The Role of Environmental Compliances in Escalating Knowledge and Innovative Activities and Enhancing Business Performance

This study investigates the interplay between environmental compliance, external knowledge transfer from customers, knowledge quality and corporate innovation, and their collective impact on business performance. Using institutional and social network theory, a research model was tested with data collected from management teams within the Vietnamese manufacturing sector through structural equation modelling. The results reveal that environmental compliance significantly enhances external knowledge transfer from customers and improves business performance via knowledge adoption. Furthermore, the study highlights that high-quality knowledge and corporate innovation both directly and indirectly contribute to increased business success. Specifically, the adoption of high-quality knowledge facilitates the development of innovative products and services, thereby strengthening competitive advantage. These findings offer practical insights for firms on how to effectively integrate knowledge quality strategies into their operations, adhere to environmental regulations and drive corporate innovation. By doing so, organizations can not only ensure environmental compliance and sustainability but also enhance their overall performance and market position.