Green Innovation and Sustainable Competitive Advantage: Evidence from Manufacturing Firms in Bangladesh

Authors

Environmental pressures and evolving buyer requirements are

compelling manufacturing firms in emerging economies to integrate

sustainability into their competitive strategies. In Bangladesh,

however, empirical evidence on how different types of green

innovation shape sustainable competitive advantage (SCA) remains

limited. This study examines how three dimensions of green

innovation, such as green product, process, and technology

innovation, affect SCA among Bangladeshi manufacturing firms,

drawing on the Natural Resource-Based View (NRBV). A

quantitative cross-sectional survey was administered to 180

manufacturing firms, yielding 164 fully completed responses from

managers knowledgeable about innovation and sustainability

practices. Data were analysed using Partial Least Squares Structural

Equation Modelling (PLS-SEM) in SmartPLS 4.0, with reliability,

convergent and discriminant validity, model fit, and structural paths

rigorously assessed. Green product innovation has a positive and

statistically significant effect on SCA, whereas green process and

green technology innovations exhibit non-significant relationships

with SCA. Model fit indices (e.g., SRMR, NFI) indicate an acceptable

overall model. The findings suggest that market-visible, eco-friendly

product initiatives are currently the most effective route to sustainable

competitiveness in Bangladesh’s manufacturing sector. Managers

should prioritise green product innovation, while policymakers

design financial and technical support mechanisms to deepen process

and technology capabilities, enabling a gradual shift from

compliance-driven to strategically embedded green innovation.