The impact of environmental policy mechanisms on green innovation performance: the roles of environmental disclosure and political ties

Despite recognizing environmental policy mechanisms as critical drivers of green innovation, clarity is still needed regarding how and under what conditions they influence green innovation performance. Consequently, further investigation is warranted. This study addresses this research gap by examining the impact of environmental policy mechanisms, specifically command-control and market-based policy mechanisms, on green innovation performance. The study delves into the moderating role of political ties and the mediating effect of environmental disclosure (ED) by utilizing survey data from 499 heavy industries in the Republic of South Africa and drawing on the foundations of institutional and resource dependence theory. The findings shed light on the positive influence of command-control and market-based policy measures on ED. The Hayes process analysis reveals that the relationship between environmental policy mechanisms and green innovation performance is indirect and mediated by the level of ED A noteworthy discovery is made regarding the strengthening effect of political ties on the relationship between ED and green innovation performance. This study highlights the need for a greater emphasis on theoretical advancements and practical implications. By improving our understanding of the complex interplay between environmental policy, political ties, ED, and green innovation performance, this study contributes to the existing body of knowledge.