Greening your business: Nexus of green dynamic capabilities, green innovation and sustainable performance

This study aims to examine the effect of green dynamic capabilities and green practices on the sustainable performance of SMEs by concentrating on the crucial role of green value co-creation and green innovation. For this purpose, a random sample of 245 respondents was selected working in SMEs in Pakistan, and PLS-SEM was used for data analysis. The findings of the study showed that green dynamic capabilities and green practices are positively related to green value co-creation and green innovation, respectively. Moreover, it was also found that green innovation is a significant contributor to improve the sustainable performance of SMEs. Results also divulged that green value co-creation significantly mediates the relationship of green dynamic capabilities and green practices with green innovation. Lastly, it was found that technology turbulence is a crucial factor to strengthen the association between green innovation and sustainable performance. This study provides insightful understanding for practitioners of SMEs to realize the importance of incorporating green innovation and green value co-creation in their business strategies to boost the sustainable performance.