Green technology adoption and environmental management performance in emerging-economy SMEs: Green dynamic capabilities and green innovation tensions

Purpose

Small and medium-sized enterprises (SMEs) in emerging economies face increasing pressure to improve Environmental Management Performance (EMP) under severe resource constraints. Within the green economy paradigm, green dynamic capabilities (GDCs), a firm’s ability to sense environmental opportunities, seize green markets, and reconfigure processes, are important organizational capabilities associated with improving environmental outcomes. Although green technologies (GT) are widely promoted as a solution, adoption alone may be insufficient. This study examines the association between GT and EMP in SMEs by investigating the mediating role of GDCs and the moderating role of green innovation (GI), drawing on green resource orchestration (GRO) and dynamic capabilities view. METHODOLOGY: A quantitative, cross-sectional design using survey data from 266 Green SMEs in Addis Ababa was employed. Data from owner-managers were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM).

Findings

The total GT–EMP association (estimated from a model without the mediator GDCs) was β = 0.280 (p < 0.001). GDCs show a statistically significant but substantively modest complementary role in the GT–EMP relationship, with an indirect effect through GDCs of β = 0.030 (95% CI [0.008, 0.062]). GI negatively moderates the GDCs–EMP relationship (β = -0.186, p = 0.002) in the main model. However, this effect is not robust to the inclusion of firm-level controls.The cross-sectional design precludes causal claims. IMPLICATIONS: The study contributes to the GRO and GDCs literature by providing findings consistent with a GRO interpretation, suggesting that EMP is associated with managerial coordination beyond mere resource possession. For practitioners and policymakers, the findings highlight the importance of balancing technology adoption and innovation with internal capability development. ORIGINALITY & VALUE: This research provides novel empirical evidence from an underexplored African emerging economy and demonstrates a negative moderating role for GI in the sustainability capability nexus.