Impacts of green innovation on small and medium enterprises' performance: The role of sustainability readiness and firm size

Abstract

AbstractThis study investigates the influence of green innovation and technology in both products and processes on the performance of small and medium‐sized enterprises (SMEs) in Thailand. Additionally, it explores the impact of firm size and sustainability readiness on SME performance and examines the moderating and mediating effects of these factors on the relationship between innovation and firm performance. Structural equation modeling (SEM) was employed as the methodological approach, utilizing a sample of 421 SMEs in Thailand. The findings reveal that green innovation and sustainability readiness significantly contribute to SME performance. Sustainability readiness is identified as a mediator, underscoring its significant role in mediating the relationship between green innovation and firm performance. Furthermore, firm size is confirmed as a moderator, indicating that the influence of green innovation on firm performance is contingent upon the firm's size. These findings have significant implications for SMEs, providing valuable insights into strategic investments in sustainability readiness and green innovation as avenues for enhancing performance and competitiveness.