Adoption of green innovation practices in SMEs sector: evidence from an emerging economy

Abstract

In developing world, awareness and environmental concerns are forcing small and medium-sized enterprises to adopt green practices. Hence it is important to distinguish the major obstacles/barriers which hinders the adoption of green practices in SMEs. This study utilizes a framework (three-phase) to classify the major barriers/obstacles and solutions to eliminate these obstacles in green innovation adoption. In total, twenty-five barriers and fifteen solutions were recognized through review of existing literature and experts opinions. Fuzzy Analytical Hierarchal Process (AHP) was utilized to rank these barriers and Fuzzy Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) is employed to give appropriate ranks to strategies/solutions to overcome the identified obstacles. The findings of our study revealed that out of six major barriers, legal barriers were the most critical obstacles in green innovation adoption in Pakistani SMEs. Information barriers were the second critical green innovation adoption obstacles/barriers in SMEs, followed by technical-barriers, managerial-barriers, economic-barriers and market-barriers. These findings will offer insights to SMEs stockholders to overcome and eradicate barriers to green innovation, who intend to adopt green practices instead of conventional ones. Our study analysis will assist SMEs in prioritizing the major factors influencing green innovation adoption.