Strategic Enablers of SMEs Sustainability: Examining Green Innovation, Internal Learning and External Pressure Mechanisms in Saudi SMEs

Aligned with Saudi Arabia’s Vision 2030, which emphasizes sustainability, innovation, and economic diversification, this study investigates how green innovation (GI), organizational learning (OL), and regulatory pressure (RP) influence sustainability performance (SP) among small and medium-sized enterprises (SMEs). Additionally, addressing a key theoretical gap, this study examines OL as a mediating mechanism and RP as a moderating factor in the GI–SP relationship, an area rarely explored in emerging economies. Grounded in the Resource-Based View and Dynamic Capabilities Theory. Methodology: This study adopts a quantitative, cross-sectional design and gathers data from 386 SME employees across Saudi Arabia using validated survey instruments. SPSS analysis revealed that GI significantly improved SP both directly and indirectly via OL, highlighting the critical role of internal learning capabilities. Furthermore, RP positively moderates the effect of GI on SP, indicating that supportive regulatory environments can amplify the benefits of innovation for sustainability outcomes. This study contributes to the literature by integrating internal capabilities and external pressures into a cohesive framework for understanding sustainability. Empirically, it offers fresh insights into the under-researched SME sector in Saudi Arabia. Practically, the findings provide valuable guidance for managers and policymakers to promote sustainability through enhanced learning culture and well-structured regulatory frameworks.