Impact of Financial Leverage on the Relationship between Eco-Innovation and Financial Performance: Conceptual Paper

Aastvedt, T. M., Behmiri, N. B., & Lu, L. (2021). Does green innovation damage financial performance of oil and gas companies? Resources Policy, 73, 102235. https://doi.org/10.1016/j.resourpol.2021.102235
Aguilera-Caracuel, J., & Ortiz-de-Mandojana, N. (2013). Green innovation and financial performance: An institutional approach. Organization & Environment, 26(4), 365-385. https://doi.org/10.1177/1086026613507931
Ai, M., Luo, F., & Bu, Y. (2024). Green innovation and corporate financial performance: Insights from operating risks. Journal of Cleaner Production, 456, 142353. https://doi.org/10.1016/j.jclepro.2024.142353
Aivazian, V. A., Ge, Y., & Qiu, J. (2005). The impact of leverage on firm investment: Canadian evidence. Journal of Corporate Finance, 11(1-2), 277-291. https://doi.org/10.1016/S0929-1199(03)00062-2
Al-Sanasleh, A., Jaffar, N., Saidin, S. F., & Al-Nohood, S. (2025a). The Impact of Audit Committee Quality on the Relationship between Integrated Reporting Quality and ESG Performance: Conceptual Paper. International Journal of Academic Research in Economics and Management Sciences, 14(1), 96–106. https://doi.org/10.6007/IJAREMS/v14-i1/24589
Al-Sanasleh, A., Jaffar, N., Saidin, S. F., & Al-Nohood, S. (2025b). The Impact of Audit Firm Size on the Relationship between Integrated Reporting and Sustainability Performance: Conceptual Paper. International Journal of Academic Research in Accounting, Finance and Management Sciences, 15(1), 88–102. https://doi.org/10.6007/IJARAFMS/v15-i1/24623
Alos-Simo, L., Verdu-Jover, A. J., & Gomez-Gras, J. M. (2020). Does activity sector matter for the relationship between eco-innovation and performance? Implications for cleaner production. Journal of Cleaner Production, 263, 121544. https://doi.org/10.1016/j.jclepro.2020.121544
Altman, E. I. (1984). A further empirical investigation of the bankruptcy cost question. the Journal of Finance, 39(4), 1067-1089. https://doi.org/10.1111/j.1540-6261.1984.tb03893.x
Anderson, R. C., Mansi, S. A., & Reeb, D. M. (2004). Board characteristics, accounting report integrity, and the cost of debt. Journal of Accounting and Aconomics, 37(3), 315-342. https://doi.org/10.1016/j.jacceco.2004.01.004
Arranz, C. F. (2024). A system dynamics approach to modelling eco?innovation drivers in companies: understanding complex interactions using machine learning. Business Strategy and the Environment. https://doi.org/10.1002/bse.3704
Asni, N., & Agustia, D. (2022). The mediating role of financial performance in the relationship between green innovation and firm value: evidence from ASEAN countries. European Journal of Innovation Management, 25(5), 1328-1347. https://doi.org/10.1108/EJIM-11-2020-0459
Becker, M. C., Esslinger, H. U., Hedtke, U., & Knudsen, T. (2005). Development by Joseph A. Schumpeter: Introduction.
Bo, S., & Kexin, B. (2021). Open innovation mode of green innovation system for manufacturing industry. Mobile Information Systems, 2021(1), 9948683. https://doi.org/10.1155/2021/9948683
Borsatto, J. M. L. S., & Amui, L. B. L. (2019). Green innovation: unfolding the relation with environmental regulations and competitiveness. Resources, Conservation and Recycling, 149, 445-454. https://doi.org/10.1016/j.resconrec.2019.06.005
Carrión-Flores, C. E., & Innes, R. (2010). Environmental innovation and environmental performance. Journal of Environmental Economics and Management, 59(1), 27-42. https://doi.org/10.1016/j.jeem.2009.05.003
Chang, K., Ding, J., Lou, Q., Li, Z., & Yang, J. (2021). The impact of capital leverage on green firms’ investment: New evidence regarding the size and age effects of Chinese green industries. Finance research letters, 38, 101529. https://doi.org/10.1016/j.frl.2020.101529
Chesbrough, H., & Bogers, M. (2014). Explicating open innovation: Clarifying an emerging paradigm for understanding innovation. In Henry Chesbrough, Wim Vanhaverbeke, & J. West (Eds.), New Frontiers in Open Innovation (pp. 3-28). OUP Oxford, 2014. Available at SSRN: https://ssrn.com/abstract=2427233
Chesbrough, H. W. (2003). Open innovation: The new imperative for creating and profiting from technology. Harvard Business Press.
Danso, A., Lartey, T., Fosu, S., Owusu-Agyei, S., & Uddin, M. (2019). Leverage and firm investment: the role of information asymmetry and growth. International Journal of Accounting & Information Management, 27(1), 56-73. https://doi.org/10.1108/IJAIM-10-2017-0127
Danso, A., Lartey, T. A., Gyimah, D., & Adu-Ameyaw, E. (2021). Leverage and performance: do size and crisis matter? Managerial Finance, 47(5), 635-655. https://doi.org/10.1108/MF-10-2019-0522
Doan, T., & Nguyen, N. Q. (2018). Boards of directors and firm leverage: Evidence from real estate investment trusts. Journal of Corporate Finance, 51, 109-124. https://doi.org/10.1016/j.jcorpfin.2018.05.007
Doran, J., & Ryan, G. (2012). Regulation and firm perception, eco?innovation and firm performance. European Journal of Innovation Management, 15(4), 421-441. https://doi.org/10.1108/14601061211272367
Fernando, Y., Jabbour, C. J. C., & Wah, W.-X. (2019). Pursuing green growth in technology firms through the connections between environmental innovation and sustainable business performance: does service capability matter? Resources, Conservation and Recycling, 141, 8-20. https://doi.org/10.1016/j.resconrec.2018.09.031
Fuentes?Fuentes, Quintana?García, C., Marchante?Lara, M., & Benavides?Chicón, C. G. (2023). Gender diversity, inclusive innovation and firm performance. Sustainable Development, 31(5), 3622-3638. https://doi.org/10.1002/sd.2615
García-Granero, E. M., Piedra-Muñoz, L., & Galdeano-Gómez, E. (2018). Eco-innovation measurement: A review of firm performance indicators. Journal of Cleaner Production, 191, 304-317. https://doi.org/10.1016/j.jclepro.2018.04.215
Gebauer, S., Setzer, R., & Westphal, A. (2018). Corporate debt and investment: A firm-level analysis for stressed euro area countries. Journal of International Money and Finance, 86, 112-130. https://doi.org/10.1016/j.jimonfin.2018.04.009
Gu, S. (2023). Green innovation; a way to enhance economic performance of Chinese hotels. International Journal of Innovation Science, 15(3), 406-426. https://doi.org/10.1108/IJIS-07-2021-0128
He, K., Chen, W., & Zhang, L. (2021). Senior management's academic experience and corporate green innovation. Technological Forecasting and Social Change, 166, 120664. https://doi.org/10.1016/j.techfore.2021.120664
Hordofa, T. T., Vu, H. M., Maneengam, A., Mughal, N., & Liying, S. (2023). Does eco-innovation and green investment limit the CO2 emissions in China? Economic research-Ekonomska istraživanja, 36(1), 634-649. https://doi.org/10.1080/1331677X.2022.2116067
Hossain, A., Masum, A.-A., Saadi, S., & Benkraiem, R. (2023). Generalist CEO and carbon emissions. Journal of Economic Behavior & Organization, 213, 68-86. https://doi.org/10.1016/j.jebo.2023.07.016
Huang, J.-W., & Li, Y.-H. (2017). Green innovation and performance: The view of organizational capability and social reciprocity. Journal of Business Ethics, 145, 309-324. https://doi.org/10.1007/s10551-015-2903-y
Iqbal, N., Xu, J. F., Fareed, Z., Wan, G., & Ma, L. (2022). Financial leverage and corporate innovation in Chinese public-listed firms. European Journal of Innovation Management, 25(1), 299-323. https://doi.org/10.1108/EJIM-04-2020-0161
Javed, M., Wang, F., Usman, M., Gull, A. A., & Zaman, Q. U. (2023). Female CEOs and green innovation. Journal of Business Research, 157, 113515. https://doi.org/10.1016/j.jbusres.2022.113515
Khan, M. A., Qin, X., & Jebran, K. (2019). Does uncertainty influence the leverage-investment association in Chinese firms? Research in International Business and Finance, 50, 134-152. https://doi.org/10.1016/j.ribaf.2019.04.006
Kraus, S., Rehman, S. U., & García, F. J. S. (2020). Corporate social responsibility and environmental performance: The mediating role of environmental strategy and green innovation. Technological Forecasting and Social Change, 160, 120262. https://doi.org/10.1016/j.techfore.2020.120262
Lee, K.-H., & Min, B. (2015). Green R&D for eco-innovation and its impact on carbon emissions and firm performance. Journal of Cleaner Production, 108, 534-542. https://doi.org/10.1016/j.jclepro.2015.05.114
Lichtenthaler, U. (2008). Open innovation in practice: an analysis of strategic approaches to technology transactions. IEEE transactions on engineering management, 55(1), 148-157. https://doi.org/10.1109/TEM.2007.912932
Lin, W.-L., Cheah, J.-H., Azali, M., Ho, J. A., & Yip, N. (2019). Does firm size matter? Evidence on the impact of the green innovation strategy on corporate financial performance in the automotive sector. Journal of Cleaner Production, 229, 974-988. https://doi.org/10.1016/j.jclepro.2019.04.214
Liu, L. (2024). Green innovation, firm performance, and risk mitigation: evidence from the USA. Environment, Development and Sustainability, 26(9), 24009-24030. https://doi.org/10.1007/s10668-023-03632-z
Mansour, M., Al Zobi, M. t., Altawalbeh, M., Abu Alim, S., Lutfi, A., Marashdeh, Z., Al-Nohood, S., & Al Barrak, T. (2024). Female leadership and environmental innovation: do gender boards make a difference? Discover Sustainability, 5(1), 331. https://doi.org/10.1007/s43621-024-00545-3
Mansour, M., Saleh, M. W., Marashdeh, Z., Marei, A., Alkhodary, D., Al-Nohood, S., & Lutfi, A. (2024). Eco-innovation and financial performance nexus: does company size matter? Journal of Open Innovation: Technology, Market, and Complexity, 10(1), 100244. https://doi.org/10.1016/j.joitmc.2024.100244
Mubarak, M. F., Tiwari, S., Petraite, M., Mubarik, M., & Raja Mohd Rasi, R. Z. (2021). How Industry 4.0 technologies and open innovation can improve green innovation performance? Management of Environmental Quality: An International Journal, 32(5), 1007-1022. https://doi.org/10.1108/MEQ-11-2020-0266
Myers, S. C. (1977). Determinants of corporate borrowing. Journal of financial economics, 5(2), 147-175. https://doi.org/10.1016/0304-405X(77)90015-0
Nadeem, M., Bahadar, S., Gull, A. A., & Iqbal, U. (2020). Are women eco?friendly? Board gender diversity and environmental innovation. Business Strategy and the Environment, 29(8), 3146-3161. https://doi.org/10.1002/bse.2563
Ngo, Q.-H. (2023). The effectiveness of strategic alignment between open innovation and generic strategies: Empirical evidence from restaurant SMEs in Vietnam. Journal of Open Innovation: Technology, Market, and Complexity, 9(1), 100016. https://doi.org/10.1016/j.joitmc.2023.100016
Obradovi?, T., Vla?i?, B., & Dabi?, M. (2021). Open innovation in the manufacturing industry: A review and research agenda. Technovation, 102, 102221. https://doi.org/10.1016/j.technovation.2021.102221
Ofek, E. (1993). Capital structure and firm response to poor performance: An empirical analysis. Journal of financial economics, 34(1), 3-30. https://doi.org/10.1016/0304-405X(93)90038-D
Przychodzen, J., & Przychodzen, W. (2015). Relationships between eco-innovation and financial performance–evidence from publicly traded companies in Poland and Hungary. Journal of Cleaner Production, 90, 253-263. https://doi.org/10.1016/j.jclepro.2014.11.034
Qian, M., & Yeung, B. Y. (2015). Bank financing and corporate governance. Journal of Corporate Finance, 32, 258-270. https://doi.org/10.1016/j.jcorpfin.2014.10.006
Rauter, R., Globocnik, D., Perl-Vorbach, E., & Baumgartner, R. J. (2019). Open innovation and its effects on economic and sustainability innovation performance. Journal of Innovation & Knowledge, 4(4), 226-233. https://doi.org/10.1016/j.jik.2018.03.004
Sarkar, S. (2018). Optimal DOL (degree of operating leverage) with investment and production flexibility. International Journal of Production Economics, 202, 172-181. https://doi.org/10.1016/j.ijpe.2018.05.022
Shu, C., Zhou, K. Z., Xiao, Y., & Gao, S. (2016). How green management influences product innovation in China: The role of institutional benefits. Journal of Business Ethics, 133, 471-485. https://doi.org/10.1007/s10551-014-2401-7
Singh, S. K., Del Giudice, M., Chiappetta Jabbour, C. J., Latan, H., & Sohal, A. S. (2022). Stakeholder pressure, green innovation, and performance in small and medium?sized enterprises: The role of green dynamic capabilities. Business Strategy and the Environment, 31(1), 500-514. https://doi.org/10.1002/bse.2906
Staglianò, R., & Andrieu, G. (2017). Impact of the growth opportunities of influential firms on future investment intentions: A cross-country study. Finance research letters, 21, 235-240. https://doi.org/10.1016/j.frl.2016.12.009
Takalo, S. K., & Tooranloo, H. S. (2021). Green innovation: A systematic literature review. Journal of Cleaner Production, 279, 122474. https://doi.org/10.1016/j.jclepro.2020.122474
Tang, M., Walsh, G., Lerner, D., Fitza, M. A., & Li, Q. (2018). Green innovation, managerial concern and firm performance: An empirical study. Business Strategy and the Environment, 27(1), 39-51. https://doi.org/10.1002/bse.1981
Tariq, A., Badir, Y., & Chonglerttham, S. (2019). Green innovation and performance: moderation analyses from Thailand. European Journal of Innovation Management, 22(3), 446-467. https://doi.org/10.1108/EJIM-07-2018-0148
Thao, H. T., & Xie, X. (2024). Fostering green innovation performance through open innovation strategies: do green subsidies work? Environment, Development and Sustainability, 26(7), 18641-18671. https://doi.org/10.1007/s10668-023-03409-4
Tjahjadi, B., Soewarno, N., Hariyati, H., Nafidah, L. N., Kustiningsih, N., & Nadyaningrum, V. (2020). The role of green innovation between green market orientation and business performance: Its implication for open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 173. https://doi.org/10.3390/joitmc6040173
Tsuruta, D. (2015). Leverage and firm performance of small businesses: evidence from Japan. Small business economics, 44, 385-410. https://doi.org/10.1007/s11187-014-9601-5
Ullah, I., Jebran, K., Umar, M., & Yousaf, U. B. (2023). Chief executive officer trustworthiness and green innovation. Research in International Business and Finance, 64, 101845. https://doi.org/10.1016/j.ribaf.2022.101845
Vengesai, E., & Kwenda, F. (2018). The impact of leverage on discretionary investment: African evidence. African Journal of Economic and Management Studies, 9(1), 108-125. https://doi.org/10.1108/AJEMS-06-2017-0145
Vo, X. V. (2019). Leverage and corporate investment–Evidence from Vietnam. Finance research letters, 28, 1-5. https://doi.org/10.1016/j.frl.2018.03.005
Wang, T., & Thornhill, S. (2010). R&D investment and financing choices: A comprehensive perspective. Research Policy, 39(9), 1148-1159. https://doi.org/10.1016/j.respol.2010.07.004
Wang, Y. Z., & Ahmad, S. (2024). Green process innovation, green product innovation, leverage, and corporate financial performance; evidence from system GMM. Heliyon, 10(4).
Xie, X., Huo, J., & Zou, H. (2019). Green process innovation, green product innovation, and corporate financial performance: A content analysis method. Journal of Business Research, 101, 697-706. https://doi.org/10.1016/j.jbusres.2019.01.010
Yang, J. Y., & Suh, H. (2023). Heterogeneous effects of macroprudential policies on firm leverage and value. International Review of Financial Analysis, 86, 102554. https://doi.org/10.1016/j.irfa.2023.102554
Yao, Q., Liu, J., Sheng, S., & Fang, H. (2019). Does eco-innovation lift firm value? The contingent role of institutions in emerging markets. Journal of Business & Industrial Marketing, 34(8), 1763-1778. https://doi.org/10.1108/JBIM-06-2018-0201
Zhang, D., Rong, Z., & Ji, Q. (2019). Green innovation and firm performance: Evidence from listed companies in China. Resources, Conservation and Recycling, 144, 48-55. https://doi.org/10.1016/j.resconrec.2019.01.023
Zheng, L., & Iatridis, K. (2022). Friends or foes? A systematic literature review and meta?analysis of the relationship between eco?innovation and firm performance. Business Strategy and the Environment, 31(4), 1838-1855. https://doi.org/10.1002/bse.2986

Al-Nohood, S., Mansour, M., Olimat, M., & Al-Sanasleh, A. (2025). Impact of Financial Leverage on the Relationship between Eco-Innovation and Financial Performance: Conceptual Paper. International Journal of Academic Research in Accounting, Finance and Management Sciences, 15(1), 175–188.

Copyright: © 2025 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode