Investigating the impact of dynamic and relational learning capabilities on green innovation performance of SMEs

Abstract

As a country that is quickly developing, the Malaysia government has shown serious commitment to green innovation performance. The government has continuous efforts in advancing the green technology in all small and medium enterprise (SME) sectors in Malaysia. This advancement aligns with the expectation that the green technology sector will be a key driver for improving the national economy through the promotion of sustainable development. Many companies from different sectors in Malaysia has been encouraged to adopt green innovation practices. SMEs that adopts green innovation strategies quickly would definitely obtain competitive advantages against their competitor. Thus, increasing green innovation performance will enable SMEs to increase their efficiency and effectiveness while maintaining its core competency. This research investigates the relationship between dynamic capabilities, relational learning capabilities, and green innovation performance. In addition, the research also investigated the mediation impact of relational learning capabilities between dynamic capabilities and green innovation performance. This study applied variance based equation modeling through partial least square to a sample of 249 from the manufacturing SMEs in Malaysia. The results suggest that there is a positive and significant relationship between dynamic capabilities and green innovation performance. In addition, the research found a positive and significant relationship between dynamic capabilities and relational learning capabilities. Moreover, there is also a positive and significant relationship between relational learning capabilities and green innovation performance. Furthermore, the research found that relational learning capabilities mediate the relationship between dynamic capabilities and green innovation performance. These results could enlighten owner/managers of SMEs manufacturing industry in adoption of green innovation performance practices especially from the dynamic capabilities and relational learning capabilities landscape.