain more valid and reliable
results (Asiaei & Jusoh, 2017). This study used a survey to collect
information in Iran, where there are no secondary sources such as
Fortune's Most Admired Companies and Kinder, Lydenberg, and
Domini (Asiaei, Bontis, Alizadeh, et al., 2022). The key informants in
the survey are CFOs of all Iranian publicly listed firms.
Table 1 shows the demographic profile of our sample, according
to which the manufacturing sector represents the largest industry in
Iran, with 70% of the responding companies. Table 1 also demon-
strates our sample composition regarding the number of employees,
sales volume, and age. To ensure the sample's representativeness, we
perform an independent sample t test in which the data are divided
into two groups, namely early and late responses. Findings indicate no
significant difference between early and late responses concerning
the main variables.
3.3 | Measures
We largely adopt those well-defined and validated scales by develop-
ing all the measurement items based on a thorough review of the liter-
ature in the field of study. We conducted a pretest by administering

T A B L E 1 Demographics profile
Profile Categories Frequency Percent Cumulative percent
(organization)
Type of the industry IT 8 8% 8%
Bank 17 16% 24%
Agriculture 6 6% 30%
Manufacturing 74 70% 100%
105
No of employees
< 100 13 12% 12%
100–200 42 40% 52%
201–400 29 28% 80%
401–600 12 11% 91%
> 600 9 9% 100%
105
Sales/turnover Less than 500 56 52.8% 52.8%
(based on billion riyals) 501–1000 12 11.3% 64.1%
1001–1500 5 4.7% 68.8%
1501–2000 4 3.8% 72.6%
More than 2000 28 26.6% 100%
105

376
the survey to 5 academics and 10 managers to evaluate their feed-
back regarding the questionnaire's understanding, wording, and gen-
eral structure. We use a 7-point Likert scale for measuring the survey
items. The composition of each construct is shown in Table 2 and
briefly described in turn.
GIC - Considering the existing literature in IC settings
(e.g., Chang & Chen, 2012; Chen, 2008), we borrow a total number of
14 items to measure all the three factors of GIC, namely green human
capital (five items), green structural capital (six items), and green rela-
tional capital (three items).
Ambidextrous green innovation - We borrow the scale used by
Wang et al. (2020), which comprises eight items (four items for
exploitative green innovation and four items for exploratory green
innovation) and are used to measure ambidextrous green innovation.
Environmental performance - Regarding the dependent variable,
we rely on the perceptual instrument for measuring environmental
performance consistent with prior management accounting literature
(e.g., Asiaei, Jusoh, Barani, et al., 2022; Henri & Journeault, 2010;
Judge & Douglas, 1998).
We also consider company size and industry type as the control
variables for this study that may affect environmental performance
(Henri & Journeault, 2010). The firm size reflects past success and can
affect organizational outcomes (Aldrich & Auster, 1986). Faraji et al.
(2022) point out that larger companies may significantly benefit from
intellectual capital. Similarly, organizations may vary from sector to
sector in green resources and capabilities while benefiting from such
value drivers (Asiaei, Bontis, Alizadeh, et al., 2022).
3.4 | Descriptive information and diagnostics tests
We use Multigroup Analysis (MGA) in PLS path modeling to ensure
the sample's representativeness. The data have been divided into two
almost equal groups, that is, early responses (53) and late responses
(52), based on the questionnaires' date. This method is a non-
parametric significance test for the difference of group-specific results
that build on PLS-SEM bootstrapping results. The result is significant
at the 5% probability of error level if the p value is smaller than 0.05
or larger than 0.95 for a certain difference in group-specific path coef-
ficients (Henseler et al., 2009; Sarstedt et al., 2011). Findings indicate
no significant difference between early and late respondents for the
main variables of interest in the current study. Table 3 shows the
results of MGA.
We also assess the variance inflation factor (VIF) test to address
the concern of common method bias in the current research. Kock
and Lynn (2012) proposed the full collinearity test as a comprehensive
procedure for assessing both vertical and lateral collinearity at the
same time. VIFs are generated for all latent variables in a model using
this procedure, which is fully automated by the PLS software. The
presence of a VIF of more than 3.3 is proposed as a sign of pathologi-
cal collinearity and a sign that a model may be contaminated by com-
mon method bias. As a result, if all VIFs from a full collinearity test are
equal to or less than 3.3, the model is free of common method bias.
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ASIAEI ET AL.
Since all values are less than 3.3 in our analysis, we conclude that the
common methods variance is not an issue in the present study.
4 | DATA ANALYSIS
This study applied PLS for data analysis by SmartPLS, version 3 (Ringle
et al., 2015). PLS-SEM is suitable for analysis because it enables simul-
taneous analysis of the measures or constructs and the underlying
structural model, making it appropriate for exploratory, survey-based
analyses (Hair et al., 2012). Furthermore, it shows higher robustness
even for smaller, not normally distributed samples (Ernst et al., 2011),
and it is suitable for reflective models. The first phase assesses the
measurement model to evaluate the constructs' reliability and validity,
followed by the second phase, that is, testing the structural model to
test the hypotheses (Hair et al., 2018).
4.1 | Measurement model
Table 4 provides a rudimentary analysis of the validity and reliability
of item constructs. The PLS output concerning the measurement
model confirms these rudimentary tests by showing high (greater than
0.708) outer loadings on their respective latent variables of all items.
Furthermore, the strong measure of composite reliability for all latent
variables reinforces the alpha scores by showing satisfactory reliability
(Nunnally, 1978). According to Table 4, the convergent quality of the
models is tested by looking at the details of the average variance
extracted (AVE). The AVE that is more than 0.50 reflects ample con-
vergent validity (Hair et al., 2017, 2018, 2019).
Discriminant validity is the extent to which a construct is truly
distinct from other constructs by empirical standards. In this regard,
Fornell-Larcker's (Table 5) criterion estimates the cross loadings at the
indicator level and shows that all indicators load on the intended con-
struct (Hair et al., 2017). Additionally, Henseler et al. (2015) propose
assessing the correlations' Heterotrait-Monotrait ratio (HTMT) instead
of cross loadings due to lack of good performance. For this purpose,
Henseler et al. (2015) suggest different thresholds the HTMT statistic
should not exceed, depending on whether the constructs are concep-
tually similar (0.90). Concerning discriminant validity, Table 6 shows
that only one relationship is marginally above 0.90 (green exploitation
and green exploration components of ambidextrous green innovation),
implying that the discriminant validity is sufficient for our model. To
sum up, the findings of the PLS calculation model show that the effi-
ciency and integrity of all constructs are satisfactory.
4.2 | Structural model
A structural model of the PLS is estimated for testing the hypotheses.
PLS uses an iterative estimation algorithm with a sequence of simple
or multiple OLS regression analyses (Chin, 1998); path coefficients
can thus be represented as constant regression coefficients in the
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ASIAEI ET AL. 377

TABLE 2 Variable components and outer loadings

Green intellectual capital Ambidextrous green innovation

Envir-perf
Questions GHC GRC GSC GER GET EP
The productivity and contribution of employees concerning 0.895
environmental protection in our organization is better
than those of its major competitors.
The employees' competence of environmental protection in 0.881
our organization is better than that of its major
competitors.
The products and services of environmental protection 0.874
provided by the employees of our organization are better
than those of its major competitors.
The cooperative degree of teamwork pertaining to 0.896
environmental protection in our organization is more than
that of its major competitors.
Managers in our organization can fully support their 0.890
employees to achieve the goals of environmental
protection.
Our organization designs its products or services in 0.874
compliance with the environmental desires of its
customers.
Our organization's cooperative relationships about 0.892
environmental protection with its upstream suppliers and
downstream clients are stable.
Our organization has stable and cooperative relationships 0.894
about environmental protection with its strategic
partners.
The management system of environmental protection in our 0.886
organization is better than that of its major competitors.
Our organization's profit earned from environmental 0.891
protection activities is more than that of its major
competitors.
Our organization's ratio of environmental protection 0.885
investments in R&D to its sales is more than that of its
major competitors.
Innovations about environmental protection in our 0.915
organization are more than those of its major competitors.
Investments in environmental protection facilities in our 0.879
organization are more than those of its major competitors.
The environmental knowledge management system in our 0.840
organization is favorable for the accumulation and sharing
of environmental management knowledge.
Our company actively adopts new green products, 0.913
processes, and services.
Our company actively exploits new green products, 0.859
processes, and services.
Our company actively discovers new green markets. 0.905
Our company actively enters new green technology. 0.909
Our company actively improves green products, processes, 0.907
and services.
Our company actively adjusts current green products, 0.899
processes, and services.
Our company actively strengthens current green market. 0.902
Our company actively strengthens current green 0.858
technology.

(Continues)
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378 ASIAEI ET AL.

TABLE 2 (Continued)

Green intellectual capital Ambidextrous green innovation

Envir-perf
Questions GHC GRC GSC GER GET EP
Our organization complies with environmental regulations 0.864
(i.e., emissions, waste disposal).
Our organization limits environmental impact beyond 0.885
compliance.
Our organization prevents and mitigates environmental 0.864
crises (i.e., significant spills).
Our organization educates employees and the public about 0.847
the environment.

GHC = green human capital, GRC = green relational capital, GSC = green structural capital, GER = green exploration, GET = green exploitation,
EP = environmental performance.

TABLE 3 Result of PLS-MGA

process is similar to evaluating formative measurement models, but
Path coefficients-diff p value (early the exogenous constructs' latent variable scores are used to calculate
Relations (jearly to latej) vs late)
the VIF values (Hair et al., 2017). VIF values above 5 indicate potential
Green human capital 0.037 .427 collinearity issues among the predictor constructs, but collinearity
- > environmental
problems can also occur at lower VIF values of 3 to 5 (Becker et al.,
performance
2015; Mason & Perreault, 1991; Ringle et al., 2015). The analysis
Green structural capital 0.023 .542
- > environmental shows that all values are less than 5 in this study.
performance The R2 measures the variance explained in each endogenous con-
Green relational capital 0.435 .945 struct and thus measures the model's explanatory power (Shmueli &
- > environmental Koppius, 2011). According to Table 7, the R2 values range from 0.565
performance to 0.586, indicating moderate to the substantial variance explained
Green human capital 0.062 .652 (Hair et al., 2011; Henseler et al., 2009).
- > ambidextrous green
In addition, we use ƒ2 effect size to evaluate the change in the R2
innovation
value when a specified exogenous construct is omitted from the
Green structural capital 0.034 .576
model. Effect size values of less than 0.02 indicate no effect (Cohen,
- > ambidextrous green
innovation 1988). The values for this study are more than 0.02. Another means
Green relational capital 0.100 .299 of measuring the predictive performance of the PLS route model is by
- > ambidextrous green estimating the value Q2 (Geisser, 1974; Stone, 1974). This factor
innovation determines the intensity of interdependency between the variables,
Ambidextrous green 0.405 .106 according to which the values 0.02, 0.15, and 0.35, respectively, show
innovation small, intermediate, and high effect benchmarks of one variable on
- > environmental
another. Table 8 presents the Q2 values of this study that range from
performance
0.518 to 0.722, thereby reflecting considerable predictive relevance.
Industry - > environmental 0.056 .909
performance To evaluate the model and its fitness, the standardized root-

Size - > environmental 0.006 .566 mean-square residual (SRMR) is used in this study. The SRMR is the
performance root-mean-square discrepancy between the observed and model-
Early response (n = 53) - implied correlations. Because the SRMR is an absolute measure of fit,
late response (n = 52) a value of zero indicates perfect fit (Hu & Bentler, 1998). In the CB-
SEM algorithm, the SRMR value should be less than 0.08 or 0.10, as
GHC = Green Human Capital, GRC = Green Relational Capital,
GSC = Green Structural Capital, GER = Green exploration, GET = Green suggested by Hu and Bentler (1998), which is less than 0.08 for this
exploitation, EP = Environmental Performance. study.

structural model. Since PLS makes no distributional predictor assump-

tions, bootstrapping is used to determine the statistical importance of 4.3 | Results
increasing the path coefficient (Hair et al., 2017).
Collinearity must be tested before evaluating the structural rela- As mentioned earlier, the statistical method used in this study is struc-
tionships to ensure it does not bias the effects of regression. This tural equation modeling, which uses the fitness of the structural
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ASIAEI ET AL. 379

TABLE 4 Construct reliability and validity

Cronbach's alpha rho_A Composite reliability Average variance extracted (AVE)

Green intellectual capital
- Green human capital .858 .859 0.873 0.722
- Green structural capital .863 .865 0.875 0.699
- Green relational capital .784 .786 0.837 0.706
Ambidextrous green innovation .887 .887 0.892 0.732
- Green exploitation .856 .858 0.875 0.760
- Green exploration .839 .840 0.863 0.724
Environmental performance .808 .808 0.842 0.668

GHC = green human capital, GRC = green relational capital, GSC = green structural capital, GER = green exploration, GET = green exploitation,
EP = Environmental performance.

TABLE 5 Fornell-Larcker criterion

GHC GRC GSC GA GET GER EP
Green intellectual capital
- Green human capital 0.895
- Green relational capital 0.875 0.887
- Green structural capital 0.874 0.874 0.883
Ambidextrous green innovation 0.877 0.824 0.875 0.901
- Green exploitation 0.868 0.874 0.869 0.894 0.917
- Green exploration 0.873 0.822 0.867 0.833 0.874 0.897
Environmental performance 0.842 0.830 0.763 0.851 0.772 0.817 0.865

GHC = green human capital, GRC = green relational capital, GSC = green structural capital,
GER = green exploration, GET = green exploitation, EP = environmental performance.

TABLE 6 Heterotrait-Monotrait ratio

GHC GRC GSC GA GET GER EP
(HTMT)
Green intellectual capital
- Green human capital
- Green relational capital 0.782
- Green structural capital 0.634 0.777
Ambidextrous green innovation 0.725 0.676 0.749
- Green exploitation 0.632 0.682 0.730 0.764
- Green exploration 0.648 0.701 0.637 0.654 0.670
Environmental performance 0.653 0.706 0.650 0.758 0.665 0.681

EP = environmental performance, GER = green exploration, GET = green exploitation, GHC = green
human capital, GRC = green relational capital, GSC = green structural capital, GA = green ambidexterity.

TABLE 7 R2 statistics. If the absolute t value of the test statistic is greater than
1.96 (the critical value at the level of 0.05), then at a 95% confidence
Endogenous latent variables R square R square adjusted
level, the path and path coefficient of the target is significant, and oth-
Ambidextrous green innovation .576 .576
erwise, the path coefficient is not significant. It is important to note
- Green exploitation .588 .587 that the size of the path coefficient indicates the strength of the rela-
- Green exploration .586 .586 tionship, and its sign represents the type of relationship (direct or indi-
Environmental performance .565 .563 rect). In addition to Figure 2, a summary of the results obtained from

GER = green exploration, GET = green exploitation, EP = environmental
performance.
equation model to test the research hypotheses. To investigate the
hypotheses, the path coefficients are calculated first, followed by
determining the significance of these coefficients through the t test
the fitting of the research model is presented in Table 9. According to
the hypotheses testing, the routes with an absolute t value greater
than 1.96 are significant.
Mediation occurs when a third mediator variable intervenes
between two other related constructs. More precisely, a change in the
exogenous construct causes a change in the mediator variable,
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380 ASIAEI ET AL.

resulting in a change in the endogenous construct in the PLS path According to Table 9, H1 is not accepted because the respective
model. A mediator variable governs the nature (i.e., the underlying T values between all three dimensions of GIC (green human, structural,
mechanism or process) of the relationship between two constructs. and relational capital) and environmental performance are not signifi-
Table 10 shows the indirect effects of variables. Furthermore, the cant (p > 0.10). On the other hand, the relationships between all three
bootstrap confidence interval of 95% is greater than zero for the indi- dimensions of GIC and ambidextrous green innovation (H2) are signifi-
rect effect (Baron & Kenny, 1986). The results, therefore, demonstrate cant (t values are more than 1.96 and p values are less than 0.05). Fur-
that there is a full mediation among variables. ther, H3 is accepted as a positive association between ambidextrous
green innovation and environmental performance (t value = 4.93 and
p value = 0.00). These results indicate a significant mediating effect of
TABLE 8 Q2 (predictive criteria values) ambidextrous green innovation in the relationship between GIC and
environmental performance. As a further test of H2 and H3, we pro-
Latent variable SSO SSE Q2
vide the statistics for the full mediating model (see Table 10).4 These
Green intellectual capital
results confirm that GIC dimensions are associated with environmen-
- Green human capital 525.000 180.587 .656
tal performance only through the ambidextrous green innovation
- Green structural capital 630.000 217.743 .654
channel, implying that ambidextrous green innovation plays a full
- Green relational capital 315.000 151.759 .518 mediation role in the GIC-environmental performance relationship.
Ambidextrous green innovation 840.000 233.110 .722
- Green exploitation 420.000 137.699 .672
- Green exploration 420.000 159.500 .620 5 | DI SCU SSION AND CO NCLUSIO NS
Environmental performance 420.000 192.006 .543
Nowadays, green knowledge assets and green innovation are of great
GHC = green human capital, GRC = green relational capital, GSC = green
structural capital, GER = green exploration, GET = green exploitation, significance to enterprises' sustainable development goals. We draw
EP = environmental performance. upon the “natural resource orchestration” approach to investigate a

FIGURE 2 Assessment of the structural model

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ASIAEI ET AL. 381

TABLE 9 Path coefficients

Hypothesis T statistics (jO/STDEVj) p value Significance (p < 0.05)?

Green human capital - > environmental performance H1 .148 .882 NO
Green structural capital - > environmental performance 1.135 .257 NO
Green relational capital - > environmental performance .725 .468 NO
Green human capital - > ambidextrous green innovation H2 3.309 .001 Yes
Green structural capital - > ambidextrous green innovation 2.140 .032 Yes
Green relational capital - > ambidextrous green innovation 5.576 .000 Yes
Ambidextrous green innovation - > environmental H3 4.820 .000 Yes
performance
Industry - > environmental performance Control V. .276 .782 NO
Size - > environmental performance 1.731 .084 NO

Note: Entries in italics are the control variables for the present study.
GHC = green human capital, GRC = green relational capital, GSC = green structural capital, GER = green exploration, GET = green exploitation,
EP = environmental performance.

TABLE 10 Specific indirect effects

Hypothesis T statistics (jO/STDEVj) p value Significance (p < .05)

Green human capital - > ambidextrous green innovation- 2.740 .006 Yes
> environmental performance
Green structural capital - > ambidextrous green innovation- 2.112 .035 Yes
> environmental performance
Green relational capital - > ambidextrous green innovation- 3.346 .001 Yes
> environmental performance

GHC = green human capital, GRC = green relational capital, GSC = green structural capital, GER = green exploration, GET = green exploitation,
EP = environmental performance.

model in which GIC elements and ambidextrous green innovation trig-
ger a synergy in favor of environmental performance. Specifically, we
test the mediating role of ambidextrous green innovation in the rela-
tionship between GIC elements and environmental performance. We
test our promise using primary data collected from 105 CFOs of pub-
licly listed organizations in Iran and employing SEM based on PLS
(SmartPLS, version 3) as the data analysis tool.
The results are generally in harmony with the expectations and
offer nuanced insights into the relationships between GIC and envi-
ronmental performance, particularly the role of ambidextrous green
innovation in mediating that relationship. We propose four hypothe-
ses to pursue the study objectives. Interestingly, our results show that
all the three GIC components are indirectly associated with environ-
mental performance and through the mediating mechanism of ambi-
dextrous green innovation. The findings show no direct relationship
between GIC elements (i.e., green human, structural, and relational
capital) and environmental performance. This observation is important
as it shows that Iranian companies face some limitations concerning
the maintenance of green relationships with upstream and down-
stream suppliers, customers, and strategic partners to warrant that all
groups benefit in the market. This unexpected finding contrasts with
that of Chen (2008) and can be attributable to the different features
of companies' relational capital, such as differences in an organiza-
tion's interactions with external parties, in the Iranian setting in com-
parison with the developed context (Asiaei, Jusoh, Barani, et al., 2022).
The results concerning the second hypothesis show a positive
association between GIC components and ambidextrous green inno-
vation. This implies that higher levels of green resources in the form
of green human, structural, and relational capital are instrumental in
fostering ambidextrous green innovation in the organization. This is in
harmony with recent innovation literature that highlights the role of
resource orchestration in stimulating firms' exploitative and explor-
atory green innovations (Wang et al., 2020). This finding also corrobo-
rates the idea of Asiaei, Bontis, Alizadeh, et al. (2022). They propose
the “natural resource orchestration” notion, according to which a sig-
nificant synergy can be occurred among a range of green assets in the
organization, thereby paving the way for sharing, transformation, and
harmonization of resources and capabilities across the business. This,
in turn, enables the company to simultaneously explore new opportu-
nities as well as promote existing capacities that are critical for inno-
vation (Asiaei et al., 2020).
Furthermore, the results demonstrate a positive indirect relation-
ship between ambidextrous green innovation and environmental per-
formance. This result is in harmony with prior studies (e.g., Lee et al.,
2018; Lin & Ho, 2016; Úbeda-García et al., 2022). This finding shows
that an ambidextrous organization, which is superior in engaging in
exploitative and exploratory innovations, achieves better environmen-
tal performance. This result corroborates the central premise of the
ambidexterity theory, according to which “firms capable of simulta-
neously pursuing exploitation and exploration are more likely to achieve

382
superior performance than firms emphasizing one at the expense of the
other” (Raisch & Birkinshaw, 2008, 392).
The most interesting finding of this study is related to the last
hypothesis in which ambidextrous green innovation appears as a full
mediator between GIC elements and environmental performance.
This implies that GIC affects environmental performance only through
the mediating role of ambidextrous green innovation. This corrobo-
rates the argument of Hart and Dowell (2011), who challenge the
direct relationship between sustainable development practices and
performance. This result is consistent with the recent efforts that
advocate focusing more on how to shape the association rather than
what is required to connect environmental practices directly, strategies,
or resources, for example, GIC, with sustainability performance (Asiaei,
Bontis, Alizadeh, et al., 2022; Lin & Ho, 2016; Wijethilake, 2017).
5.1 | Theoretical implications
This study offers several important theoretical implications. Although
an accumulating body of research has yielded a wealth of insights into
how various sustainability initiatives or resources affect performance
(Asiaei et al., 2021), much less is known about ambidextrous green
innovation in translating such resources into superior performance.
We propose an original model building upon a unique synthesis of the
ambidexterity theory and the resource orchestration approach,
thereby providing important insights into the boundary between GIC,
ambidextrous green innovation, and environmental performance.
More specifically, we treat ambidextrous green innovation as a chan-
nel by which a company's environmental resources are mobilized
more effectively to yield better environmental performance. We
inspire by the ambidexterity view to introduce ambidextrous green
innovation as a mechanism of processes that provides direction to
optimize the utilization of GIC. While extensive research has
addressed environmental disclosure and reporting issues, much less is
known about the internal organizational mechanisms and capabilities,
for example, GIC and ambidextrous green innovation, which are cru-
cial in promoting environmental performance. Therefore, our research
contributes to the sustainability accounting literature by focusing
more on internal processes than external reporting.
5.2 | Practical implications
To maintain a sustained competitive advantage, organizations need to
optimize their strategic knowledge assets, which is crucial in under-
standing how to best leverage their underlying resources (Asiaei et al.,
2021). The results of our study have some important implications for
management practices. First, we document that ambidextrous green
innovation can be one channel to translate environmental resources
into enhanced performance. Hence, managers need to know how to
effectively orchestrate the various organizational green resources for
achieving sustained competitive advantage. The results of our study
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ASIAEI ET AL.
shed light on the fact that possessing green resources per se is
unlikely to yield favorable results. Instead, managerial processes or
mechanisms, for example, natural resource orchestration, are required
to translate the benefits of such resources into desired organizational
consequences. An effective strategy to leverage various green
resources (e.g., GIC) and capabilities (e.g., green ambidexterity) is
instrumental in supporting organizations to successfully organize, syn-
chronize, and manage, that is, “orchestrate,” their green intellectual
assets; promoting the company's green innovation; and improving the
performance at the end (Asiaei et al., 2020).
5.3 | Limitations and further research
Notwithstanding the preceding theoretical and practical contributions,
the results in this study are subject to a series of limitations. First, we
examine our hypotheses and draw conclusions based mainly on asso-
ciations (i.e., correlations) rather than causal impacts. In particular, the
analysis of cross-sectional data based on the survey fails to offer con-
clusive evidence of causality. Hence, the evidence drawn should be
regarded in line with the theoretical arguments and hypothesized rela-
tionships (Lisi, 2018). Second, the results stem from perceptions of
CFOs. Such perceived opinions are expected to be inadequate in
understanding the full extent of latent constructs (Verbeeten, 2008).
While applying the validated instruments and performing the pre-tests
procedure may mitigate the problem, more examination would be
helpful to validate the results of this study.
Furthermore, the institutional inconsistencies in various compa-
nies can partially influence the present research findings, as it is a
cross-sectional survey of all publicly listed organizations rather than a
specific industry. This study also opens up avenues for future studies.
Further research is required to shift the focus from green innovation
to other internal or external variables to extend our understanding of
other underlying mechanisms by which organizations can translate
environmental initiatives into improved environmental performance.
Future studies may also carry out a range of in-depth case studies to
investigate precisely how specific organizational systems can inter-
vene in the relationship between environmental motivations and orga-
nizational performance. Further, researchers can carry out longitudinal
investigations of the causality and interrelationships between vari-
ables critical to GIC and ambidextrous green innovation development,
thereby gaining a deeper understanding of the relationships between
the variables of interest. Future endeavors may consider expanding
the sample by covering a greater number of organizations, either at a
national or international level.
AC KNOW LEDG EME NT S
Open access publishing facilitated by Monash University, as part of
the Wiley - Monash University agreement via the Council of
Australian University Librarians. Open access publishing facilitated by
Monash University, as part of the Wiley - Monash University agree-
ment via the Council of Australian University Librarians.

ASIAEI ET AL.
ORCID
Kaveh Asiaei https://orcid.org/0000-0001-7713-4697
Omid Barani https://orcid.org/0000-0001-6369-0393
Mahesh Joshi https://orcid.org/0000-0001-5760-2449
ENDNOTES
1
Intellectual capital refers to “the possession of the knowledge, applied
experience, organizational technology, customer relationships, and pro-
fessional skills that provide a company with a competitive edge in the
market” (Edvinsson & Malone, 1997).
2
The literature refers to such assets as (1) sustainable intellectual capital

pez-Gamero et al., 2011); (2) organizational learning (Bhatia, 2021;
(Lo
Henri & Journeault, 2010), (3) environmental management capabilities
(Scarpellini et al., 2020), (4) green innovation (Tang et al., 2018),
(5) shared vision (Arago
n-Correa & Sharma, 2003), (6) stakeholder inte-
gration (Baranova & Meadows, 2017), and (7) reputation (Orlitzky et al.,
2003).
3 Asiaei, K., Jusoh, R., & Bontis, N., (2018). Intellectual capital and perfor-
Green innovation (processes and procedures) is concerned with innova-
tions in technologies, products, services, organizational structures, and
managerial styles in favor of sustainable development (Rennings, 2000),
for example, energy-saving activities, pollution prevention, and environ-
mental quality (Wang et al., 2020). Lo
pez-Gamero et al. (2011) refer to
GIC as sustainable intellectual capital in their paper.
4
The results for the control variables—size (t value = 1.75 and
p value = 0.08) and type of industry (t value = 0.27 and
p value = 0.78)—show negligible effects on environmental performance.
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How to cite this article: Asiaei, K., O'Connor, N. G., Barani, O.,
& Joshi, M. (2023). Green intellectual capital and ambidextrous
green innovation: The impact on environmental performance.
Business Strategy and the Environment, 32(1), 369–386.
https://doi.org/10.1002/bse.3136