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Navigating Competitive Intensity: The Role of Digital Orientation in SMEs’ Green Innovations

Author

Listed:
  • Xiu-e Zhang

    (Jilin University)

  • Wei Wang

    (Jilin University)

  • Xinyu Teng

    (Jilin University)

  • Liu Yang

    (Jilin University)

Abstract

This study investigates the interrelations among digital orientation (DO), green absorptive capacity (GAC), and radical green innovation (RGI) in small and medium-sized enterprises (SMEs) in China, emphasizing the mediating role of the realized-to-potential GAC ratio (R-P ratio) and the moderating effect of competitive intensity (CI). Data from 157 Chinese SMEs, analyzed through hierarchical regression and the bootstrap method, indicate that a strong digital orientation significantly enhances the R-P ratio and RGI. The R-P ratio mediates the relationship between DO and RGI, confirming that enhanced green absorptive capacity is crucial for leveraging digital orientation towards effective green innovation. Furthermore, competitive intensity positively moderates the relationship between digital orientation and the R-P ratio, enhancing the strategic use of digital tools to manage environmental challenges effectively. These findings extend the dynamic capabilities theory by integrating digital and green dimensions and offer practical insights for SMEs striving to incorporate sustainable practices through technological and digital advancements. This research enriches the discourse on the synergy between technology and environmental innovation within the knowledge economy framework, providing valuable perspectives for policymakers and business leaders aiming to foster a sustainable, innovative, and technologically adept business environment.

Suggested Citation

  • Xiu-e Zhang & Wei Wang & Xinyu Teng & Liu Yang, 2025. "Navigating Competitive Intensity: The Role of Digital Orientation in SMEs’ Green Innovations," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 2880-2908, March.
    • Handle: RePEc:spr:jknowl:v:16:y:2025:i:1:d:10.1007_s13132-024-02110-9
    DOI: 10.1007/s13132-024-02110-9
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