Power of Green Capabilities and Artificial Intelligence (AI): Understanding How and When Green Innovation Promotes Sustainability

Purpose Grounded on the natural resource-based view (NRBV) theory, this study aims to analyze the impact of five green strategies – environmental regulations, corporate environmental ethics, green dynamic capability, top management support and green intellectual capital, on green innovation and its impact on sustainability performance of manufacturing firms in Egypt; in addition, the mediating role of circular economy practices on the relationship between green innovations and firms’ sustainability performance was assessed. Design/methodology/approach The data were collected from 394 responses from Egyptian manufacturing firms by using purposive sampling method. Partial least squares structural equation modeling (PLS-SEM) was mainly employed to analyze the data. Findings The study finds that environmental regulations, corporate environmental ethics, green dynamic capabilities and top management support significantly enhance green innovations of Egyptian manufacturing firms, while green intellectual capital is found insignificant. The relationship between green innovations and sustainability is found to be positive. The results reveal that circular economy practices partially mediate the relationship between green innovations and sustainable practices in Egyptian manufacturing firms. Practical implications To ensure sustainable business performance in Egypt, a long-term strategy focusing on green innovations is essential. The government should enforce strict regulations, while firms adopt sustainable practices, support managers and train young employees to drive green supply chain innovations and enhance business performance. Originality/value This study focuses on manufacturing firms, exploring the impact of green business processes on green innovation and sustainability performance. It uniquely examines the mediation role of the circular economy and provides insights applicable to developing countries like Egypt.

PurposeThe purpose of this paper is to propose a conceptual framework that establishes the linkages among green dynamic capability (GDC), green innovation (GI), organisational creativity (OC) and organisational agility (OA), which influence small and medium enterprises (SMEs) sustainability performance (SP) in trade and service sectors in Thailand.Design/methodology/approachThis paper conducts a search of existing literature regarding SMEs SP. A conceptual framework is provided that can be used by SMEs to enhance their SP driving sustainable business growth.FindingsA framework for SMEs sustainability is proposed, which demonstrates the connection between GDC and SME SP, with GI and OC as mediators and OA as a moderator.Research limitations/implicationsThis paper is limited in terms of the scope of SME sustainability in the context of the trade and service sector. Future empirical study should be conducted to validate the proposed framework and hypotheses in this study.Practical implicationsThis study forms the basis for the enhancement of SMEs SP in relation to boosting their GDC, GI, creativity and agility.Originality/valueThis paper presents a comprehensive framework that leads to the conceptualisation of SME SP. It will help practitioners and academics to better understand the causes of SMEs SP.

Green innovation adoption has become increasingly important in curbing the hotel sector’s environmental impact and satisfying environmentally woke customers. Therefore, the purpose of this study was to explore the effects of green innovation adoption on the sustainability performance of star-rated hotels in Nairobi City County. The current study applied cross-sectional survey research design, Complete enumeration method to collect data using questionnaires and observation checklist and was guided by the Resource-Based View Theory. This research incorporated descriptive statistics and multiple linear regression to predict the impact of green innovation adoption on sustainability performance as well as the moderating influence of environmental commitment on the relationship between green innovation adoption and sustainability performance. The study showed that green process innovation adoption, green organizational innovation adoption and green technology innovation adoption respectively had a significant positive regression coefficient on the sustainability performance of star-rated hotels in Nairobi County, Kenya while environmental commitment had no significant regression coefficient on the relationship between green innovation adoption and sustainability performance. The findings of this study concluded that most star-rated hotels had adopted green innovation that contributed to sustainability performance and contributed to understanding of green innovation adoption in the hospitality industry, its impact on sustainability performance by the policy makers and hotel managers. Therefore, hotels should invest and adopt green innovation to ensure achievement of sustainability performance.

The environmental damage phenomenon is a challenge for businesses today, including for small and medium industries in developing countries, such as Indonesia. Green innovation is a solution to answer public concerns over global environmental issues. However, the Small and Medium Enterprises (SMEs) sector generally still focuses on achieving their economic performance. Green innovation is a strategic step for SMEs to increase sustainability and financial performance in the global market. This study aimed to holistically identify the antecedents and consequences when implementing green innovation in SMEs. This study also analyzed the role of green innovation as a mediator in the relationship between intellectual capital, sustainability performance, and financial performance. The survey was conducted on 336 SMEs in Bali, Indonesia. The questionnaire was directly distributed to owners or managers of SMEs over three months. This study proved that intellectual capital positively increased green innovation, SME sustainability, and financial performance. Green innovation was also considered as a mediating variable in the relationship between intellectual capital, sustainability performance, and financial performance. Thus, the implementation of green innovation directs entrepreneurs to fulfill not only social and environmental responsibilities but also encourages SMEs to achieve their economic benefits.

The concept of green innovation has been increasingly gaining attention among academics, practitioners, and policymakers, although its way of adoption remains unclear. This study tried to address this gap by providing ways to foster green innovation in organizations. In addition, this study aims to discuss various factors that enable green innovation and accompanying opportunities from this initiative. Moreover, inherent challenges to promoting green innovation in organizations are also elaborated within the scope of this study. Furthermore, this study examines the moderating role of green innovation concerning higher education institute (HEI) and vocational education and training (VET) capabilities and environmental dynamism. This study is concluded after exploring the significance of capability between green dynamic capability and green innovation adoption. We believe that this study opens up a new avenue in the area of green and sustainable innovation and contributes to the environmental literature in general. The concept of green innovation has been increasingly gaining attention among academics, practitioners, and policymakers, although its way of adoption remains unclear. This study tried to address this gap by providing ways to foster green innovation in organizations. In addition, this study aims to discuss various factors that enable green innovation and accompanying opportunities from this initiative. Moreover, inherent challenges to promoting green innovation in organizations are also elaborated within the scope of this study. Furthermore, this study examines the moderating role of green innovation concerning higher education institute (HEI) and vocational education and training (VET) capabilities and environmental dynamism. This study is concluded after exploring the significance of capability between green dynamic capability and green innovation adoption. We believe that this study opens up a new avenue in the area of green and sustainable innovation and contributes to the environmental literature in general.

The Covid-19 pandemic has had a major impact on economic growth in Indonesia, one of which is for Micro, Small and Medium Enterprises (MSMEs). Thus, MSMEs need to improve their business performance in a sustainable manner to achieve the desired economic growth, one of which is through the adoption of green innovation. The purpose of this study was to analyze the relationship between the adoption of green innovation and sustainable business performance of MSMEs especially during the Covid-19 Pandemic. The research subjects taken in this study were MSME actors in the food and beverage sector at Pematangsiantar City, totaling 371 MSMEs. The analysis technique used in this study was Structural Equation Modeling (SEM) using the Smart PLS program. The results of this study indicated that green innovation has a positive and significant influence on sustainable business performance, especially on social performance and environmental performance, while it has no significant effect on economic performance.

This study investigates the influence of green dynamic capability on sustainability performance through the mediating role of green innovation and the moderating role of green sustainability pressure among manufacturing firms in Ghana. By employing a survey questionnaire, data was collected from 325 companies in Accra Metropolitan Area in the Greater Accra Region of Ghana. Data was analysed using structural equation modelling using Amos 24. Findings from the study indicate that green dynamic capability innovation influences both product and process dimensions of green innovation. However, only the process dimension of green innovation impacted positively on all three dimensions of sustainability performance. Additionally, the findings of this study revealed that green dynamic innovation impacts sustainability performance through the mediating role of green innovation. Furthermore, the study found that sustainability pressure moderates the relationship between green innovation and sustainability performance.

The present study focuses on stakeholder pressures and the green dynamic capabilities of achieving green innovation and financial performance in various sectors in Indonesia. Data were collected from 120 top management representing their companies involved in this study, and path analysis was applied to test the hypothesis. The study results reveal that stakeholder pressures strengthen organizational green dynamic capabilities and innovation. Moreover, the study finds that stakeholder pressures significantly and positively predict green innovation through green dynamic capabilities and corporate financial performance through sequential mediation involving both green dynamic capabilities and green innovation. This study underscores the significance of green initiatives across various sectors, positioning them as essential components of corporate strategy in the modern business landscape.

Increasing business organizations are also damaging the natural infrastructure, and researchers are pressing hard on this issue since several decades. Moreover, the studies relating to business organizations only focus on the establishment, development, and success of businesses and paid less attention to the dark trade business expansions, i.e., lack of green innovation and increase in pollution and environment damages. Keeping in view these issues, this study is aimed at investigating the effect of green dynamic capabilities, green practices, and green value co-creation on green innovation in SMEs (small and medium enterprises). This study also tested the mediating role of value co-creation in the links between green practices-green innovation and green dynamic capability-green innovation. Structural equation modeling (SEM) was used, and the mediation analysis was conducted through Preacher and Hayes Approach (2004, 2008) and through Soble test. Empirical results proved that green dynamic capabilities, green practices, and green value co-creation improve the mechanism of green innovation in SMEs.

Purpose This study investigates the impact of green intellectual capital (IC) on the economic, social, and environmental sustainability performance of manufacturing small- and medium-sized enterprises (SMEs) in Pakistan–an emerging Asian economy–and the mediating effect of sustainable business model innovation (SBMI). It also examines the moderating effect of green dynamic capability (GDC) on the relationship between green IC and SBMI. Design/methodology/approach Data were collected through a survey completed by 324 owners and top managers of manufacturing SMEs in four Pakistani cities. A purposive and snowball sampling approach was used to gather the data. A dual-stage methodological approach (a combination of PLS-SEM and artificial neural networks) was applied to capture both linear connections and complex, hidden, nonlinear patterns between variables. Regression analysis was used to verify the results. Findings The findings indicate that green IC positively contributes to manufacturing SMEs' economic sustainability performance (ECSP), social sustainability performance (SSP), and environmental sustainability performance (ESP) in an emerging Asian economy. SBMI appears to mediate these relationships. Furthermore, GDC strengthens green IC's positive effect on SBMI adoption. The artificial neural network results indicate that green human capital has the highest positive influence on ECSP and SSP, suggesting its pivotal role in achieving SMEs' economic and social sustainability goals. However, green relational capital was identified as having the strongest effect on ESP, indicating its crucial role in driving environmental sustainability in SMEs. Originality/value The present study is a pioneering effort because, to the best of our knowledge, green IC, SBMI, and GDC have never been systematically tested with the ECSP, SSP and ESP of manufacturing SMEs, nor has their predictive ability been analyzed in an emerging Asian economy. Second, this study divulges the mediating role of SBMI in the relationship between green IC and sustainability performance in an emerging market. Third, it adds to the literature by examining the moderating role of GDC in the link between green IC and SBMI and provides valuable insights into how green IC and GDC interact to foster SBMI adoption. Fourth, the study enriches the resource-based view literature by integrating green IC, SBMI, GDC and sustainability performance. Finally, the study is unique in its use of a dual-stage methodological approach consisting of structural equation modeling and artificial neural networks to capture both linear connections and complicated, hidden, nonlinear patterns that conventional statistical approaches might overlook. No study had analytically assessed how the dimensions of green IC affect the ECSP, SSP and ESP of SMEs by employing this hybrid approach so far.

Do corporate social responsibility practices contribute to green innovation? The mediating role of green dynamic capability

Green innovation is increasingly regarded as a strategic approach enabling manufacturing firms to achieve environmental sustainability and maintain a competitive advantage. However, limited research has explored how green dynamic capabilities drive green innovation and sustainable development. This study aims to fill this gap by developing a conceptual framework grounded in the natural resource-based view and dynamic capabilities theory to examine the relationships among green dynamic capabilities, green innovation, and sustainable development. A quantitative survey was conducted with 386 manufacturing firms in Thailand, and structural equation modeling was used to analyze the data. The results reveal that green dynamic capabilities have a significant positive effect on both green innovation and sustainable development. Furthermore, green innovation not only directly enhances sustainable development but also plays a crucial mediating role between green dynamic capabilities and sustainability outcomes. These findings indicate that building green dynamic capabilities enables firms to innovate effectively toward sustainability goals. This study contributes to the literature by integrating dynamic capabilities with green innovation and sustainability research. It also provides practical guidance for managers and policymakers to strengthen green dynamic capabilities and promote green innovation initiatives, ultimately supporting long-term sustainable development in the manufacturing sector.

The present study is undertaken to investigate the underlying mechanism of the relationship between three dimensions of Green Intellectual Capital (GIC), which include Green Human Capital (GHC), Green Structural Capital (GSC), and Green Relational Capital (GRC), with green product innovation (GPDI) and green process innovation (GPRI) within the context of Pakistani manufacturing Small and Medium Enterprises (SMEs). This investigation aims to elucidate the function of green knowledge sharing (GKS) as a mediating mechanism among GHC, GSC, GRC, GPDI, and GPRI by incorporating concepts from the natural resource based view (NRBV) and the knowledge based view (KBV) theories. A quantitative study design was used, with survey data collected from 381 owners and managers of manufacturing SMEs in Pakistan. Structural Equation Modeling (SEM) techniques were used to examine the proposed relationships among these variables. Results show that all components of GIC considerably influence both GPDI and GPRI, directly and indirectly through GKS. GKS has a significant impact on the development of intangible green competencies, resulting in innovative outcomes. This research contributes to the literature by applying NRBV and KBV theories in the context of green innovation within resource constrained SMEs. The study found that these firms can enhance their green innovation performance by leveraging green intellectual capital and cultivating a culture of green knowledge sharing. The study has significant implications for policymakers and business leaders in developing regions, promoting and encouraging the adoption of sustainable approaches.

In today’s competitive world, the growing role of firms’ green innovation (GI) has caused organisations to respond to the demand for sustainable performance. Significantly, increasing environmental awareness has inevitably popularised GI approaches to maximise firms’ sustainable goals. GI receiving international significance has become the prime driver accelerating firms’ socio-ecological practices. Using the theoretical lens of resource-based theory, the study explores the impact of green process innovation, GI strategy and green action innovation on sustainable performance under the mediating role of green product innovation and moderating role of employee green behaviour. The data was collected from the 411 employees working in the Pakistani manufacturing sector. Structural equation modelling (SEM) and Partial Least Squares (PLS) regression were used for the proposed hypothesis testing. The employees’ green initiatives ensure the organisation’s sustainable performance through eco-friendly products. Employee green behaviour moderates between green product innovation and sustainable performance.

Growing pressure for sustainability has intensified the need for small- and medium-sized enterprises (SMEs) to adopt environmental innovation while maintaining competitive performance. This study examines how green innovation strategy, environmental regulations, and green absorptive capacity jointly shape the sustainable performance of Chinese manufacturing SMEs. Drawing on Resource-Based View, Institutional Theory, and Dynamic Capability Theory, we develop and empirically test a model that positions green innovation as a mediating mechanism linking strategic intent and regulatory forces to environmental, social, and economic performance outcomes. Data were collected through a structured survey of 250 SME managers in Jiangsu Province and analyzed using PLS-SEM. Results show that green innovation strategy significantly enhances both green innovation and sustainability performance, and that green innovation partially mediates the effects of both strategy and regulatory pressure on performance. While environmental regulations positively influence green innovation, they do not directly improve sustainability outcomes unless translated into innovation. Furthermore, green absorptive capacity displays a boundary-conditioning role, unexpectedly weakening the strategy–innovation path when knowledge integration exceeds implementation capacity. The findings extend the sustainability-oriented innovation literature by clarifying the indirect nature of regulation–performance linkages and revealing conditions under which absorptive capability accelerates or impedes green transformation. The study offers practical guidance for policymakers seeking to design innovation-enabling regulatory frameworks and for SMEs aiming to balance capability development with strategic focus to advance sustainability transitions.