Unpacking organizational capabilities and green Innovation for sustainable Performance: The role of environmental regulations in manufacturing industry

Abstract

The research examines the multidimensional relationship among organizational capability green commercial enterprise practices green innovation environmental regulation and sustainable environmental performance. The research goal is to identify how organizational capabilities and green enterprise practices contribute to overall environmental performance and how those relationships are mediated by using green developments. Further it examines environmental regulation's facilitating role between green innovation and sustainable environmental performance. The study used natural resource-based (NRB) perspective and organizational theory which show that firms with strong organizational capabilities and well-defined green enterprise practices tend to achieve higher sustainability and environmental performance. Based on a purposive/selection sampling method a quantitative design was used to accumulate data from companies (375 respondents) in distinctive production industries in Jiangsu a significant industrial hub with unique environmental economic and regulatory frameworks providing a compelling setting for this study China. Structural equation modeling (SEM) was used to test the proposed relationship. Innovation has emerged as a crucial mediator translating the effect of green factors and approaches into a natural environment. The study explored complying with environmental regulations regulate innovation and performance in addition to the effect of organizational capabilities and green innovation practices on environmental productivity which may enhance or hinder sustainable environmental performance. The results offer valuable insights for theory and practice and highlight the significance of shaping organizational competencies and green policies for environmental sustainability. Furthermore the goal spotlights the vital role of green innovation as a way for firms to put in force their skills and strategies for better surroundings and shed light on how environmental law can improve those efforts or prevent feasible environmental degradation. © 2025 Elsevier B.V. All rights reserved.