From Green Capabilities to Green Outcomes: Examining Green Competencies and Green Strategies in Achieving Sustainable Performance Under Environmental Pressures

This study investigates the relationship between green competencies, green business strategy, green innovation, and environmental regulations on organizational performance and environmental performance. This research applies two distinct approaches, PLS‐SEM and fsQCA, to analyze symmetric and asymmetric data. These methods offer a comprehensive examination, rather than linear relationships, for understanding the complexities involved in the relationships between all higher and lower‐order constructs. Integrating two prominent theories, the natural resource‐based view theory and institutional theory, to analyze the complex interactions between green competencies, green business strategy, and sustainable organizational performance and environmental performance outcomes has increased the novelty of this research. These theories help to enhance understanding of how organizations can leverage their unique resource endowments and respond to external institutional pressures to drive green innovation and achieve superior organizational and environmental performance. Employing rigorous statistical analysis, findings establish positive and significant direct paths between green competencies and green business strategy and operational performance and environmental performance. Furthermore, the research reveals that green innovation plays a pivotal mediating role, effectively translating the influence of GC and GBS into tangible improvements in organizational performance and environmental performance. Moreover, environmental regulation exerts a moderating effect between green innovation, organizational performance, and environmental performance, emphasizing the importance of regulatory considerations in sustainable business endeavors.