Driving sustainability: Role of economic incentives, and environmental awareness in electronic sector

Economic incentives, such as subsidies and tax incentives, play a crucial role in motivating firms to integrate sustainable practices into their operations. These incentives are designed to offset the initial costs associated with adopting environmentally friendly technologies and processes, thereby promoting long-term sustainability and competitiveness in the global market. The primary objective is to analyse how economic incentives affect firms' adoption of sustainable practices, with environmental awareness acting as a mediator. The study also aims to assess whether firm size moderates these effects, providing insights into variations in sustainability practices among medium and large-sized firms in Vietnam. Data were collected from 113 medium and large-sized firms in Vietnam's electronic sector. Findings demonstrate that economic incentives are positively and significantly related to sustainable practices adoption. Environmental awareness emerges as a crucial mediator, enhancing the impact of financial incentives on greening efforts. However, firm size moderates these effects: larger organizations exhibit more pronounced responsiveness to subsidies, benefiting from stronger institutional pressures and greater resource availability. Medium firms, although still positively influenced, face capacity constraints that can temper the effects of incentives on awareness and practice implementation. Supplementary analyses, including IPMA and fuzzy set Qualitative Comparative Analysis, further explain the multifaceted pathways toward sustainability, underscoring the roles of resource distribution, internal culture, and external legitimacy. This study contributes valuable, context-specific insights into policy design, corporate strategy, and sustainability research. Its findings emphasize that economic incentives alone may not suffice; genuine organizational awareness is integral to realizing long-term environmental benefits.