Unveiling the drivers of green innovation and their impact on sustainability performance: the mediating role of circular economy practices

PurposeAchieving sustainability goals for manufacturing firms depends on green human resource management practices and green intellectual capital. This study explores how sustainable approaches, such as green human resource management practices, green intellectual capital, sustainable leadership and green innovation, enhance sustainable performance. Therefore, this study aims to determine whether green intellectual capital and innovation mediate between green human resources management practices and sustainable performance in Pakistan’s manufacturing industry.Design/methodology/approachThe data were collected from 458 executives representing 155 (SMEs) in the manufacturing sector in Pakistan using a self-administered questionnaire. Partial least squares structural equation modeling was employed for the data analysis.FindingsThe results indicated that green human resource management practices positively impact green intellectual capital, green innovation and sustainable performance. Additionally, green intellectual capital significantly affects both green innovation and sustainable performance. Furthermore, green intellectual capital and innovation mediate the relationship between green human resource management practices and sustainable performance. Results also reveal that sustainable leadership significantly moderates the relationships between green human resource management practices, green intellectual capital and green innovation.Practical implicationsThe results of this study assist practitioners in appreciating and assessing the significance of green intellectual capital and green human resource management techniques. It also emphasizes the importance of green innovation and sustainable leadership in fostering sustainable performance.Originality/valueThis study guides managers and policymakers on how green human resource management practices, intellectual capital, innovation and sustainable leadership enable firms to achieve sustainable performance goals.

Green innovation is increasingly recognized as a critical strategy for small‐ and medium‐sized enterprises (SMEs) to enhance sustainable performance. Drawing on the natural resource‐based view (NRBV), this study examines the impact of green innovation on sustainable performance and the mediating roles of green knowledge sharing and green dynamic capabilities. In addition, the moderating effect of artificial intelligence (AI) on these relationships was investigated. Data were collected from 230 SMEs in two phases, and the hypotheses were analyzed. The findings reveal that green innovation is positively related to sustainable performance, with green knowledge sharing and green dynamic capabilities mediating this relationship. Furthermore, AI significantly moderates the relationship between green knowledge sharing, green dynamic capabilities, and sustainable performance. These results suggest that integrating AI into SMEs can enhance the promotion and effectiveness of green innovation strategies. This study contributes to the literature by providing empirical evidence for NRBV and highlighting the importance of green knowledge sharing, green dynamic capabilities, and AI in the context of green innovation and sustainable performance. These findings offer valuable insights for SME managers and policymakers seeking to foster sustainable development through green innovation and AI adoption.

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.

The present study aims to investigate the roles of agricultural firms' green dynamic capabilities (DCs) and 'motivation to achieve legitimacy' in the relationship between green intellectual capital (IC) and green innovation. We posit the 'resource-capability-outcome' model according to which green IC is an important strategic resource which helps firms to build and increase green DCs in order to achieve green innovation outcomes. The data were collected from 146 firms operating in both primary and secondary sectors. Partial least squares structural equation modelling (PLS-SEM) was used with WarpPLS 8.0 to process and analyse the data. The results indicated that green DCs serve as an important underlying mechanism and mediate the relationship between green IC and green innovation. Moreover, results also supported the moderating role of the firms' motivation to achieve legitimacy, implying that high motivation strengthens the relationship between green DCs and green innovation. However, the results did not support moderation for the relationship between green IC and green DCs.

ABSTRACTGreen intellectual capital (consisting of green relational capital, green structural capital and green human capital) serves as a valuable resource for environmental protection, providing firms with green information and technologies that contribute to green innovation. However, the resource‐based view emphasises that the relationship between resources and performance can be complex and indirect. Unlocking the value of resources and enhancing firm performance require a resource integration process. In this context, the mechanism linking green intellectual capital to green innovation warrants further exploration. While recent studies have focused on external integration, this study underscores the importance of internal integration processes to understand the relationship between green intellectual capital and green innovation. Specifically, we investigate how green dynamic capability mediates the relationship between green intellectual capital and green innovation. Additionally, we examine the positive moderating effect of organisational slack on the relationship between green intellectual capital and green dynamic capability. To achieve this goal, we collected data from 211 firms in Anhui Province, China, and employed partial least squares structural equation modelling (PLS‐SEM) and SmartPLS software. Our findings indicate that both green relational capital and green structural capital positively impact green innovation, with green dynamic capability mediating these relationships. Additionally, organisational slack positively moderates the relationship between green relational capital and green dynamic capability, whereas it negatively moderates the relationship between green structural capital and green dynamic capability. Our study contributes to the existing body of research on the relationship between the green intellectual capital and green innovation by explaining the mediating role of green dynamic capability and the moderating effects of organisational slack. Additionally, we offer practical implications for firms striving to transform green intellectual capital into green innovation.

Purpose This study aims to examine how intellectual capital influences triple-bottom-line sustainable performance, with green innovation acting as a mediator and artificial intelligence serving as a boundary condition. Design/methodology/approach This study develops a conceptual model grounded in prior research and validates it through Partial Least Squares Structural Equation Modelling using survey data from 431 SMEs in Vietnam. Findings Green intellectual capital has a substantial positive impact on green innovation and sustainable performance. Green innovation mediates the relationship between green intellectual capital components and sustainable performance. Artificial intelligence (AI) exhibits direct associations with key outcomes, whereas the moderating effect of AI on the relationship between green innovation and sustainable performance is not supported. Practical implications Managers should prioritise investments in green intellectual capital to build innovation capabilities and improve sustainability outcomes, while sequencing AI deployment with complementary data, skills and process integration. Originality/value This study advances the existing literature by specifying sustainable performance in a triple-bottom-line framework and empirically examining the mediating pathway from green intellectual capital to green innovation and, in turn, to performance, while simultaneously evaluating artificial intelligence as a boundary factor in the SME setting of an emerging economy.

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

The increasing recognition of environmental concerns has prompted both nations and corporations to adopt green innovation as a significant strategy for addressing environmental risks and promoting sustainable development. To excel in this pursuit, companies must cultivate green dynamic capabilities, infusing environmental considerations into their strategic decision-making processes. The purpose of this study is to investigate the association between strategic orientation components and green dynamic capabilities, as well as their impact on green product and process innovation, in medium-to-large-sized manufacturing firms in China. Employing a quantitative methodology, an online cross-sectional research design was used to gather 582 valid responses through a structured questionnaire. Results indicated a positive association between learning orientation and green dynamic capabilities. Furthermore, green dynamic capability was found to mediate the relationship between learning orientation and green product and process innovation. However, no significant relationship was observed between green entrepreneurial orientation, market orientation, internationalisation orientation, and green dynamic capabilities. By conducting multi-group analysis and studying the context of Chinese manufacturing firms, this research contributes new insights into the relationship between resource-based theory constructs and green innovation, including the integration of green dynamic capabilities. The results emphasise the significance of adopting a learning mindset, developing green dynamic capabilities, and fostering green innovation. These findings offer useful insights for the Chinese manufacturing industry, enabling it to strengthen its competencies in green innovation.

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.

Although organizational green culture and environmental ethics are increasingly acknowledged as crucial, few studies have comprehensively examined the interconnected relationship between green innovation and sustainable performance, particularly within manufacturing firms. As such, this study empirically examines the relationship between environmental ethics and sustainable performance through the mediating roles of green process and product innovations and the moderating role of organizational green culture on these relationships. It is grounded in stakeholder theory and a resource-based view. This study utilizes 236 valid cross-sectional data points from manufacturing firms in Turkey to test the proposed integrated theoretical model through structural equation modeling (SEM). Environmental ethics is positively associated with sustainable performance, green process innovation, and green product innovation. Green process innovation positively affects sustainable performance. Additionally, both green process and product innovations mediate the relationship between environmental ethics and sustainable performance. Moreover, organizational green culture enhances the relationship between environmental ethics and both green process innovation and green product innovation while moderating its role in sustainable performance. The findings highlight how environmental ethics, mediated by green innovation and moderated by organizational green culture, can drive sustainable performance, offering valuable insights for managers aiming to enhance sustainability initiatives in the manufacturing sector.

The modern business environment depends on green innovation to achieve sustainable growth through environmentally friendly products that boost both operational effectiveness and market competencies. Research explains how external environmental pressures relate to green innovation measures alongside their effects on firm performance and continues to grow more because current studies show insufficient evidence of these interdependent connections. The study examines multiple elements affecting green innovation performance through external influences to help organizational leaders, together with policymakers, bring sustainable practices into an environmentally aware business market. This study investigated the influence of green innovation on firm performance only through the subjects of management engagement, customer demand for sustainability, and supply chain risk. Optimizing green innovation is a strategic process aimed at increasing the long-term resilience and sustainable performance of an organization. The study draws from theories of green innovation, sustainability, and firm performance, hypothesizing interactions among green practices, managerial support, consumer preferences, and supply chain dynamics. The study combines environmental policies, employee involvement, and external collaboration to enhance its theoretical framework. The quantitative method of PLS-SEM was used to analyse data gathered from 621 companies in Pakistan. This approach uses structured questions to measure constructs, which include green product innovation, green process innovation, management commitment and firm performance. Green product and process innovation drives the performance of a firm, with both management and consumers in need of sustainability. However, supply chain risks reduce the impacts. The findings imply that sustainability in central business and supply chain shortcomings are three factors that need to be considered. The research includes empirical findings related to green innovation. It can help managers develop sustainable policies that are performing well in coping with market requirements and reducing risk. It also shows companies’ contributions to the progress of environmental goals. The study reconnects determinants and impediments of green innovation; it highlights the influence on the firm and provides principal implemented indications towards the aim of sustainable exercise.

Purpose This study aims to investigate how green intellectual capital (GIC) contributes to sustainable business performance (SBP) in Vietnam’s hospitality sector by examining the mediating roles of green human resource management (GHRM) and green innovation (GI), as well as the enabling influence of environmental regulations (ERs) and green transformational leadership (GTL). It extends the resource-based view, the natural resource-based view and institutional theory by focusing on Vietnam’s hospitality industry, which is characterized by labor intensity, uneven regulatory enforcement and cultural barriers to sustainability adoption. Design/methodology/approach A survey was distributed to 436 departmental and general managers from hotels and resorts located in major tourist destinations across Vietnam. The proposed relationships among green capabilities, organizational practices and sustainable outcomes were tested using partial least squares–structural equation modeling. Findings The results show that GIC significantly influences GI and GHRM, which in turn enhance SBP, ERs and GTL exert both direct and indirect effects on performance outcomes. The mediation analysis confirms the complementary roles of GI and GHRM in translating GIC into sustainability outcomes. Although these overall effects are generally positive, the findings also reveal boundary conditions related to financial and technical resources that may constrain the implementation of advanced sustainability initiatives in the hospitality sector. Originality/value This study enriches sustainability research by illustrating how context-specific dimensions of GIC, including frontline environmental behaviors, organizational processes and stakeholder collaboration, are mobilized through ERs and GTL in an emerging economy characterized by weak institutional enforcement. The findings offer practical knowledge for hospitality managers seeking to integrate sustainability into human resource and innovation systems and provide policymakers with evidence on how regulatory alignment and leadership commitment can jointly accelerate sustainable transformation in the hospitality industry.

PurposeThe manufacturing industry has recently faced many environmental issues and pressures due to increased environmental awareness. Business leaders identified that green innovation (GI) is a crucial aspect of sustainable development (SD) and can provide a competitive edge. On the other hand, boosting SD through GI is a complicated network activity involving various partners, and there is a need to transmit or share knowledge equitably and acceptably. Following the natural resource-based view (NRBV), this research presents a novel framework for investigating how green knowledge sharing (GKS) and green dynamic capabilities (GDC) affect green creativity (GC) and GI directly and through GC. Besides, the moderation of mimetic pressure (MP) was also evaluated in these targeted relations, as it is a critical element for enhancing GI in the context of SD.Design/methodology/approachData consisted 232 respondents from Pakistani manufacturing industries, and seven substantial hypotheses were verified regarding the direct, mediating and moderating effect of targeted variables in confounding ways using partial least squares structural equation modeling (PLS-SEM).FindingsAccording to the empirical findings, GKS and GDC positively correlate with GC and GI. Moreover, GKS and GDC significantly and positively impact GI both directly and indirectly. Furthermore, GC partially mediates GI, whereas MP has a significant moderating effect in these relationships.Originality/valueA significant correlation among these constructs was observed, demonstrating the conceptual framework for this study. These findings can assist practitioners and academics gain a better understanding of how to manage and evaluate GI in manufacturing projects at both the project and firm levels. Therefore, policymakers and project managers can enhance GI by focusing more on GKS, GDC, MP and GC.

This study examines the economic impact of fintech adaptation on sustainability performance in the Indonesian banking sector, with green finance and green innovation as mediating variables. A quantitative research approach was employed, utilizing secondary data from six Indonesian banks listed on the Indonesia Stock Exchange (IDX) from 2019 to 2023. Path analysis was applied to evaluate to assess relationships among fintech adaptation, green finance, green innovation, and sustainability performance. The findings reveal that fintech adaptation significantly influences green finance but has a limited impact on green innovation and direct sustainability performance. Additionally, green finance and green innovation do not significantly mediate the relationship between fintech adaptation and sustainability performance. These results highlight the challenges of integrating fintech into sustainable banking initiatives in emerging markets. The study underscores the need for enhanced regulatory frameworks, strategic fintech adoption, and increased collaboration among financial institutions to drive sustainability efforts. Future research should explore additional factors influencing sustainability performance in banking.

The sudden outbreak and long-term trend of COVID-19 have brought huge attacks and uncertainty to the global economy, forcing countries to introduce various policies frequently to stimulate economic recovery. To realize sustainable development, firms established an environment-friendly economic development model by building a circular supply chain and implementing a green innovation strategy, which is expected to save resources and protect the environment by recycling resources. Based on this background, this study aims to determine the relationship between the uncertainty of economic policy, green innovation strategy, and circular supply chain performance. It divides green innovation strategies into green product innovation, green process innovation, green service innovation, and green logistics innovation to explore their different impacts on the performance of the circular supply chain. Simultaneously, the moderating effect of uncertainty of economic policy between green innovation and the performance of the circular supply chain is explored. Using survey data collected from 308 manufacturing firms in China, we empirically test the theoretical model and proposed hypotheses through the structural equation modeling approach. Our findings demonstrate that green product innovation, green process innovation, green logistics innovation, and green service innovation have a positive impact on the performance of the circular supply chain. Moreover, we also find that, contrary to our expectations, economic policy uncertainty plays a positive role in moderating the relationship between green innovation and circular supply chain performance. We believe that this paper has a clear contribution to the research on green innovation and circular supply chain management. This study provides a new perspective for the research on the integration of green innovation and circular supply chain, deepens firms’ understanding of green innovation strategy and circular supply chain, and provides important implications and guidance for manufacturing firms to better manage green innovation and circular supply chain practice as well as the risk of economic policy uncertainty.