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An Integrated Strategic Sustainability–Risk Management Modeling Approach for Product Development of Malaysian Furniture Companies

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Corporate Social Responsibility and Environmental Management

Published online on

Abstract

["Corporate Social Responsibility and Environmental Management, Volume 33, Issue 3, Page 4399-4421, May 2026. ", "\nABSTRACT\nThe Malaysian furniture industry, a major global exporter, faces increasing pressure to integrate sustainability into product development while effectively managing environmental and market‐related risks. This study examines how eco‐product and eco‐process innovation contribute to sustainability risk management and assesses whether market turbulence strengthens these relationships. Grounded in the resource‐based view (RBV) and Institutional Theory, the research explains how firms mobilize internal capabilities and respond to external pressures to address sustainability challenges while maintaining competitiveness. A quantitative design was employed using survey data from 105 Malaysian furniture manufacturers, and the proposed relationships were analyzed through structural equation modeling (SEM) using SmartPLS. The results indicate that firm innovation capabilities, customer green demand, and environmental regulations positively influence both eco‐product and eco‐process innovation, while competitive pressures support eco‐product innovation but not eco‐process innovation. Both eco‐product and eco‐process innovation demonstrate significant positive effects on sustainability risk management. However, the moderating effects of market turbulence on the eco‐innovation–sustainability risk management relationships are not supported, suggesting that the risk management benefits of eco‐innovation are relatively stable across varying market conditions. This study contributes to the corporate social responsibility (CSR) and sustainability literature by providing empirical evidence on how firms align eco‐innovation with sustainability risk management in an emerging‐market context. Practically, the findings underscore the importance of strengthening firm innovation capability and reinforcing regulatory and market mechanisms that encourage eco‐innovation adoption. Future research may extend these insights through cross‐sector comparisons and by examining how emerging technologies further enhance corporate sustainability practices.\n"]