Green Innovation and Sustainable Competitive Advantage: Evidence from Manufacturing Firms in Bangladesh

Environmental pressures and evolving buyer requirements are compelling manufacturing firms in emerging economies to integrate sustainability into their competitive strategies. In Bangladesh, however, empirical evidence on how different types of green innovation shape sustainable competitive advantage (SCA) remains limited. This study examines how three dimensions of green innovation, such as green product, process, and technology innovation, affect SCA among Bangladeshi manufacturing firms, drawing on the Natural Resource-Based View (NRBV). A quantitative cross-sectional survey was administered to 180 manufacturing firms, yielding 164 fully completed responses from managers knowledgeable about innovation and sustainability practices. Data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) in SmartPLS 4.0, with reliability, convergent and discriminant validity, model fit, and structural paths rigorously assessed. Green product innovation has a positive and statistically significant effect on SCA, whereas green process and green technology innovations exhibit non-significant relationships with SCA. Model fit indices (e.g., SRMR, NFI) indicate an acceptable overall model. The findings suggest that market-visible, eco-friendly product initiatives are currently the most effective route to sustainable competitiveness in Bangladesh’s manufacturing sector. Managers should prioritise green product innovation, while policymakers design financial and technical support mechanisms to deepen process and technology capabilities, enabling a gradual shift from compliance-driven to strategically embedded green innovation.