Fostering Green Entrepreneurship: The Joint Impact of Innovation Capability, Knowledge Sharing and Circular Economy in SMEs in China

The need and the emerging opportunity of green entrepreneurship have grown at a considerable pace particularly in the manufacturing and technology‐driven small‐ and medium‐sized enterprise sector. The sector should follow sustainable, environmentally friendly, and innovative practices to further reap the benefits of circular economy business approaches. This paper examines how innovation capability, knowledge‐sharing culture, entrepreneurial ecosystem support, and circular business design have compound effects on green entrepreneur success in manufacturing and technology‐related small‐ and medium‐sized enterprises in China. The study, which is conducted on a population size of 550 small‐ and medium‐sized enterprises and results based on PLS‐SEM, establishes that knowledge transfer effectiveness and sustainability mindset are critical mediators and the quality of digital infrastructure is a critical moderator. Results verify an integrated framework that internal capabilities, ecosystem support, and synergy provided by the added impact of digitalization are the prerequisites to attain entrepreneurial sustainability results. These findings offer practical implications to policymakers and managers who may be interested in enhancing green entrepreneurship and future research on sustainable business model innovation.