1 Introduction

Recently, more firms are paying attention to environmental protection (Chen et al. 2009). It has become a rapidly emerging trend for more and more companies to label their products or services as environmentally friendly. In the 2009 Grocery Manufacturers Association (GMA)/Deloitte study, GMA noted the existence of a large demand for green products. Socially-responsible or “green” goods and services are increasingly important for retailers, as their presence continues to increase dramatically (Tully and Winer 2014). Accompanied by appropriate regulation, trade can assist the transition to a green economy by encouraging the exchange of environmentally friendly goods and services. Additionally, Tully and Winer (2014) also observed that over half of participants (60.1 %) are willing to pay a premium for such products. Laroche et al. (2001) pointed out that 80 % of consumers who are inclined to spend more on green products would refuse to purchase from companies that do not follow environmental regulations, or that misrepresent non-green products as green. Green consumption, nature preservation and hazard prevention are typically emphasized in order to both entertain existing customers and attract new ones. Besides, in terms of personal values, more active participants in each environmental protection activity derive satisfaction from living frugally and engaging in environmental protection. Consequently, consumers are willing to purchase green products/services due to environmental awareness and personal values. Consumers thus tend to purchase green products in the environmental era (Makower 2009; Kalafatis et al. 1999).

Following Chen et al. (2006), the present study further considered that businesses can increase their resource productivity through service innovation. Service innovation comprises activities that consider environmental impact, involving unique services that cannot be easily replicated by rivals. Green knowledge sharing enables firms to draw on innovate skills that are required to develop product and process innovations. Developing Green knowledge sharing empowers firms to exploit their resources and knowledge to create innovative products and processes that can reduce the environmental impact of the firm. However, not every firm can employ its assets to derive maximal benefits. Today, firms face numerous difficulties and must accord with environmental regulations reinforced by global energy service companies or energy savings companies (ESCOs). Since 1990, ESCO industry performance and market trends have been recorded in the largest database of ESCO projects in the world. ESCOs are an effective delivery mechanism for providing the maximum allowance of energy efficiency resources. Green knowledge sharing enables firms to become ESCOs, contributing to firms’ strengths in green service innovation and attracting more customers.

In light of the changing market, firms must keep abreast of the most timely information, and must acquire the techniques and resources that need to be widely applied to maintain and expand their business operations. Environmental responsibility has recently become a major issue. People are willing to favor eco-friendly products, and to pay a premium for such products/services (Bhat 1993). The production process involves the transformation of various inputs into outputs that the market requires. The field of environmental ethics concerns human ethical issues, and includes product/service values. Adding value involves increasing the desirability of a product to a customer so they will pay a higher premium. Adding value thus is not simply about manufacturing, but also about factors such as green knowledge sharing, dynamic capabilities and service innovation. Firms know that linking a product or service to environmental benefits increases its desirability. Pujari et al. (2003) pointed out that higher environmental benchmarking improves market performance. Developing a responsible green product/service thus can be good for business.

Extensive pollution problems increase the opportunities for green businesses. People use limited resources to try to satisfy infinite demands. Green knowledge management thus is critical to help enterprises manage and apply their knowledge of green products/services. If companies wish to launch their own green products/services, green knowledge management is important in related sales. Green knowledge means that consumer and industrial buyers finally force organizations to integrate environmental protection into their corporate cultures, and thus all organizations mitigate the adverse environmental impacts of their activities.

However, not all companies are able to solve environmental problems. Firms must build green knowledge mechanisms to develop green knowledge and solve problems. If firms can combine existing and newly acquired environmental knowledge, their products/services will be warmly welcomed. Focusing on energy efficiency is important in modern society. Additionally, through stricter environmental regulations and corresponding legal responsibility, corporates must bear legal liability in accordance with the provisions of relevant laws and maintain the highest standards of conduct. Therefore, following regulations and developing green products and recycling resources is important. Environmental regulations and legal responsibility have made energy efficiency a hot issue. A growing number of firms have certified the carbon footprints of their products/services and supply chain emissions using the market-leading carbon trust standard and carbon footprint label. More people advocate for environment protection and believe that each purchase they make also makes contribution to the environment. Firms thus must use differentiation strategies to help companies improve their performance in terms of green products.

Green is not simply a marketing tactic or greenwash. Firms can operate effectively based on their ability to maintain momentum in green service innovation via green dynamic capabilities. But, greenwash would imperil the entire market for the green purchases and undermine green marketing (Chen et al. 2014). This study contends that firms have to develop green knowledge sharing, dynamic capabilities, and service innovation to increase green competitive advantage. This study argues that companies need to develop products which possess both of greenness and breakthrough attributes to improve competitive advantage in environmental friendly products. Besides, one of key elements for green service innovation is novelty. Increasing green knowledge sharing is a knowledge worker actually shares green knowledge with other members of his/her organization. This study defined green competitive advantage as a critical factor for companies to enhance the achievement of sustainable development. This study defined green knowledge sharing behavior as the degree to which a knowledge worker actually shares green knowledge with other members of his/her organization. Enhancing green competitive advantage through a green knowledge sharing model must consider the pivotal role of product greenness and both of green service innovation and green dynamic capabilities. This study would like to help companies to develop a green knowledge sharing framework to increase the three drivers of green competitive advantage: green knowledge sharing, green service innovation, and green dynamic capabilities. Knowledge sharing is one of the important dimensions of knowledge management. Garud and Kumaraswamy (2005) and Massey et al. (2002) recognized that effective knowledge management strategies can contribute significantly to the development of dynamic capabilities. We believed that knowledge sharing influences dynamic capabilities. However, there are no evidence that green knowledge management influences the creation and development of green dynamic capabilities. Firm have to conceive of and implement green knowledge that improves its efficiency and effectiveness. The firm’s ability that use resources and manage knowledge—specifically to identify, create, collect, organize, store, disseminate and apply green knowledge—to match and even create market change. This study explores the relationship between green knowledge sharing and green dynamic capabilities, so as to fill the research gap. The management of green knowledge is crucial for organizations and the methods of green knowledge identification, creation, collection, organizing, storage, dissemination and application are multiply. Green knowledge sharing can be accumulated in green knowledge base and used in different services. Green service innovation is a discipline to innovate, a management technic to make new ideas get converted into new environmentally friendly products or services. Green dynamic capability describes “the ability of a firm to integrate, build, and reconfigure internal and external competences to address changing environments and green product design. Green dynamic capabilities are critical to firm success, particularly in response to increased demand, and shortages of resources and energy. Green dynamic capabilities affect the development of effective innovation processes. Arungai (2015) pointed out that service innovation influence competitive advantage. This study regards that green service innovation comprises green product and green process innovations. Green service innovation can significantly act as the criterion in value-added products and services and ensure high competitiveness and high creativity, thus increase green competitive advantage.

2 Literature review and hypothesis development

2.1 The positive effect of green knowledge sharing ongreen dynamic capabilities

Knowledge management is a journey that moves an organization (library) from their present knowledge-chaotic environment to a knowledge-centric system (Taylor 2000). Koenig (2012) noted that a much more nuanced and useful characterization is to describe knowledge as explicit, implicit, and tacit. Tacit knowledge is personal knowledge that one would have extreme difficulty operationally setting out in tangible form. Explicit knowledge is codified knowledge, and is set out in tangible form. Implicit is the important idea that is not set out in tangible form but could be made explicit. Koenig (2012) stated that knowledge management consists of lessons learned databases, expertise location, and communities of practice. In sum, knowledge management is to manage a set of assets, including expertise and experience in individual workers. Besides, knowledge is most commonly categorized as explicit, implicit, and tacit. Argote and Ingram (2000) empathized the importance of knowledge transfer as a basis of the competitive advantage of particular organizations. From an organizational standpoint, the experience and knowledge have to be effectively delivered to those who need knowledge.

Classifying innovative knowledge and knowledge diffusion are important basis for enterprises to maintain a sustainable competitive advantage. Gold et al. (2001) studied senior executives and found that having appropriate knowledge infrastructure and process capabilities within the firm improves organizational effectiveness. Effective green knowledge management can improve knowledge infrastructure capabilities and the knowledge process of organizational members from time to time. Mehrabani and Shajari’s (2012) conducted a survey in their study, and the knowledge management items were derived from a knowledge management assessment instrument developed by Liebowitz (2004) and, a knowledge sharing practice questionnaire by de Vries et al. (2006). de Vries et al. (2006) defined knowledge sharing as the process where individuals mutually exchange their (tacit and explicit) knowledge and jointly create new knowledge. Chennamaneni and Teng (2006) proposed that knowledge sharing behavior is the degree to which a knowledge worker actually shares knowledge with other members of his/her organization. This study adopts Chennamaneni and Teng’s (2006) definition and posits a green knowledge sharing concept. Therefore, this study defines green knowledge sharing as the degree to which a knowledge worker actually shares green knowledge with other members of his/her organization.

Almahamid et al. (2010) posited that knowledge sharing practices have a significant positive effect on organizational competitive advantage. Skinnarland and Sharp (2011) also pointed out that earning and sharing knowledge are linked to the organization’s competitiveness. Besides, Abdul-Jalal et al. (2013) found that knowledge sharing affects organizational competitive advantage. This study refers to de Chennamaneni and Teng’s (2006) definition of knowledge sharing behavior to measure ‘green knowledge sharing’, and applies a seven-item scale. Chen and Chang (2013a) defined green competitive advantage as a condition under which firms occupy some positions about environmental management or green innovation where their competitors cannot copy its successful environmental strategies and they can gain the sustainable benefits from these successful environmental strategies. Green dynamic capabilities exist within organization itself and management process of enterprises. Enhancement of green dynamic capabilities should be a consistent and permanent activity in organizations. The organization must also consider the effective manner of green knowledge sharing and employs a variety of effective and creative manners to achieve green dynamic capabilities from green knowledge sharing. The process of improving green dynamic capabilities will be success when the company’s leaders understand the need for green knowledge sharing and exploitation.

Hypothesis 1 (H 1 )

This study hypothesizes that green knowledge sharing positively influences green dynamic capabilities.

2.2 The positive effect of green knowledge sharing on green service innovation

Carneiro (2000) examined the relationships among knowledge management, competitiveness, and innovation. Their findings confirmed that knowledge management is the fundamental asset that increases the innovations of a company. Empirical evidence supports the view that a firm with a knowledge management capability will use resources more efficiently and thus will be more innovative, resulting in better performance (Darroch 2005). Knowledge management is generally viewed as a process-oriented perspective that reflects strategies to acquire or create knowledge (Uhlaner et al. 2007). Firms have to collect and organize green knowledge so as to spread green knowledge around the company. Using green knowledge management in designing products/services and reflecting the green benefits of products/services can make a difference. Not everyone thinks from an environmental perspective, so firms may want to create opportunities to turn environmental principles into real-life business lessons by first collecting and organizing green knowledge. Besides, firms should make efforts to raise employee consciousness about environmental issues. Educating employees about green is an inexpensive but effective way to build momentum and bring green ideas to inspire their services.

Miles (1993) was the first one to propose the concept of service innovation. He explained what service innovation is and the interaction between cultural values and innovation process. Service innovation results when a firm is able to focus its resources on generating a praiseworthy outcome and turn their innovative ideas into reality. Barras (1986, 1990) developed a model of product and process innovations for service industries. To compete internationally, training and development innovations for services are essential in service industries. Gadrey et al. (1995) defined service innovations as innovations in process and innovations in organizations for existing service products. Service process innovation is defined as a realignment of the service delivery process. In service product innovation, Stuart and Tax (2004) defined the design of service products as the design of customer experiences, which resonates with Norman’s (2004) concept of reflective design. There are two differences between manufacturing industries and service industries. First, service product innovation is easy to be duplicated by competitors because there is little hardware to distinguish service products in which technology is embed (Coyne 1986). Secondly, many service firms do not have formal research and development departments (Gadrey et al. 1995). Summarily, service product innovation appears to be more unstructured and informal. Although technical/product innovation can easily be duplicated via using hardware and techniques, service innovation is more hidden in details. Miles (1993) classified service innovation into four dimensions: service production, service nature, service consumption and service markets. Robbins and Judge (2007) stated that innovation is a new idea applied to initiating or improving a product, process, or service. Service innovation is a discipline to innovate, a management technique to make new ideas converted into new products or services. What is fueling sales for green products and services? Organizations have to gain a foothold in the new market, and develop innovative products, processes, or services to provide complete and specific functions to the customer. The new idea of green service innovation shows customers how the firms provide green service to providing amazing innovations. Green knowledge management offers recognized knowledge and skills to customer to meet their uncovered needs. Green service innovation depends on shifting the focus away from the service solution and back to the customers. Green service innovation is able to meet environmental needs by devising green strategies. Working through 6 methods helps develop green services that are viewed as valuable and good experiences by customers. Firms have to identify their green knowledge up front to ensure success. Creating green knowledge to ensure what must be inputs inside organizations. Collecting green knowledge to ensure getting all the needs is well prepared. Organizing green knowledge to ensure green knowledge is ready for innovation. Storing green knowledge in a particular format is to generate an appropriate format. Firms need to disseminate green knowledge and transmit green knowledge to other employees who need knowledge. They also need to apply green knowledge to maintain green competitive advantages.

Proper structures, incentives, and management can help firms to generate innovation and build knowledge assets (Teece 1986). Organizations should have their own green knowledge management in order to create green knowledge from its own experience and innovation so as to create green service innovation. The management of green knowledge is crucial for the organization’s methods of green knowledge identification, creation, collection, organizing, storage, dissemination and application. The same green knowledge of operation can be accumulated in green knowledge base and used in different services. Wastyn and Czarnitzki (2009) believed firms that use particular techniques would realize a higher innovation performance with respect to new product sales (product innovation) and unit cost reduction of production (process innovation).

Chen et al. (2015a) pointed out that companies can increase their green shared vision, green mindfulness, and green self-efficacy to enhance their green creativity. But, there is few studies that investigated the antecedents of green service innovation and green innovation. Currently, there is no research investigated the relationship between green knowledge sharing and green service innovation. The company’s ability to interpret and exploit new environmental knowledge may be an important factor in its ability to generate green revenue. Chen et al. (2015b) reported that in the product aspect, green service innovation incorporates product modification, repackaging, and creation, whereas in the process aspect, green service innovation describes the manufacturing process that reduces negative environmental impacts on the processing of materials, resources and knowledge. The existence of extensive pollution problems increases the opportunities for green business. People use limited resources to try to satisfy infinite demand. Green knowledge sharing thus is critical to help enterprises manage and apply their knowledge of green products/services. If companies wish to create their own green products/services, green knowledge sharing is important in related sales. Green knowledge sharing means that consumers and industrial buyers finally force organizations to integrate environmental protection into their corporate cultures, and thus the organizations can mitigate the adverse environmental impacts of their activities. Thus, this study hypothesizes:

Hypothesis 2 (H 2 )

This study hypothesizes that green knowledge sharing positively influences green service innovation.

2.3 The positive effect of green knowledge sharing on green competitive advantage

Companies should seek to apply green marketing activities to achieve superior brand differentiation and obtain competitive advantage (Chang and Chen 2014). However, how can a firm improve competitiveness by creating green knowledge management? Firms view the acquisition of new knowledge as a way to gain and maintain competitive advantage (Danskin et al. 2005). With interaction, sharing and learning among internal members of the firm, the knowledge begins to diffuse in the firm and be applied by organizational members. The green experience and green knowledge have to be effectively delivered to organizational members so that the firm can provide a green service or produce a sustainable product to earn profits.

Green knowledge sharing is about green knowledge and skills acquired by every individual. Engaging employees to build intelligence of each organizational human element, these methods will contribute to both a green service program, and a green product process. Applying the value inherent in the relationships of a company with its customers about environmental issues will lead to profit growth. Developing responsible green relational capital allows managers to strengthen their market leadership in environmental products/services. Green knowledge sharing is a crucial determinant of firms offering green service innovation. The availability of resources and knowledge allows firms to exploit their capabilities to design products/services to reflect the customer’s green philosophy. The green market shows no signs of slowing down, and firms have to adapt to the ever-changing market place to survive and remain competitive in business.

Ansoff (1965) was the first text to use the concept of competitive advantage on corporate strategy. Based on Hofer and Schendel (1978), competitive advantage could imply exploitation of resources resulting in an organization’s distinctive position compared to its competitions. Besides, firms view the acquisition of new knowledge as a way to gain and maintain competitive advantage (Danskin et al. 2005). This study defined green competitive advantage as a critical factor for companies to enhance the achievement of sustainable development. Green knowledge sharing allows enterprises to improve the flow and integration of internal and external green knowledge. Once an organization has these goals set, it has to work on achieving them and come up with a project plan to achieve them in a conclusive manner. The best manner to meet the requirements has to be green knowledge sharing.

Hypothesis 3 (H 3 )

This study hypothesizes that green knowledge sharing positively influences green competitive advantage.

2.4 The positive effect of green dynamic capabilities on green service innovation

Basu et al. (2013) pointed out that firm resources lead to support of dynamic capabilities. This study believes that the core competences are resources related to dynamic capabilities. Pfeffer and Salancik (1978) proposed the resource dependence theory and suggested that resources are valuable because they contain some innate qualities. Besides, the dynamic capabilities approach provides a coherent framework to integrate existing resources and empirical knowledge. This study thus contends that green dynamic capabilities involve core competences related to green resources or capabilities.

The concept of dynamic capabilities was first proposed by Hamel and Prahalad’s research in a working paper in 1989. The academic literature on dynamic capabilities was based on (1) the resource-based view of the firm and (2) the concept of “routines” in evolutionary theories of organization (Nelson and Winter 1982). This study refers to Chen et al.’s (2015) definition of green dynamic capabilities and defined green dynamic capabilities as “the ability of a company to exploit its existing resources and knowledge to renew and develop its green organizational capabilities to react to the dynamic market”. Regarding the measurement perspectives for dynamic capabilities, Teece et al. (1997) outlined it as follows: Dynamic capabilities denote the ability of the firm to integrate, build, and reconfigure internal and external competences to address rapid environmental changes.

Green dynamic capabilities are concerned with a firm’s ability to exploit existing resources and knowledge to renew and develop green organizational capabilities to react to the dynamic market. Learning mechanisms as well as the intermediate step of dynamic capabilities shape operating routines directly (den Hertog et al. 2010). This study defines the term green service innovation as a manufacturing process that reduces negative environmental impacts on the processing of materials, resources and knowledge. According to den Hertog (2000), service innovation is a new or significantly improved service concept that is taken into practice. This study defined green dynamic capability as the ability of a firm to integrate, build, and reconfigure internal and external competences to address changing environments and green product design. The concept of green service innovation which includes technological and non-technological innovation is a well-accepted definition. The competences to address changing environments depends on how well it endowed by green service innovation. Green dynamic capabilities can exploit and reconfigure internal and external competences to achieve green service/product innovation. Therefore, this study hypothesizes:

Hypothesis 4 (H 4 )

This study hypothesizes that green dynamic capabilities positively influences green service innovation.

2.5 The positive effect of green dynamic capabilities on green competitive advantage

When Hamel and Prahalad (1989) first introduced the term dynamic capabilities, it represents the capacity of an organization to identify the need or opportunity for change (‘sensing’), formulate a response to such a need or opportunity (‘seizing’), and implement a course of action (‘reconfiguring’) (Eisenhardt and Martin 2000; Helfat et al. 2007; Teece 2007). In this sense this study is consistent with a resource or capabilities perspective on business growth and development.

Zaltman et al. (1973) defined innovation as any idea, practice, or material artifact perceived as new by the relevant unit of adoption. Zaltman et al. (1973) described the innovation process as comprising two main stages, initiation and implementation. Zaltman et al. (1973) focused on the point at which an organization decides to implement an innovation. Barras (1986, 1990) designed a model of product and process innovations for service industries. Additionally, Davenport and Short (1990) observed five steps that are sufficiently general to be applied to most organizations and processes. Miles (1993) classified service innovation into four dimensions: service production, nature, consumption and markets. Zahra et al. (2000) mentioned that product innovation denotes the number of successful new products relative to the competitors’, or the percentage of sales accounted for by products introduced during the past several years.

Competitive advantage is the responsive ability when enterprises face the diverse needs in an external dynamic competitive environment. Barney (1991) pointed out that a firm is said to have a sustainable competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy. Therefore, a firm’s relative position within an industry is given by its sustainable competitive advantage. From a resource-based view, the more firm-specific resources a firm has, the more valuable it is. Besides, Porter (1980) proposed generic competitive strategy and the value chain (Porter 1996) to describe how a firm uses activities to build competitive advantage. Thus, sustainable competitive advantage includes a unique activity or product valued by customers that competitors cannot easily imitate. How is competitive advantage created and implemented? Porter (1985) believed that a firm gains competitive advantage by performing these strategically important activities more cheaply or better than its competitors. Competitive advantage is viewed as a function of how resources (including knowledge) are combined with other resources to develop new competencies and knowledge (Lane et al. 2006). In sum, resources, strategies and activities are the assets that an organization has for creating competitive advantage.

Today, the environmental technology industry is thriving and the concept of “environmental technologies” is a competitive force and a tool for competitive advantage (Shrivastava 1995). According to Barney (1991) and Coyne (1986), a firm is said to have a “sustainable” competitive advantage when its competitors are unable to duplicate the benefits of the firm’s strategy. Porter (1985) identified two basic types of competitive advantage, including cost and differentiation. Differentiation strategy is pursued when a firm seeks ways to be ‘unique’ in its products/services that are widely used by customers. Environmental technologies are the differentiation defined by Shrivastava (1995) as “production equipment, methods and procedures, product designs, and product delivery mechanisms that conserve energy and natural resources, minimize environmental load of human activities, and protect the natural environmental”. Green dynamic capabilities, according to Chen and Chang (2013b), are the abilities of a company to exploit its existing resources and knowledge to renew and develop its green organizational capabilities to react to the dynamic market. Firms act and react in the pursuit of market opportunities and thus green dynamic capabilities rapidly develop into a flourishing issue. Addressing environmental issues dealing with consumer, firms can deeply make a commitment to environmental practices. With resource and knowledge, firms can exploit their capabilities to design products/services to reflect customer’s green philosophy. Green market shows no signs of slowing and firms have to adapt to the ever-changing market place today in order to achieve green competitive advantage in business. Shrivastava (1995) noted that enterprises could start green innovation from their products and production processes, by integrating the concept of environmental protection into product design and package to achieve product differentiation. This study refers to Chen and Chang’s (2013a) definition of green dynamic capabilities and hypothesizes:

Hypothesis 5 (H 5 )

This study hypothesizes that green dynamic capabilities positively influences green competitive advantage.

2.6 The positive effect of green service innovation on green competitive advantage

Lately, both industry managers and scholars have considered knowledge-intensive business services are an important part of knowledge-intensive sectors in every economy (Zieba 2013). Firms can use knowledge-based assets and processes to deliver innovative services. Scholars (Klassen and Whybank 1999; Porter and Van der Linde et al. 1995; Hart 1995; Schmidheiny 1992; Chen et al. 2006; Chen 2008, Chen and Chang 2013a) observed that green innovation is generally classified into green product and green process innovations.

Chen and Tsou (2007) devised a scale to measure process innovation and product innovation. Process innovation was adopted and modified mostly from Zaltman et al. (1973) and Davenport and Short (1990), with seven question items used to measure new service processes within a firm in relation to customer service, information inquiry, promotion, trade, administration and the development of new services. According to den Hertog (2000), service innovation is a new or significantly improved service concept that is taken into practice. According to Chen et al. (2015b), green service innovation includes elements of green invention, environmental service portfolio, environmental service delivery or environmental service design that involve exclusive innovations. It can be for example a new customer interaction channel, a distribution system or a technological concept or a combination of them. Green service innovation can be defined as a new or considerably changed service concept, client interaction channel, service delivery system or technological concept that individually, but most likely in combination, leads to one or more renewed service functions that are new to the firm and do change the service/good offered on the market and do require structurally new technological, human or organizational capabilities of the service organization.

Noci and Verganti (1999) observed that companies redirected considerable managerial and financial resources to green innovation since they recognizes the strategic relevance of programs that could offer sustainable competitive advantage. Brotherton (1997) and Sundbo (1994) suggested that service firms attempting to internationalize tend to take cost advantages from standardisation and gain competitive advantages from differentiation. Njuki et al. (2013) found that service process innovation and service product innovation have positive and significant effects on external competitive advantage. Green service innovation will increasingly become the important competitive advantage. Therefore, this study adopts Chen and Chang’s (2013b) definition of green competitive advantage and hypothesizes:

Hypothesis 6 (H 6 )

This study hypothesizes that green service innovation positively influence green competitive advantage.

This study demonstrates that the relationship between green knowledge sharing and green competitive advantage are partially mediated by green dynamic capacities and green service innovation. The outcome for the said hypothesis is discussed below indicating the significance of the effect between dependent and independent as well mediating variables for the overall model.

Hypothesis 7 (H 7 )

This study hypothesizes that green dynamic capabilities partially mediate the relationship between green knowledge sharing and green competitive advantage.

Hypothesis 8 (H 8 )

This study hypothesizes that green service innovation partially mediate the relationship between green dynamic capabilities and green competitive advantage.

SEM is applied to assess the hypotheses, and the research framework is shown in Fig. 1.

Fig. 1
figure 1

Research framework

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3 Methodology and measurement

3.1 Data collection and the sample

To ensure content validity, this study applied two pretests to the questionnaire revisions, including various questions on green knowledge sharing and green service innovation respectively. First, this study pretested the questionnaire through interviews with eight part-time MBA students with a minimum of 3 years of business experience. Feedback was sought with regard to whether there was anything in the question wording that was either ambiguous or unclear. Additionally, the questionnaire was distributed to 20 full-time employees with a minimum of 3 years of business experience. The sample questions were presented using a seven-point Likert Scale ranging from 1 to 7, with 1 being "strongly disagree" and 7 being "strongly agree."

This study focused on the Taiwanese electronics industry. First, Taiwanese electronics companies must develop green products to satisfy the customer environmental needs (Chen 2010). Second, the Tainan Science-based Industrial Park and Central Taiwan Science Park have established solid foundations for manufacturing. Clusters are created to achieve sufficient critical mass to enable an industry to develop via the inner strength of the cluster to support flexible development and thus increase its overall competitiveness. Third, Taiwan’s electronics companies possess sufficient resources to provide a steady investment environment and continue to boost their R&D capacity. These characteristics help companies in the Taiwanese electronics industry build a solid theory with regard to green knowledge sharing. To summarize, the development of green business competitiveness may determine the difference between success and failure for a firm. This study conducted surveys in North, Central, South, and East Taiwan. Respondents were asked to return the completed questionnaires within 2 weeks, and surveys were mailed to each sampled company. The research assistants called each company to increase the response rate. Three hundred and ninety completed questionnaires were collected from 980 distributed questionnaires, yielding a response rate of 39.80 %. This study investigated engineers and employees from information technology or related industries, including the electrical machinery, optoelectronics and communications, consumer electronics, semiconductors, electronic components and power supply industries.

3.2 The measurement of the constructs

This study use Tables 1 and 2 to position our paper. The item 3 and 4 is also applicable for measuring green dynamic capability. The authors remove item 3 and 4 from green dynamic capability subscale. The original questionnaire was listed as follows. The authors conduct a factor analysis on the green competitive advantage subscale. The definitions and measurements of the constructs in this study are described in the following.

Table 1 Constructs
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Table 2 Decision variables
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3.2.1 Green knowledge sharing

This study refers to Chennamaneni and Teng (2006) to measure green knowledge sharing. The measurement of green knowledge sharing includes four items: (1) I shared factual knowledge (know-what) from work with my co-workers; (2) I shared business knowledge about the customers, products, suppliers and competitors with my co-workers; (3) I shared internal reports and other official documents with my coworkers; and (4). I shared expertise from education or training with my co-workers.

3.2.2 Green dynamic capacities

This study adopts the survey of Chen and Chang (2013b) and Chen et al. (2015) to measure green dynamic capacities. The measurement of green dynamic capacities includes five items: (1) The company has the ability that can fast monitor the environment to identify new green opportunities; (2) The company has the ability to assimilate, learn, generate, combine, share, transform, and apply new green knowledge; (3) The company has the ability to successfully integrate and manage specialized green knowledge within the company; (4) The company has the ability to successfully coordinate employees to develop green technology; and (5) The company has the ability to successfully allocate resources to develop green innovations.

3.2.3 Green service innovation

This study refers to Chen et al. (2015) for the measurement of green service innovation. The Service Innovation Survey of Chen et al. (2015) combined two factors into a single factor to measure green service innovation. The measurement of green service innovation includes nine items: (1) In the past few years, our company has frequently repackaged existing products/services based on its concern for the environment; (2) In recent years, our company has frequently extended products/services based on its concern for the environment; (3) In recent years, our company has frequently created and established new lines of products/services based on its concern for the environment; (4) In recent years, our company has frequently offered new customer service practices based on its concern for the environment; (5) In recent years, our company has frequently offered new practices in selling products/services based on its concern for the environment; (6) In recent years, our company has frequently offered new practices in after-sales services based on its commitment to the environment; (7) In recent years, our company has frequently offered new practices in new product/service development based on its environmental concerns; (8) In the past few years, our company has frequently proposed new practices in the promotion of new products/services related to environmental reputation; and (9) In the past few years, our company has frequently proposed new practices related to internal administration and operations based on its environmental concerns.

3.2.4 Green competitive advantage

This study refers to Chen and Chang (2013a) to measure green competitive advantage, which incorporates four items: (1) The company has the competitive advantage of low cost about environmental management or green innovation compared to its major competitors; (2) The quality of the green products or services that the company offers is better than that of its major competitor’s; (3) The company is more capable of environmental R&D and green innovation than its major competitors; and (4) The company is more capable of environmental management than its major competitors.

4 Empirical results

4.1 The results of the measurement model

IBM SPSS Statistics 22 was used for factor analysis. All measures used were first refined via Cronbach’s alpha and then tested by confirmatory factor analysis (CFA). This study applied Lisrel 8.70 to yield the results. SEM was adopted to assess both the measurement and the structural models. Analysis of the squared multiple correlations revealed that most survey items reached the conventional acceptance threshold of 0.30 (Shea 1997).

4.2 The results of the structural model

Descriptive statistics were used to outline the basic features of the study data. Table 3 shows the correlations between constructs and indicates that they were significantly different from unity. Table 3 lists the means, standard deviations, and correlation matrix for all the model variables, as well as the positive correlations among green knowledge sharing, dynamic capabilities, service innovation, and competitive advantage. Moreover, Table 4 lists the results of the factor analyses. Every construct in the study can be classified into only one factor. This study designed questionnaire items and assessed the factor structure based on previous studies. To safeguard the content validity, this study used two pretests for the questionnaire revisions. Questionnaires were distributed and returned by mail. Reliability testing ensures confidence in the measure. First, this study measured the reliability by investigating the loadings of the individual items of each construct. Using exploratory factor analysis, I removed 3 items out of 7 items in green knowledge sharing dimension. Table 5 lists the factor loadings of all items for each construct. Second, the Cronbach’s α was calculated to estimate the reliability estimate. The Cronbach’s α coefficient of "green knowledge sharing (GKS)" was 0.887; that of "green dynamic capabilities (GDC)" was 0.899; that of "green service innovation (GSI)" was 0.916; and that of "green competitive advantage (GCA)" was 0.892. Because the Cronbach’s α coefficients of all four constructs exceeded 0.7, the measurement was considered reliable.

Table 3 Mean, standard deviation and correlation coefficient
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Table 4 Factor analysis results
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Table 5 The item factor loadings and construct Cronbach α coefficients and AVEs
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Using confirmatory factor analysis, this study analyzed validity of four constructs. Two measurements were applied to confirm construct validity. First, the “average variance extracted” measures the variance captured by the construct in relation to the variance due to measurement error, and this study used average variance extracted (AVE) to assess discriminate validity (Fornell and Larcker 1981). For discriminative validity, the square root of the AVE of every construct must exceed the correlations between each model construct and others. The results listed in Table 5 demonstrate that the measurement approach possessed desirable psychometric properties. For example, the square roots of the AVEs for the two constructs, GKS and GDC, are 0.849 and 0.837 in Table 5, and thus exceed the correlation between the two constructs, 0.617. Second, average variance extracted (AVE) should exceed 0.5 and construct reliability should exceed 0.7 for all model constructs. Table 5 lists the factor loadings, AVE and construct reliability, and it shows that the AVEs of the four constructs are 0.72, 0.70, 0.59, and 0.73, respectively. All four constructs thus have AVEs that exceed 0.5, and the construct thus has acceptable convergent validity. The model validity was assessed via convergent and discriminate validity. The study results exhibit adequate reliability and validity. Harman’s one-factor test is applied to test the presence of common method variance (CMV). The four constructs have twenty items in this study. All the twenty items are entered into an exploratory factor analysis to determine the number of factors that are necessary to account for the variance. Common method variance (CMV) occurs, while either a single factor would emerge from the exploratory factor analysis, or one general factor will account for the majority of the covariance. The result shows that there are four factors in the exploratory factor analysis. The results of the Harman’s single-factor test pointed out that the eigenvalue is 10.954 and the explained variance of 49.79 %. Hence, there is no CMV problem in this study.

4.2.1 Structural model results

The CFA results also indicate that their measurement models fit the data well (GFI = 0.83, RMSEA = 0.094, NFI = 0.87, CFI = 0.90). Hair et al. (1998) suggested that when NFI > 0.8 it implies a satisfactory fit. This study recommends that χ2/df should not exceed 3 (Bentler and Bonett 1980) while GFI should exceed the recommended value 0.8 (Seyal et al. 2002). Moreover, AGFI should exceed the recommended value of 0.8 (Seyal et al. 2002). RMSEA below 0.1 is desirable, while it is preferable that it be below 0.08 (Klein 1998). Based on these criteria, Table 6 indicates the model has satisfactory goodness of fit. Table 7 lists the effects of factors from the structure equation modeling example. This study also uses Process Macro 2.15 to test the mediation effect. The result shows that green dynamic capabilities and green service innovation partially mediate the relationship between green knowledge sharing and green competitive advantage, and the effect size is 0.15 and 0.34, respectively. Besides, the result shows that green dynamic capabilities partially mediate the relationship between green knowledge sharing and green service innovation, and the effect size is 0.36. Please refer to the revised manuscript in the empirical results section from line 7 to line 12 of page 33.

Table 6 Measures of overall model fit
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Table 7 Effects of factors based on the structural equation modeling example
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Figure 2 shows the study model. All six paths estimated are significant. Meanwhile, green dynamic capabilities positively influenced green service innovation and green competitive advantage. Additionally, this study shows that green dynamic capabilities exerted partial mediation effects on the positive relationship between green knowledge sharing and service innovation (0.32, *p < .05). Eventually, all hypotheses were supported.

Fig. 2
figure 2

The results of the full model

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5 Conclusions and implications

5.1 Managerial implications

Knowledge sharing is a frequent workplace issue. Chennamaneni and Teng (2006) defined knowledge sharing behavior as the degree to which knowledge workers actually share knowledge with other members of his/her organization. Knowledge sharing is the process where individuals mutually exchange their (tacit and explicit) knowledge and jointly create new knowledge. (de Vries et al. 2006). This study is based on the premise that IT markets are both important and rapidly changing. Academic marketers were often amazed by the speed of these changes. Businesses in green industries must overcome unique obstacles. Leading the march into the market for green general merchandise is an urgent issue. Meanwhile, knowledge sharing contributes directly to organizational innovation (Kamaşak and Bulutlar 2010). This study focuses on applying the new concept of green knowledge sharing to face the rapid and volatile technological change, and thus destroy stereotypes and open new prospects for green businesses.

Drucker (1969) was the first to claim knowledge as a replacement for land, labor, capital, machines, and other organization fixed assets as the main source of producing processes. Green knowledge sharing helps people share their knowledge; learn from each other; innovate and cooperate effectively to effect change. Green knowledge sharing is a method through which an enterprise consciously and exhaustively gathers, organizes, shares, and analyzes its knowledge based on resources, capabilities, and people skills. Organizations thus devote considerable resources to understanding the effects of green knowledge sharing, and green knowledge sharing becomes a valuable issue in the field of green issues. Environmental issues provide high quality information for enterprises to use and simultaneously provide an outlet for additional research.

Green knowledge sharing is a new concepts and this study thus proposes it to fill the research gap. Few studies have examined green dynamic capabilities (Chen and Chang 2013a; Chen et al. 2015), and this study focuses on the dynamic capabilities concept to enhance dynamic capabilities theory. No study has investigated green knowledge sharing, and thus this work seeks to investigate the relationships among green knowledge sharing, green dynamic capabilities, green service innovation and competitive advantage. This study introduces green knowledge sharing, dynamic capabilities, service innovation, and competitive advantage, which together comprise the premise of green businesses, along with performance theories and environmental technologies.

The results indicate that green dynamic capabilities facilitate a green service innovation approach. Superior dynamic capabilities will leverage the use of all firm resources, including the behaviors that accompany a green service innovation. Analysis of these empirical studies demonstrates that green knowledge sharing positively affects green dynamic capabilities and green service innovation. Second, green dynamic capabilities positively influence green service innovation and green competitive advantage. Third, green dynamic capabilities and green service innovation positively influence green competitive advantage. The empirical findings support all of these hypotheses. Additionally, it indicates that green dynamic capabilities not only directly and positively influence green competitive advantage, but also indirectly affect it via the partial mediator effect of green service innovation. The empirical findings substantially add to the literature on the importance of adopting green knowledge sharing, particularly in the green industry.

This study shows that green knowledge sharing positively impacts green dynamic capabilities, green service innovation, and green competitive advantage. This study also notes that green service innovation mediates the positive relationship between green dynamic capabilities and green competitive advantage. The mediating role of green service innovation contributes to the literature as follows: First, green dynamic capabilities can indirectly influence green competitive advantage via green service innovation. Second, the increase in green service innovation can help companies increase the positive relationship between green dynamic capabilities and green competitive advantage. This implies that adopting and nurturing green knowledge sharing and green dynamic capabilities are equally important for firms in their efforts to achieve great green competitive advantage through green service innovation. Third, previous studies have not investigated the role of green service innovation in mediating between green dynamic capabilities and green competitive advantage. This study aims to fill this gap. Finally, this study proposes the new concepts of green knowledge sharing, and thus contributes to the development of new approaches to deal with the contexts that have changed rapidly.

5.2 Theoretical implications

The contributions of this study lie in: First, it proposes and tests a research framework suitable for application by green businesses. Second, this study establishes the contribution of green dynamic capabilities and green service innovation to green competitive advantage. Third, although the concepts of green dynamic capabilities and green competitive advantage have been previously explored, this study proposes a novel construct, “green knowledge sharing”, and discusses the relationship among green knowledge sharing, dynamic capabilities, service innovation, and competitive advantage to fill the research gap. Fourth, this study applies and suggests a green dynamic capabilities and green competitive advantage framework to assess the relationships between green business and environmental sustainability. Fifth, this study integrates the concepts of green knowledge sharing, dynamic capabilities, service innovation, and green competitive advantage into a research framework of green competitive advantage to extend the research of green businesses. However, this requires Taiwan electronics companies to find new green business issues because the stricter environmental regulations and more popular environmentalism could no longer provide outlets for them. Taiwanese companies have to face the global environment protection trend and be cognizant of building a brave new world.

This study also discovers a new finding that green dynamic capabilities and green service innovation mediate the green competitive advantage model. First, this research points out that green service innovation mediates the positive relationship between green knowledge sharing and green competitive advantage. Second, green dynamic capabilities mediate the positive relationship between green knowledge sharing and green competitive advantage. Furthermore, green knowledge sharing directly affects green competitive advantage. Hence, the antecedent in this study is green knowledge sharing, and the consequence is green competitive advantage, while the full mediators are green dynamic capacities and green service innovation. Most importantly, green knowledge sharing cannot directly affect green competitive advantage without green dynamic capacities and green service innovation, and firms can improve their green service innovation via green knowledge sharing and green dynamic capacities.

In addition to the need to create or shape competitive advantage for enterprises, “knowledge management” and “capabilities” are important factors that cannot be ignored. In today’s environment people cannot rely on archaic methods for creating new revenue. Raising revenue requires some innovation inside the organization, either in products, services and promoting services innovation as part of the organizational economic development strategies. Green knowledge sharing will generate significant success and increase the profit for firms. A sustainable competitive advantage is one that cannot be copied by others. Firms with sustainable competitive advantage can offer great returns to shareholders.

5.3 Further study

Future research can focus on the antecedent of green knowledge sharing. Second, future research can focus on other industries and compare with this study. Third, future studies could extend this framework to include other variables as well as exploring areas with potential for further development of different industries.