The influence of responsible leadership on environmental innovation and environmental performance: The moderating role of managerial discretion

Abstract Based on stakeholder and upper‐echelon theories and following the logic of “leadership‐behavior‐performance,” this study constructs a model to investigate the relationships between responsible leadership, managerial discretion, environmental innovation, and firm's environmental performance. This study analyzed a sample of survey responses from 208 manufacturing firms. The results show that the three dimensions of responsible leadership (relationship building, relational governance, and sharing orientation) have a positive effect on incremental environmental innovation; relational governance and sharing orientation have a positive effect on radical environmental innovation; both incremental and radical environmental innovation have a positive effect on a firm's environmental performance; and finally, managerial discretion plays a significant and positive moderating role in the relationships between sharing orientation and incremental and radical environmental innovation, and between relational governance and radical environmental innovation.