The impact of sustainability‐oriented dynamic capabilities on firm growth: Investigating the green supply chain management and green political capabilities

Abstract

AbstractBuilding on the dynamic capabilities literature and natural‐resource‐based view, the paper examines whether firms can attain sales growth through a range of sustainability‐oriented dynamic capabilities including (1) internal green supply chain management capabilities, (2) external green supply chain management capabilities and (3) green political capabilities. Based on a dataset of 277 public US firms between 2010 and 2020, a panel quantile model of firm growth showcases that while internal green supply chain capabilities and green political capabilities affect firms' growth performance positively, external green supply chain capabilities are associated with slower growth. Importantly, the results indicate that the positive growth effects of green political capabilities are short‐lived, while those of internal green supply chain capabilities are long‐lived. The study contributes to the sustainability‐oriented dynamic capabilities literature by showing that different capabilities have different implications for firm growth depending on the firm's base performance and the time periods under consideration.