Are small and medium enterprises beneficial from the adoption of green market orientation under the intensity of market competition? A strategic alignment perspective

Abstract There is limited knowledge regarding whether market competition (MC) influences the adoption of green market orientation (GMO) by small and medium enterprises (SMEs). Moreover, there is no clear understanding of whether the strategic alignment between differentiation strategy (DS) and the adoption of GMO and MC accounts for these enterprises’ financial performance (FP). This study aims to draw on contingency theory and the natural resource-based view to shed light on these questions by proposing a research model, which demonstrates the relationship between MC and GMO and the mediating effects of DS on the relationship between MC, GMO, respectively, and FP. Data were collected from 172 SMEs that are currently operating in Vietnam. The partial least square structural equation modelling technique was executed to examine the research model. The results reveal that the intensity of MC influences SMEs to adopt GMO. Furthermore, it was also shown that DS fully mediates the relationship between MC, GMO, and FP. This study provides four significant contributions to environmental management research and contingency theory. In addition, this study provides crucial practical implications for SMEs operating in Vietnam.