Examining the Relationship Between Green Product Innovation Strategy and Financial Performance: The Boundary Role of TMT Diversity

This study examines the relationship between green product innovation (GPI) and firm financial performance, and how top management (TMT) diversity, as a multidimensional construct, moderates this relationship. Drawing on the dynamic capabilities and upper echelons theories, it proposes a conceptual framework and empirically tests it using a mixed-effects regression model and a comprehensive panel dataset comprising 16,152 new product introductions from 46 publicly traded U.S. firms in the food and beverage industry. Findings extend existing knowledge on the relationship between GPI and firm financial performance by identifying TMT diversity as a new boundary condition. They further contribute to upper echelons theory by conceptually and empirically distinguishing how observable and non-observable dimensions of TMT diversity shape strategic effectiveness of GPI. This research also provides nuanced insights by highlighting the conditions under which GPIs yield favorable financial outcomes, guiding firms in configuring their TMTs to enhance innovation-driven competitive advantage and sustainability initiatives.