CHALLENGES OF SUSTAINABLE DEVELOPMENT: ANALYZING THE IMPACT OF GREEN TECHNOLOGY CAPABILITY ON SUSTAINABLE PERFORMANCE

Abstract

This study explores the factors influencing green innovation (GRIN) in small and medium-sized enterprises (SMEs) and the role of green technology capability (GTC) as a moderating variable. Green innovation, which includes technologies and practices aimed
at reducing environmental impact, is crucial for sustainable development but is challenging for SMEs due to resource constraints. This research focuses on three main drivers: green absorptive capacity (GAC), sustainable human capital (SHC), and organizational support (OS). GAC enables firms to assimilate and apply external environmental knowledge, while SHC emphasizes environmentally oriented skills and values among employees. OS, including policies and resource provision, fosters a supportive environment for GRIN. The study reveals that each of these factors positively influences GRIN and that GTC strengthens these relationships by allowing firms to
integrate green technologies more effectively. Empirical data from Pakistani SMEs highlights GTC’s significant role in enhancing the environmental, economic, and social benefits of GRIN. This research contributes to the literature on sustainable business practices and suggests that SME leaders invest in green technologies to support GRIN. It also encourages further exploration of GTC’s impact across different industry sectors.