Entrepreneurs’ environmental awareness and green performance: role of knowledge sharing and relational embeddedness

Abstract

While individual attributes of entrepreneurs play a crucial role in firm development, the mechanisms by which their environmental awareness translates into firm-level green performance (GP) remain inadequately understood. This study aims to address this gap by investigating how entrepreneurs’ environmental awareness (EEA) influences GP, with a focus on the mediating role of knowledge sharing (KS) (external and internal) and the moderating role of relational embeddedness (RE). Using data from the questionnaire responses of 408 entrepreneurial firms in China, hierarchical regression and bootstrapping analysis were used to test the hypotheses. EEA predicts both external and internal KS, which in turn enhances GP. RE exhibits a curvilinear (inverted U-shaped) moderating effect on the relationship between external KS and GP. Conversely, RE strengthens the positive effect of internal KS on GP. This study extends upper echelons theory (UET) by validating a “second-generation” model in the entrepreneurial context. It identifies KS as the specific strategic action that bridges the gap between an entrepreneur’s environmental awareness and firm GP. This study enriches knowledge management literature by distinguishing external and internal KS as discrete boundary-spanning processes and internal governance mechanisms. In contrast to prior work, this study clarifies their unique functions and respective roles. Furthermore, by integrating UET with social network theory, the study reveals that RE has an inverted U-shaped moderating effect on external KS while linearly reinforcing internal KS. These findings provide a nuanced framework for entrepreneurs to strategically calibrate their social networks and institutionalize personal environmental values into organizational outcomes.