GREEN INNOVATION AND OPERATIONAL EFFICIENCY: DOES LOWER CARBON EMISSIONS ALWAYS LEAD TO PROFITABILITY?
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This study examines the relationship between green innovation, operational efficiency, and corporate profitability, focusing on carbon emission reduction. Using the Resource-Based View (RBV) and Stakeholder Theory approaches, this research explores how investments in green innovation can enhance operational efficiency and provide a competitive advantage for companies. While theoretically, reducing carbon emissions can improve efficiency and lower production costs, its impact on profitability is not always direct. High initial investment costs, regulatory complexities, and varying market demand are key factors influencing the success of this strategy. A review of the literature indicates that while some studies support a positive relationship between green innovation and profitability, others suggest that economic benefits only materialize in the long term. Therefore, adopting sustainability strategies requires a comprehensive approach that considers government incentives, industry pressures, and consumer preferences to ensure success in increasing profitability through green innovation and operational efficiency.
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