Nexus Between Green Intellectual Capital and Sustainable Performance Through Green Investments Under the Effect of Green Dynamic Capabilities

Abstract

Drawing on Resource base theory this study explores the mediating effect of Green Investments on relationship of Green IC and Sustainability with the moderating role of Green Dynamic Capabilities. Data for hypothesis testing were collected from 250 managerial level employees of the manufacturing SMEs in Lahore through a questionnaire survey. A quantitative approach based on SPSS AMOS analysis and the Hayes Process Macro Model is applied. The results of the analysis indicate that Green Intellectual Capital has a significant and positive impact on SMEs' ability to perform sustainably. This finding supports the notion that effective management of Green Intellectual Capital, which encompasses knowledge, trust-building, and communication channels, is essential for SMEs to ensure sustainable performance. Also, findings indicate that Green Investments play a mediating role in the relationship between Green IC and Sustainable Performance. This suggests that Green Investments act as a catalyst, leveraging the resources and capabilities derived from Green Intellectual Capital to enhance sustainable performance in SMEs. Additionally, the study finds that Green Dynamic Capabilities moderate the link between Green IC and sustainability. This implies that the effectiveness of Green IC in driving sustainable performance is contingent upon the presence of strong Green Dynamic Capabilities within SMEs. The findings of this study contribute to the existing literature by shedding light on the mediating role of Green Investments and the moderating effect of Green Dynamic Capabilities; an aspect not extensively addressed in existing literature. The study provides valuable insights for SMEs seeking to improve their sustainability performance and offers recommendations for the effective management of ecological resources and capabilities. Conclusively, this research contributes to the understanding of how SMEs can achieve sustainability by harnessing their Green Intellectual Capital, leveraging Green Investments, and developing strong Green Dynamic Capabilities. It highlights the importance of incorporating environmentally friendly practices and capabilities into SMEs' strategic initiatives to drive sustainable performance and thrive in the green economy.