Corporate Sustainability and Service Innovation; Moderating role of absorptive capacity

Abstract

Purpose: The study’s goal is to examine the effect of corporate sustainability dimensions on service innovation. It further investigates the moderating role of the absorptive capability of the firm.Design/methodology/approach: Using purposive sampling, data are collected from individuals in service firms across diverse industrial sectors in Ghana. A total of 628 questionnaires were dispersed to diverse service enterprises within the period from March 2021 to June 2021. After the data collection, the response rate achieved was 82% translating into over 500 answered questionnaires. A total of 514 answered questionnaires are used for empirical analysis.Findings/results: The outcome of the study indicates environmental sustainability practices, economic sustainability practices and social sustainability practices had an impact on the service innovation process and outcome. In addition, absorptive capabilities of service enterprises are found to positively moderate the link amid the scopes of corporate sustainability practices and service innovation.Practical implications: Managers and firms need to implement their internal innovation capabilities in order to derive significant and positive effects on corporate sustainability practices. The integration of corporate sustainability and service innovation in small and medium enterprises (SMEs) is imperative.Originality/value: The outcome of the research contributes to the increasing body of literature on the liaison between corporate sustainability and service innovation by offering insights into environmental, social and economic sustainability practices. This shapes the sustainability direction and procedures towards the transmittal of value-added services.