Sustainable transformation: An interaction of green entrepreneurship, green innovation, and green absorptive capacity to redefine green competitive advantage

Abstract This study examines the moderated mediation model grounded in the natural resource‐based view (NRBV) theory, evaluating the influence of green entrepreneurial orientation (GEO) on green competitive advantage (GCA) in Pakistani manufacturing firms. It emphasises the mediating role of green innovation (GI) and the conditional impact of green absorptive capacity (GAC). The study used hierarchical regression and moderated mediation analyses on a dataset consisting of 373 responses. The results reveal that GEO significantly influences GCA, with both radical and incremental GI (IGI) partially mediating this relationship. Moreover, the relationship between GEO, radical GI (RGI), and GCA is strengthened when GAC is high. The moderated mediating effects reveal that the mediating role of RGI is more pronounced when GAC is high. These findings provide valuable insights into enhancing green competitiveness by promoting eco‐innovation in manufacturing companies and advancing green entrepreneurship research.