Green strategic orientations and enterprise performance in SMEs: The mediating role of green innovation

Abstract

This study examines how green strategic orientations contribute to enterprise performance (EP) in small and medium-sized enterprises (SMEs) under increasing environmental and market pressures. Drawing on the natural resource-based view (NRBV) and recent evidence on green innovation (GI) and sustainable performance in SMEs (Liu et al., 2024), it distinguishes between green market orientation (GMO) and green learning orientation (GLO) and investigates their roles in driving GI. Using survey data from 415 Chinese manufacturing SMEs, structural equation modeling with bootstrap analysis is employed to test the proposed relationships. The results show that both GMO and GLO have significant positive effects on GI and EP. GI serves as a partial mediating mechanism linking strategic orientations to performance. Notably, GMO exerts a stronger influence on GI than GLO. These findings suggest that market-driven green strategies provide more immediate triggers for innovation, whereas learning-driven strategies support longer-term capability development. Overall, the results indicate that, under resource constraints, SMEs may achieve faster performance gains through externally oriented green strategies. The study provides practical insights for SME managers in prioritizing green strategic investments and aligning strategic orientation with innovation efforts to enhance performance, thereby contributing to the emerging literature on GLO and sustainable EP in SMEs (Rehman et al., 2024).