How does entrepreneurial orientation influence firm performance? A moderated mediation model of tacit knowledge and green innovation

This study investigates how entrepreneurial orientation (EO) influences firm performance, focusing on both environmental and financial performance. Drawing on the resource-based view (RBV) and knowledge-based view (KBV), the study develops an integrative framework in which green product and process innovations mediate the EO–performance relationship, while tacit knowledge functions as a boundary condition that strengthens the effects of EO on green product and process innovations. Using survey and objective data from 244 firms in the Spanish textile industry, this study employs partial least squares structural equation modeling and a moderated mediation approach to test the proposed relationships. The findings suggest that green product innovation contributes similarly to environmental and financial performance, whereas green process innovation has a stronger effect on environmental performance. Moreover, tacit knowledge amplifies the impact of EO on green innovation—particularly green product innovation—by facilitating the effective use of internal knowledge resources to achieve sustainability-driven competitiveness. Overall, the study advances the understanding of how EO fosters innovation and performance within the combined frameworks of RBV and KBV, offering theoretical and practical insights for firms aiming to enhance environmental and financial performance by combining EO with knowledge-driven innovation.