How Design for Environment Translates into Competitive Advantage: The Roles of Quality Management Innovation, Green Dynamic Capability, and ESG Performance

摘要

Driven by global sustainability initiatives and ambitious carbon neutrality targets, Environmental, Social, and Governance (ESG) performance has emerged as a critical measure of corporate value and competitiveness. Yet, translating environmental management investments into tangible and lasting competitive advantages remains a challenge for both scholars and practitioners. Drawing on the dynamic capability perspective and stakeholder theory, this study proposes an analytical framework to explain how Design for Environment (DFE) influences ESG performance in Chinese manufacturing firms. By synthesizing prior research and conceptually mapping the relationships among DFE, Quality Management Innovation (QMI), Green Dynamic Capability (GDC), and stakeholder pressure, the study makes several key arguments: DFE as a Strategic Starting Point: DFE serves as a foundation for corporate green transformation, shaping operational improvements and strategic adaptive capabilities. GDC as a Linking Mechanism: Green Dynamic Capability bridges environmental practices and ESG outcomes, facilitating the translation of initiatives into measurable performance gains. QMI as a Capability Enabler: Quality Management Innovation underpins the capability-building process, helping firms convert DFE initiatives into ESG-related advantages. Stakeholder Pressure as a Boundary Condition: External expectations and pressures amplify the value creation potential of environmental strategies, ensuring that green initiatives are aligned with broader stakeholder priorities. By unpacking the “black box” of how DFE evolves into a broader competitive advantage, this study provides a theoretically grounded and practically relevant framework for firms aiming to design and implement effective sustainable development strategies.