Green dynamic capability and green product innovation for sustainable development: Role of green operations, green transaction, and green technology development capabilities

Abstract This study explored how three capabilities—green operations, green transactions, and green technology development—impact the relationship between manufacturing firms' green dynamic capability and green product innovation. The study surveyed 216 manufacturing firms in China and analyzed the data using structural equation modeling. The results showed that a company's green dynamic capability has a significant and positive effect on green product innovation. Additionally, the study found that: Green operations capability partially mediates the relationship between green dynamic capability and green product innovation; green transaction capability also partially mediates this relationship; and green technology development capability positively moderates the relationships between both green operations capability and green transaction capability and green product innovation. The study's findings suggest that managers should focus on developing their company's ability to adapt and rebuild resources, including technological and green resources, to stay competitive in a changing business environment.