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Abstract This study examines the impact of sustainability innovation on innovation performance and the mediating effects of knowledge sharing and knowledge application on this relationship. We hypothesize that small and medium-sized enterprises implementing sustainability innovation are able to achieve better innovation outcomes. We tested the hypotheses using structural equation modeling and Smart PLS on a data set of 185 industrial companies. The results support our conceptualization and demonstrate its utility in explaining improvements in achieving innovation performance if sustainability innovation is adopted. Simultaneously, we demonstrate that knowledge sharing and knowledge application mediate the effects of sustainability innovation on innovation performance. Findings have important implications regarding sustainability innovation implementation in industrial companies and its impact on improving innovation outcomes, both direct and mediated by knowledge sharing and knowledge application.
Ceptureanu et al. (2025) studied this question.