TAF PUBLISHING

Recent years, environmental sustainability becomes an interesting issue in developing countries. Increasing attention on environmental problems gives opportunities for companies to develop new products, such as green product innovation. The aim of this research is analyze the effect of green product innovation on firm performance which moderated by managerial environmental concern and green communication. The sample of this research is 26 retails in Malang (hypermarkets and supermarkets categories) which sell organic products and use environmentally friendly packaging, by using total sampling and SEM-PLS analysis. According to statistical results, green product innovation has direct effect on firm performance (p<0.001, β=0.50). On the other hand, managerial environmental concern (p=0.001, β=0.43) and green communication (p=0.048, β=0.25) moderate the effect of green product innovation on firm performance. Green product innovation is an important deliberation in determining strategies and policies at retail sector. Communication and promotion related organic products are needed in increasing organic product’s sales and encourage customer using environmentally friendly packaging (reusable bags or cardboard). Empirically, this research’s results contribute as an idea for future research and literature, especially for strategic management’s area. The results provide a practical contribution for companies in defining and designing strategies related to green product innovation to boost company's performance.