Disentangling the effects of managerial competencies and corporate environmentalism on green innovation and financial performance: a PLS-SEM approach in emerging economies

The pursuit of sustainable competitiveness in emerging economies increasingly depends on the alignment of managerial capabilities with environmental strategies. This study examines the extent to which management competencies and corporate environmentalism drive green innovation performance (GIP) and financial outcomes in sustainability-oriented enterprises in Ecuador. Employing a quantitative research design, data were collected from 434 chief executive officers and senior managers through structured questionnaires. Hypotheses were assessed using Partial Least Squares Structural Equation Modelling (PLS-SEM), enabling robust analysis of complex interrelationships among competencies, environmental practices, and performance indicators. Findings reveal that strategic management competence exerts no direct effect on financial performance, whereas systems-thinking competencies significantly enhance GIP. Within corporate environmentalism, competitive advantage emerges as a key driver of financial outcomes, while regulatory pressures positively influence GIP. Contrary to prevailing assumptions, GIP itself does not improve financial performance. These results extend the entrepreneurship and sustainability literature by disentangling the mechanisms through which competencies and environmental strategies interact to shape organisational outcomes. Methodologically, the study advances the application of PLS-SEM in sustainability research by demonstrating its robustness in capturing complex, multidimensional relationships among managerial competencies, environmental practices, and performance indicators. Practically, the findings offer actionable guidance for managers and policymakers by underscoring the need to prioritise systems-thinking competencies and strategically leverage environmental initiatives as sources of competitive advantage, rather than relying solely on green innovation outcomes to enhance financial performance.