Examining Green Innovation and Its Impact on Financial Performance. A PhD Study at UoB: Green Innovation Has a Positive Impact on Increasing the Profitability of Bahraini Companies

Sakhir – University of Bahrain (Khadijah Abdusalem)

6 July 2023

A study at the University of Bahrain (UoB) examined the impact of green innovation on the profitability of Bahraini companies and concluded that this type of innovation has a positive impact on profitability, as green innovation includes all technologies that can be used to produce goods and services and do not harm the environment.

It aimed to identify the main determinants of green innovation in the Kingdom of Bahrain’s business sector, and to investigate the factors that enhance the impact of green innovation in Bahraini companies on the financial performance of companies.

The study was prepared by Jaafar Hewaishel Al-Saudi, a student in the Environment and Sustainable Development PhD program at the University, whose thesis was titled: “The Determinants of Green Innovation and its Impact on the Financial Performance of Companies: A Case Study in the Kingdom of Bahrain.”.

Al-Saudi stressed that “Green innovation and its impact on the financial performance of companies” is a new concept in the environmental field and financial returns, and it has a significant impact on protecting the environment, reducing resource depletion, and reducing pollution, and is consistent with the Kingdom’s efforts to achieve sustainable development goals, poiting that the adoption of this concept by companies and its inclusion in their general strategies may generate an internal incentive to protect the environment, as it contributes to increasing their profitability.

The study found that variables such as management interest, absorptive and cognitive capacity, and green organizational culture enhance the impact of green innovations on increasing the profitability of Bahraini companies. In addition, the study proved that the “environmental legitimacy, green creativity, and green innovation strategy” are major determinants of green innovation performance within the business sector in the Kingdom of Bahrain.

Moreover, the researcher pointed out that proving the relation between green innovation and financial performance, delving into researching such relation academically and theoretically, and proving it practically, would have great positive results on the environment, as this relation lets companies be self-motivated to preserve the environment, instead of having to comply to it because of environmental laws. Additionally, he recommended conducting more research that compares financial performance with preserving the environment, which may change the companies’ view on protecting the environment and considering it a revenue center instead of a cost center as is currently the case.

The committee discussing the student in his thesis consisted of Associate Professor at the Department of Economics and Finance, Dr. Mohammed Sayed Abu Al-Saud, as an internal examiner, and Professor at the Normandy Business School in France, Dr. Sabri Bubaker, as an external examiner. Also, the thesis was supervised by Associate Professor at the Department of Economics and Finance, Dr. Mahdi bin Khaled Meili, and from Bahrain Polytechnic University, Dr. Ghassan Abu Al-Saud, as an assistant supervisor.

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