LAUSR

Facing the challenge of environmental degradation in Vietnam, a growing number of firms have begun to integrate environmental management systems into their business strategies and develop green product diversification strategies. On the basis of the stakeholder theory, this paper attempts to explore the influences of stakeholders on the implementation of horizontal and vertical green product diversification. Empirical results show that foreign customers play a significant role in driving companies to adopt strategy of green product diversification. For foreign‐invested enterprises, the effect is limited to the adoption of horizontal green product diversification. It further reveals that institutional weakness, lack of transparency, community stakeholders, and regulatory stakeholders have no significant effect on the corporate green product strategy.