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

Abstract

This study investigatestheinterrelations amongdigitalorientation(DO),greenabsorptive capacity (GAC), and radicalgreeninnovation (RGI)insmall and medium-sized enterprises (SMEs)inChina, emphasizingthemediatingroleoftherealized-to-potential GAC ratio (R-P ratio) andthemoderating effectofcompetitiveintensity(CI). Data from 157 ChineseSMEs, analyzed through hierarchical regression andthebootstrap method, indicate that a strongdigitalorientationsignificantly enhancestheR-P ratio and RGI.TheR-P ratio mediatestherelationship between DO and RGI, confirming that enhancedgreenabsorptive capacity is crucial for leveragingdigitalorientationtowards effectivegreeninnovation. Furthermore,competitiveintensitypositively moderatestherelationship betweendigitalorientationandtheR-P ratio, enhancingthestrategic useofdigitaltools to manage environmental challenges effectively. These findings extendthedynamic capabilities theory by integratingdigitalandgreendimensions and offer practical insights forSMEsstriving to incorporate sustainable practices through technological anddigitaladvancements. This research enrichesthediscourse onthesynergy between technology and environmental innovation withintheknowledge economy framework, providing valuable perspectives for policymakers and business leaders aiming to foster a sustainable, innovative, and technologically adept business environment.

Keywords

DigitalorientationGreenabsorptive capacityRadicalgreeninnovationSustainable developmentCompetitiveintensityEnvironmental technologySMEsChina