Green intellectual capital and organizational learning: pathways to sustainable innovation and firm performance in Pakistani SMEs

Abstract

Purpose This study investigates the impact of green intellectual capital (GIC) on green innovation (GI) and firm performance (FP) in Pakistani manufacturing small and medium-sized enterprises (SMEs). The study aims to analyze the mediating role of organizational learning capability (OLC) between GIC and GI and evaluate the direct and indirect effects of GIC and GI on FP. Design/methodology/approach A quantitative research approach was employed, using partial least squares structural equation modeling to test the proposed relationships. The data were collected from 452 executives across Pakistani manufacturing SMEs in sectors including textile and apparel, food processing, and chemical manufacturing. A structured, self-administered survey was conducted over a three-month period (February to April 2025). Findings The results demonstrate that GIC significantly influences GI and FP, with OLC mediating the relationship between GIC and GI. GI also positively impacts FP, both directly and indirectly through GIC and OLC. Practical implications This study contributes to the resource-based and dynamic capabilities literature by highlighting the role of intangible green resources in driving sustainable innovation and enhancing firm performance. For SMEs, investing in intangible green assets and integrating organizational learning capabilities are crucial for fostering innovation and achieving sustainability. Policymakers and business leaders can leverage these insights to support green innovation and promote long-term sustainable growth. Originality/value This study expands on the RBT and dynamic capabilities theory by examining the role of GIC and OLC in driving GI and sustainable firm performance within Pakistani SMEs, offering a unique contribution to the literature on sustainability in emerging economies.