Integrating green business strategies and green competencies to enhance green innovation: evidence from manufacturing firms of Pakistan

Green innovation has become a norm and crucial element of success for modern firms. Manufacturing firms come up with alternative ideas to achieve green innovation. This study proposes that green innovation can be enhanced by amalgamating green business strategies and mastering green competencies within a firm. It isolates itself from previous research by focusing on inherent internal competencies, which could bolster green innovation performance. This integration not only helps firms achieve green innovation but could also improve green value co-creation. Meanwhile, green value co-creation will also mediate the relationship between integrated competencies and green innovation. Data has been collected from the managers of original equipment manufacturers within Pakistan via survey. A total of 319 responses were analyzed using partial least squares structural equation modeling, and empirical results support the proposed hypotheses. The study’s findings suggest that green competencies coupled with green business strategy positively influence green value co-creation and green innovation. Moreover, green value co-creation elevates firms’ green performance and help firms to achieve green innovation. Consequently, theoretical and managerial implications are presented, which adds to this study’s significance under the dynamic capability view.