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The bright side of emerging industries is that they help to increase incomes across the nation, yet, they contribute to environmental degradation. Moreover, when more people are concerned about the environmental impact, this reduces the firm’s competitiveness. Thus, what strategy does the firm need to consider in order to improve the environment, which in the meantime, may also secure financial performance, and what causal effect does this strategy have on their competitive advantage? To address these questions, this study seeks to explore the relationship between green service strategies and the firm’s performance from the aspects of employee empowerment and physical evidence. This study further examines the mediating effect of differentiation advantage. Data were collected from 110 green hotels in Malaysia, and the PLS-SEM technique was applied to assess the research model. Analysis of the direct relationship shows that the green physical evidence has a significant effect on the differentiation advantage and is directly significant to the relationship between the differentiations of two performance constructs. The results also demonstrate that the green physical evidence has a significant influence on the financial and environmental performance while mediated by the differentiation advantage. This study is essential for future researchers and practitioners as it provides new literature and new insight into green marketing strategies.

Green Employee Empowerment and Green Physical Evidence: The Green Service Strategy to Enhance Firm Performance