Driving Financial Sustainability Through Green Product Innovation: Empirical Evidence From Saudi Industrial Firms

Abstract

Green product innovation plays a central role in driving high-quality development. However, little is known about its role in Saudi Arabia’s transitions toward a sustainable economy under Vision 2030. The current study investigates how green product innovation influences long-term financial sustainability through the mediating role of environmental performance and market competitiveness. The study is based on empirical data from 38 Saudi industrial companies spanning 2005 through 2022; the research links the strategic pathways connecting innovative green development directly to bottom-line profitability. The findings demonstrate that developing eco-friendly products significantly boosts financial sustainability, resulting in a substantially stronger economic impact than conventional, non-green product innovation. Furthermore, a firm’s environmental performance and market competitiveness serve as essential mechanisms in securing lasting viability. This research strengthens our understanding of green innovation’s economic value and offers critical policy implications for designing framework strategies that promote environmentally friendly and sustainable growth.