Enhancing innovation performance in renewable energy through sustainable business model innovation: The moderating role of industry 4.0 technologies

Environmental management has traditionally been regarded as a compliance requirement and profit-driven activity. Emerging scholarship, however, shows a shift toward understanding corporate sustainability as a strategic initiative. Building on this view, the present study draws on the behavioral theory of the firm to propose a framework that explains how firms translate their innovation performance gains into substantive sustainability initiatives, such as renewable energy initiatives. A moderated mediation model is developed to clarify the pathway through which these gains can be systematically directed rather than resulting from random decisions, and to identify conditions that may influence this process. The model is tested using panel data from Chinese-listed firms between 2010 and 2023, applying mixed-effects modeling with a range of robustness and endogeneity checks. Results indicate that innovation performance gains are positively associated with renewable energy initiatives, with sustainable business model innovation serving as a partial mediator. Industry 4.0 technologies appear to be an important contextual factor that strengthens this relationship. The findings offer policy implications for fostering innovation-led growth, encouraging the industry 4.0 technologies, and advancing a transition to a low-carbon economy.