Examining the determinants of green innovation adoption in SMEs: a PLS-SEM approach

Abstract

Purpose Currently, environmental and social concerns have made green innovation more popular among researchers and practitioners around the globe. Developed countries tend to focus more on this issue, compared to developing countries. However, the reality shows that small- to medium-sized enterprises (SMEs) are considered as high contributors to environmental pollution. This study is designed for, and conducted on, SMEs in a developing country, Pakistan. The purpose of this paper is to highlight the main determinants of green innovation adoption in SMEs in Pakistan. Design/methodology/approach A data sample of 288 SMEs from five different sectors was collected and analyzed using the partial least squares structural equation modeling technique. Findings The results of the study indicate that organizational and human resource factors, market and customer factors, and government support and technological factors have a positive and significant impact, whereas external partnership and cooperation, and rules and regulatory factors have an insignificant impact on green innovation adoption in SMEs in Pakistan. Originality/value The outcomes of the study have important implications for managers as well as for government policy makers regarding framing better policies to promote green practices in SMEs.