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Artificial Intelligence (AI) Perceptions and Green Innovation in Manufacturing: Unpacking the Roles of Digital Literacy and Openness to Experience Across Pakistan

In: Business and Sustainable Development in a Globalized and Digitalized Era

Author

Listed:
  • Muhammad Azeem Ahmad

    (University of Southern Punjab, Southern Business School)

  • Muhammad Bilal Bhatti

    (University of Southern Punjab, Southern Business School)

  • Zeeshan Ahmed

    (University of Southern Punjab, Southern Business School)

Abstract

In today’s era of rapid technological advancements and intensifying environmental challenges, the integration of Artificial Intelligence (AI) with green innovation has emerged as a strategic imperative for the manufacturing sector. This study examines the relationship between perceptions of AI and green innovative behaviour (GIB), focusing on the mediating and moderating roles of digital literacy and openness to experience. Drawing on the resource-based view (RBV) theory, this study posits that an organization’s comprehension and strategic use of AI constitute a valuable intangible resource that can enhance its capacity for green innovation. Digital literacy functions as a mediating variable that translates perceptions of AI into green innovative behaviour, whereas openness to experience facilitates individuals’ capacity to adapt to the transformations induced by AI. Using structural equation modelling (SEM) to analyze data collected from 353 manufacturing professionals through a structured survey, the study empirically validates the proposed hypotheses. The findings indicate that perceptions of AI significantly enhance green innovative behaviour, with digital literacy serving as a partial mediator. In addition, openness to experience moderates the relationship between perceptions of AI and digital literacy, such that higher openness strengthens the positive association between AI perceptions and digital literacy, underscoring its critical role in enhancing digital literacy. These results underscore the importance of manufacturing firms investing in digital skills development and cultivating a culture of openness and lifelong learning. Beyond theoretical contributions to strategic management, sustainability, and digital transformation, the study offers practical implications by demonstrating the combined importance of technological capabilities and human resource strategies in advancing green transformation within the manufacturing sector.

Suggested Citation

  • Muhammad Azeem Ahmad & Muhammad Bilal Bhatti & Zeeshan Ahmed, 2026. "Artificial Intelligence (AI) Perceptions and Green Innovation in Manufacturing: Unpacking the Roles of Digital Literacy and Openness to Experience Across Pakistan," Springer Proceedings in Business and Economics, in: Zafar U. Ahmed & Nhat Tan Pham (ed.), Business and Sustainable Development in a Globalized and Digitalized Era, pages 221-244, Springer.
    • Handle: RePEc:spr:prbchp:978-3-032-29346-6_12
    DOI: 10.1007/978-3-032-29346-6_12
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