Do ESG Strategies Drive Green Innovation in Emerging Economies?

Aim/Purpose: This study investigated factors influencing the intention to engage in green innovation among small and medium enterprises (SMEs) in the tourism sector, using an integrated approach from the pro-environmental planned behavior (PEPB) and technology organization environment (TOE) models. Background: Green innovation is a long-term strategy aimed at addressing environmental challenges in the Indonesian tourism sector, especially those related to SMEs in culinary, accommodation, transportation, and creative industries. While prior research primarily focused on innovation characteristics and various behavioral intentions towards new technologies, this study pioneered an approach to understanding green innovation practices among SMEs by examining behavioral intention and the influence of internal organizational and external environmental factors. This was achieved through the PEPB model, which extends the theory of planned behavior (TPB) by incorporating perceived authority support and perceived environmental concern and integrating it with the TOE model. This comprehensive approach was crucial for understanding SME motivations, needs, and challenges in adopting green innovation, thereby supporting environmental sustainability. Methodology: Data were collected through offline and online questionnaires and interviews with 405 SMEs that had implemented green innovation as respondents. The theoretical model was tested using partial least squares structural equation modeling (PLS-SEM) with top-level constructs. Contribution: This research contributed to the development and validation of an integrated model for green innovation in SMEs, offering insights and recommendations for all stakeholders in the tourism sector to formulate effective green innovation strategies. Findings: This research revealed that the integrated model of pro-environmental planned behavior and technology organization environment successfully explained 71% of the factors influencing the intention to engage in green innovation for SMEs in the tourism sector. Perceived authority support emerged as the strongest factor, while perceived behavioral control was identified as a weaker factor. Recommendations for Practitioners: The research findings recommended that SMEs in the tourism sector focus on customer satisfaction and operational efficiency and optimize the recruitment and training processes of resources to maximize success in adopting environmentally friendly innovations. Meanwhile, for the government, providing support, incentives, and stringent environmental regulations could encourage sustainable business practices. Recommendation for Researchers: The research findings recommended that SMEs in the tourism sector focus on customer satisfaction and operational efficiency and optimize the recruitment and training processes of resources to maximize success in adopting environmentally friendly innovations. Meanwhile, for the government, providing support, incentives, and stringent environmental regulations could encourage sustainable business practices. Impact on Society: Examining the factors influencing the intention to engage in green innovation among SMEs in the tourism sector carried significant social implications. The findings contributed to recommending strategies for businesses and stakeholders such as the government, investors, and tourists to collectively strive to minimize environmental damage in tourist areas through the implementation of green innovation. Future Research: There are several promising avenues to explore to enhance future research. Expanding the scope to include diverse regions and industries and using additional approaches, such as leadership theory and management commitment theories, can increase the R-squared value. Additionally, broadening the profile of interviewees to obtain a more comprehensive understanding of the intention to engage in green innovation should be considered.

This study examines the influence of local wisdom on green competitive advantage in micro, small, and medium enterprises (MSMEs) within the batik industry in East Java, Indonesia. It also investigates the mediating role of green innovation in linking local wisdom and green competitive advantage. A purposive sampling method was used, resulting in 79 batik MSMEs selected as study objects, with 122 respondents consisting of MSME owners and/or managers. Data were analyzed using the Structural Equation Modeling–Partial Least Squares (SEM-PLS) method. The findings show that local wisdom positively influences green product innovation, green process innovation, and green competitive advantage. Notably, green process innovation plays a significant role in enhancing green competitive advantage, while green product innovation does not demonstrate a similar impact. Furthermore, green process innovation mediates the relationship between local wisdom and green competitive advantage, whereas green product innovation does not. The study highlights the importance of integrating local wisdom into sustainable business practices to strengthen competitiveness. It also emphasizes the need for targeted strategies to overcome barriers such as financial limitations, underdeveloped green markets, and limited government support. Enhancing education and training for MSME owners, alongside increasing consumer awareness of green products, should be prioritized for future development.

Purpose The purpose of this study is to examine the impact of knowledge management dimensions (i.e. knowledge acquisition, knowledge dissemination and knowledge responsiveness) on green innovation. The study also seeks to determine whether these relationships are mediated by the environmental awareness in small and medium enterprises (SMEs) in the UAE. Design/methodology/approach Data were obtained from a sample of 194 SMEs (two informants from each firm that consist of 388 top managers) in Abu Dhabi, UAE. In this cross-sectional study, convenience random sampling was used. The positivism approach was adopted using a hypothetical statistical induction method. Validated measurement scales were used to measure the study constructs adopted from previous studies. Data were analysed using a quantitative approach with Smart partial least squares structural equation modelling (PLS-SEM) 3.0. Findings The results of the study indicated a positive and significant association between knowledge acquisition, knowledge dissemination and knowledge responsiveness with green innovation. Moreover, the data analysis confirmed that environmental awareness mediates the relationship between knowledge dissemination and green innovation. However, no mediation role of environmental awareness in the relationship between knowledge acquisition and knowledge responsiveness with green innovation was found. Practical implications Knowing how to manage knowledge effectively is considered to be one of the most important aspects of green innovations. Nonetheless, there was a dearth of literature highlighting the relevance of knowledge management for long-term organisational success. The results of this study present practical implications for SME professionals. Green innovation with the support of environmental awareness may help a firm understand and implement the importance of knowledge management into their administrative operations. They can subsequently become eco-innovative ecologically, economically and socially. Originality/value This is one of the very few studies that examine the effect of knowledge management dimensions (knowledge acquisition, knowledge dissemination and knowledge responsiveness) on green innovation in UAE SMEs.

Despite the increasing academic focus on green entrepreneurship and numerous studies investigating the relationship between green entrepreneurial orientation and green innovation as well as the findings on a positive correlation between the two, green entrepreneurial innovation (GEI) has been overlooked Consequently, there is a necessity to investigate GEI in small and medium enterprises (SMEs) within emerging nations. Notwithstanding scholarly research advocating for the adoption of social media platforms (SMP) by enterprises, there remains an insufficient understanding of whether SMP can function as a mechanism via which relational social commerce capability (RSCC) influences GEI in SMEs. This research aims at delving into the interconnection between SMP and GEI in SMEs. Alternatively, the current study intends to investigate how RSCC mediates the relationship between SMP and GEI. We executed three rounds of survey data gathering, separated by a one-year interval. Data utilized in this study were drawn from samples of respondents employed by SMEs at three distinct points in time: pre-COVID-19 pandemic, during the COVID-19 pandemic, and post-COVID-19 pandemic. Structural equation modeling was made use to investigate the hypothesized interconnections. Results from the empirical study show that SMP and GEI are significantly and substantially correlated. Additionally, RSCC partially mediates the relationship between SMP and GEI. This study provides a distinctive viewpoint on how SMP might promote RSCC to achieve optimal outcomes in GEI inside SMEs in a developing country, where no prior initiatives of this magnitude have been undertaken. Gaining a deeper understanding of this research helps SME executives identify and implement tactics to boost the efficiency and effectiveness of SMP implementation, which in turn promote RSCC and GEI.

The nexus of technology orientation and green innovation performance: The potential mediating role of innovation capability

PurposeThe purpose of this study is to examine the influence of ESG practices on green innovation with the moderating effect of innovation orientation in Malaysian manufacturing listed companies.Design/methodology/approachThis study employed a quantitative research approach by using a well-structured questionnaire for data collection. The questionnaire was distributed to 204 Malaysian manufacturing listed companies in consumer products and services sector. Finally, partial least square-structural equation modeling (PLS-SEM) was utilized to examine the relationship between constructs.FindingsBased on stakeholder theory, results indicated that environmental, social and governance (ESG) practices significantly improve green innovation. The insignificant moderating effect of innovation orientation was identified between the relationship of environmental and social practices and green innovation. Interestingly, results affirmed the negative moderating effect between the relationship of governance practices and green innovation.Research limitations/implicationsThis study is limited to Malaysian manufacturing companies of consumer products and services sector in Bursa Malaysia. Hence, the findings of this study cannot be generalized to manufacturing companies of other geographical contexts.Practical implicationsThis work provides constructive implications to management and policymakers of Malaysian manufacturing companies in strategic planning toward enhancing green innovation and developing business competitiveness to achieve sustainable business performance.Originality/valueThis research magnifies valuable insights into the literature through a comprehensive model that simultaneously investigates the relationships between ESG practices, innovation orientation and green innovation. In addition, this is the first attempt to investigate the influence of ESG practices on green innovation with a moderating effect of innovation orientation, which indeed strengthens the originality of this study.

Blockchain technology has been heralded as a game changer for addressing severe environmental and economic sustainability challenges. In response to rising environmental concerns, blockchain technology (BCT) is transforming green innovation, culminating in green economic practices and well-established business models. Recognizing this, we investigated the role of blockchain technology in green innovation practices and its impact on green economic sustainability, which has an impact on green environmental sustainability. Moreover, 184 small- and medium-sized enterprises (SMEs) were surveyed in Lima, Peru. Data for this cross-sectional study were gathered using stratified random sampling. The positivist approach was implemented using a statistical induction method. Prior studies’ research constructs were measured using validated measurement scales. For quantitative data analysis, using the partial least squares structural equation modeling (PLS-SEM) framework, this study provided two key findings. First, sustainability orientation and sustainability attitude have a positive and significant effect on the adoption of green innovation that employs green energy (solar) technology towards a sustainable green economy. Second, the intention to use blockchain technology mediates the relationship between sustainability orientation and social perception with the adoption of green innovation that employs green energy (solar) technology towards a sustainable green economy. We recommend that small- and medium-sized enterprises embrace green innovation and blockchain technology to protect the environment and boost community cohesiveness.

Green Human Resource Management (GHRM) is a salient investment for firms to stay sustainably competitive and is instrumental in enhancing organisational environmental performance for natural environmental sustainability. While there has been a significant increase in GHRM, there is a lack of academic empirical studies examining the nexus of green transformational leadership, GHRM, green innovation and environmental performance. Nonetheless, the nexus of those variables must be explored in developing countries, especially Sri Lanka. Drawing upon the Ability Motivation Opportunity (AMO) theory and Resource-Based View (RBV) of the firm, this study aims to substantiate that GHRM fosters environmental performance, especially of Small and Medium Enterprises (SMEs), thus yielding them a competitive edge. The study used bibliometric analysis to analyse unstructured data from 86 journal publications from the Scopus database. Subsequently, a research gap was identified, and a conceptual framework was constructed based on the findings. The theoretical framework was confirmed by analyzing data from a sample of 128 small and medium-sized companies (SMEs) and social entrepreneurs in Sri Lanka employing partial least squares structural equation modeling (PLS-SEM). Strong green transformational leadership is required to improve GHRM and environmental performance, raise the caliber of green innovation, and promote environmental performance within small and medium-sized businesses (SMEs), according to the results of the bibliometric study and the application of partial least squares methods.

PurposeThis study examines the impact of green corporate social responsibility (GCSR) on corporate sustainable development (CSD) in Pakistani small and medium enterprises (SMEs) by investigating the mediating roles of environmental strategy (ES) and green innovation (GI), as well as the moderating effect of digital transformation (DT).Design/methodology/approachWe surveyed 410 managers and employees from diverse SMEs in Pakistan. We used structural equation modelling (SEM) and partial least squares path modelling (Smart-PLS) to analyze the data.FindingsThe results show that GCSR is positively related to CSD, with ES and GI mediating this relationship. DT positively moderates the relationships between ES and CSD, GI and CSD, and GCSR and CSD.Practical implicationsThe results provide valuable insights for SME managers and policymakers. They suggest the importance of promoting digital adoption and green initiatives to enhance sustainable development. The study offers a framework for understanding how green practices, innovative strategies, and digital technologies can contribute to the sustainable management of SMEs in developing economies.Originality/valueThis study emphasizes the significance of GCSR practices and effective green strategies that can help sustain the development of Pakistani SMEs and the importance of digital technologies for sustainable development in these enterprises. The results can be useful for SME managers and policymakers as they suggest promoting a context that encourages digital adoption and green initiatives. This study significantly contributes to the literature by thoroughly examining the interaction of GCSR, ES, GI, and DT within a developing economy, while also offering practical insights for the sustainable management of SMEs.

The objective of the study is to clarify the influence of digital capabilities on innovation capability, considering the direct and indirect impacts of digital leadership and digital culture in small and medium enterprises (SMEs) in Vietnam. The study used a mixed research method including qualitative with in-depth interviews and quantitative with Partial Least Squares Structural Equation Model (PLS-SEM) to analyze 271 responses. Research results show that digital capabilities have a positive impact on SMEs’ innovation capability. Digital leadership and digital culture also, directly and indirectly, affect firms’ digital capabilities and innovation capabilities. From there, the study confirms the theoretical contributions as well as proposes suggestions for SMEs to develop digital capabilities, and as a result, to develop innovation capabilities.

The purpose of this study is to assess the ecological efficiency of manufacturing small and medium-sized enterprises (SMEs) by analyzing their adoption of green human resource management practices (GHRMPs), green intellectual capital (GIC), and green innovation (GIN). The study was carried out on a representative sample of 367 manufacturing SMEs in Pakistan, and data were gathered using a particular survey questionnaire. The results were analyzed using the partial least squares–structural equation modeling (PLS-SEM) technique in SmartPLS4. This research indicates that the adoption of GHRMPs significantly impacts environmental performance (EP), GIC, and GIN. Additionally, the study found that the correlation among GHRMPs is positively mediated by GIC and GIN. The study contributes to the body of knowledge by investigating EP based on the Ability-Motivation-Opportunity Theory (AMO) through empirical evidence on hypothesized relationships. The paper provides a valuable understanding and novel approach for managers of SMEs in developing countries to improve their EP through the adoption of GHRMP, GIC, and GIN.

Digital transformation enables small and medium enterprises (SMEs) to reduce or overcome their reliance on resources and energy, thereby minimizing their environmental impact and providing them with sustainable green competitive advantages. However, the reasons for this phenomenon are not yet clear. To further investigate this issue, we selected 391 Chinese SMEs to examine the relationships among green transformation, green innovation, government regulation, and green competitive advantages. Green innovation includes green product innovation and green process innovation, while government regulation includes incentive regulation, constraint regulation, and guidance regulation. The empirical results show that digital transformation can enhance SMEs' green competitive advantages. Additionally, the hypothesized mediating effect of green product innovation and green process innovation between digital transformation and green competitive advantages is supported, while the moderating effect of incentive regulation, constraint regulation, and guidance regulation on the relationship between digital transformation and green product innovation and green process innovation is also confirmed. The findings of this study may contribute to more effective management of digital transformation and green innovation in SMEs, thereby promoting their development.

In the era of digital transformation, small and medium enterprises (SMEs) are required to enhance their innovation capacity and adapt to digital platform capabilities to remain competitive. This study aims to investigate the relationship between entrepreneurial SME performance, innovation capability, network capability, and digital platform capability. Using a quantitative approach, data were collected from 278 SMEs in Indonesia through a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings demonstrate that entrepreneurial SME performance positively influences innovation capability and network capability. Furthermore, innovation capability significantly enhances both network capability and digital platform capability. However, digital platform capability is not directly influenced by entrepreneurial performance, indicating the mediating role of innovation. The findings also highlight the interdependence between innovation and network capability in strengthening digital capabilities. This study concludes that innovation plays a key mediating role in linking business performance to digital transformation. Practical implications suggest that SMEs must foster a culture of innovation and invest in digital skills and networking strategies. Theoretically, the study enriches the understanding of dynamic capabilities and digital transformation in the SME context.

With environmental sustainability gaining significance, firms require green leadership to drive the adoption of eco-innovations through appropriate culture-building. This quantitative study uses upper echelons theory to analyze green innovation levels in Vietnamese small and medium enterprises (SMEs) and to assess intermediary mechanisms that transmit strategic leaders’ influence. Results of partial least squares structural equation modeling (PLS-SEM) provide strong empirical support for the hypotheses that environmental knowledge sharing practices mediate the impact of green leadership behaviors on higher performance in green product and process innovation. Specifically, knowledge exchange through cross-functional collaborations and external partnerships explains the effect of leadership. Findings respond to calls for research on green innovation drivers in emerging markets such as Vietnam, where institutional pressures for ecological responsibility remain underdeveloped. Furthermore, identifying actionable transmission mechanisms informs policy guidelines regarding interventions necessary to nurture sustainable innovation. This study offers multi-level theoretical and practical contributions.

Over the past two years, the Covid 19 pandemic was the greatest communicable outbreak that has upended almost every aspect of our lives. Despite this, the progress in realizing sustainable development remains as a challenge in the global perspective and yet it should be eliminated. The world is facing a pragmatic threat of climate change which potentially damage the Earth’s ecosystems. There is a need for all relevant parties to cooperatively care for the environment in decreasing the environmental degradation and climate change in achieving sustainability to leave no one left behind. Our study highlights the perception of the firm at firm-level that can link environmental sustainability practices and firm performance, especifically in the Micro, Small and Medium Enterprises (MSMEs). Hence, in this study, we will examine how corporate sustainability orientation influences firm performance, and how corporate sustainability orientation influences firm performance through environmental practices with the use of the Natural Resource-based View (NRBV) theory and Stakeholder theory. This study uses a judgmental sampling method with a set of criteria to have an accurate result for the study. A total of 219 responses were collected and this study uses a Partial Least Squares – Structural Equation Modeling (PLS-SEM) approach in data analysis. From the analysis, both corporate sustainability orientation and environmental practices were found significant, while the relationship between corporate sustainability orientation and firm performance was found significant through the indirect effect. For future studies, this study suggests researcher to explore corporate sustainability orientation in the perspective of firm-level and individual-level to have a comparison in terms of perception towards sustainability practices and how it impacts the firm performance.