Sustainable development and green innovation: The role of green dynamic capabilities

Abstract

Green innovation is increasingly regarded as a strategic approach enabling manufacturing firms to achieve environmental sustainability and maintain a competitive advantage. However, limited research has explored how green dynamic capabilities drive green innovation and sustainable development. This study aims to fill this gap by developing a conceptual framework grounded in the natural resource-based view and dynamic capabilities theory to examine the relationships among green dynamic capabilities, green innovation, and sustainable development. A quantitative survey was conducted with 386 manufacturing firms in Thailand, and structural equation modeling was used to analyze the data. The results reveal that green dynamic capabilities have a significant positive effect on both green innovation and sustainable development. Furthermore, green innovation not only directly enhances sustainable development but also plays a crucial mediating role between green dynamic capabilities and sustainability outcomes. These findings indicate that building green dynamic capabilities enables firms to innovate effectively toward sustainability goals. This study contributes to the literature by integrating dynamic capabilities with green innovation and sustainability research. It also provides practical guidance for managers and policymakers to strengthen green dynamic capabilities and promote green innovation initiatives, ultimately supporting long-term sustainable development in the manufacturing sector.