The Role of Green Product Innovation and Market Advantage on Performance, Case of Transportation and Logistics Services

Sustainable development is constructed based on the understanding that conflicts between the economy and the environment can be overcome if it is organized in such a way that production activities would not cause adverse impacts on the environment. The objectives of this research are 1) to identify the relationship between green product innovation, environmental performance, market advantage, and financial performance, 2) to study whether green product innovation and environmental performance can improve financial performance through market advantage. This research was conducted by taking the case of the largest transportation and logistics company in Indonesia. Primary data were processed using SEM-PLS. The results of this research showed that the green product innovation policy could improve environmental performance, but could not improve financial performance simultaneously. Green product innovation could not significantly improve market advantage and financial performance. However, market advantage could significantly encourage the improvement of financial performance.