Does firms’ economic performance affect social and environmental performance with the mediation of the green image?
Аннотация
• Economic performance significantly influences the green image. • Economic performance significantly impacts the Social and Environmental performances. • Green image has a positive relation with the Social and Environmental performances. • Green image mediates the relationship between Economic and Social performance. • Green initiatives develop a green image of the firm which improve its profits. . This study investigates how firms’ economic performance (EP) influences social performance (SP) and environmental performance (EnP) through the mediating role of green image (GI) in Pakistan’s manufacturing sector, offering critical insights for achieving the UN Sustainable Development Goals (SDGs) in developing economies. While prior research predominantly explores how sustainability initiatives affect profitability, this work reverses the lens, examining whether economic strength enables socio-environmental investments. Grounded in the Natural Resource-Based View and dynamic capability theory, we posit that EP fosters GI, which subsequently drives SP and EnP. Data from 212 manufacturing managers, analyzed via partial least squares structural equation modeling (PLS-SEM), confirm that EP significantly strengthens GI, which in turn enhances EnP and SP. Direct positive effects of EP on EnP and SP are also observed. GI partially mediates these relationships, underscoring its strategic role in translating economic success into sustainability outcomes. The study contributes by reframing GI as a capability that bridges economic and sustainability goals, offering practical insights for firms in developing economies to align profit motives with socio-environmental responsibilities. Our findings extend the existing literature by confirming that EP fosters sustainability practices, particularly in developing countries.