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Growing environmental concerns and the imperative for sustainable development have significantly reshaped global business practices, particularly within the manufacturing sector. This study investigates how green organizational strategy (GOS) and green absorptive capacity (GAC) influence environmental performance (EP) among Chinese manufacturing SMEs, with green innovation (GI) serving as a mediator and environmental strategy (ES) acting as a moderator. Grounded in an integrated theoretical framework combining the Resource-Based View (RBV), Institutional Theory, Stakeholder Theory, and the Triple Bottom Line (TBL) approach, the study collected data from 405 small and medium-sized enterprises (SMEs) through a structured survey. Using SmartPLS-SEM, the results reveal that both GOS and GAC have a significant and positive effect on GI and EP (R2 = 0.824, p < 0.001). GI partially mediates the relationships between GOS–EP and GAC–EP, whereas ES negatively moderates the GI–EP link, suggesting that highly formalized environmental strategies may constrain innovation outcomes. The findings contribute theoretically by integrating multiple perspectives into a unified sustainability framework and empirically by demonstrating how organizational capabilities drive triple-bottom-line performance in emerging-economy SMEs. Practically, the study offers actionable insights for policymakers and managers to strengthen environmental governance, invest in absorptive capacity, and align innovation policies with strategic sustainability goals.
Javed et al. (Wed,) studied this question.
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