Evidence for the Mediating Effects of Eco-Innovation and the Impact of Driving Factors on Sustainable Business Growth of Agribusiness

The examination of the drivers of eco-innovation at the micro-level has been the topic of widespread discussion in recent years. However, several issues about these drivers in developing countries with low-tech sectors remain unaddressed. The current paper underlines the impacts of the drivers of eco-innovation on sustainable business growth in the agri-food sector. This study tests a set of hypothesized relationships that focus on a sample of 306 Tunisian enterprises. We harness structural equation modeling to examine the relationship between the driving factors (i.e., regulatory pressure, competitive pressure, customer demand, technological competence, and efficiency) and enterprises' sustainable business growth by analyzing the mediating effects of eco-innovation strategy. The findings reveal that: (1) regulatory pressure is the most influential driver of eco-innovation strategy, followed by competitive pressure and technological competence, (2) there is a positive relationship between eco-innovation strategy and enterprises' sustainable business growth, and (3) eco-innovation strategy fully mediates the relationship between the drivers and sustainable business growth. These results are consistent with the ‘Porter Hypothesis’ and have great potential for contributing to the achievement of sustainable development objectives. © 2021, Global Institute of Flexible Systems Management.