Greening in weak contexts: How institutional voids, green strategic orientations and internationalisation drive eco-innovation

The role of macro-institutional factors in shaping entrepreneurial outcomes is increasingly receiving scholarly attention. Yet, most existing studies often adopt a restricted approach that overwhelmingly treats institutional voids as constraints. This study fills this gap by analysing the mechanism through which institutional voids influence eco-innovation, as well as the conditions under which this mechanism is more effective. Using a sample of 9867 small and medium-sized enterprises from 13 emerging economies, we find support for the dual role of institutional voids. Specifically, institutional voids are not just constraining factors; they also stimulate green strategic orientations (GSO), which in turn promote eco-innovation efforts. Furthermore, we find that international exposure enhances this mechanism, as export firms have higher levels of GSO and eco-innovation outcomes. Our findings contribute to entrepreneurship literature by revealing that GSOs are not mere background conditions, but essential organisational levers that allow eco-innovating firms to succeed in weak institutional settings. These findings are crucial for managers and policymakers seeking to improve the productivity and sustainability efforts of emerging economy firms.