Artificial Intelligence (AI) and Big Data Analytics push radical changes in the Business Sustainability framework around the globe. However, few studies document their impact in Pakistan’s developing economy. This study fills this gap by exploring the role of AI (in a big data context) and green innovation in shaping firm performance. This study uses a panel data design and aims to analyse 1,650 firm-year observations from 200 Pakistan-based businesses (2015–2023) using matched data from the World Bank Enterprise Survey, State Bank of Pakistan reports, and Bloomberg ESG ratings. The results show that green innovation is significantly predicted by AI adoption ([Formula: see text], [Formula: see text]) and, additionally, Big Data usage ([Formula: see text], [Formula: see text]). Moreover, mediation analysis also reveals a formal indirect effect of these digital technologies on firm performance (ROA) using bootstrapped confidence intervals with green innovation. The findings establish that green innovation acts as a crucial mediator when digital technologies drive competitive advantage. Consequently, firms should align their digital transformation strategies with sustainability targets, while policymakers must encourage sustainable technology adoption to promote sustainable economic expansion in emerging markets.
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Sidra et al. (2026) studied this question.
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