GREEN INNOVATION AND ORGANIZATIONAL PERFORMANCE: THE MEDIATING ROLE OF TECHNOLOGY TRANSFER

Abstract

This study investigates the role of green innovation in enhancing organizational performance in Pakistan’s textile manufacturing sector and examines how technology transfer mediates this relationship. Drawing on Signaling Theory and the Resource-Based View (RBV), green innovation is conceptualized as a higher-order construct comprising product and process innovation. Product innovation focuses on eco-friendly design, recyclable materials, and reduced environmental impact, while process innovation emphasizes sustainable production, energy efficiency, and waste minimization. Technology transfer enables firms to acquire and integrate advanced environmental technologies from external sources, bridging capability gaps and accelerating sustainability adoption.

A quantitative, cross-sectional research design was employed, surveying 230 senior managers from medium-to-large textile firms. Partial Least Squares Structural Equation Modelling (PLS‑SEM) was used to assess the measurement and structural models. Results confirm that both product and process innovations significantly contribute to green innovation, which, in turn, positively influences organizational performance. Technology transfer further enhances this relationship, underscoring its strategic value in accelerating environmental technology adoption. The findings extend Signaling Theory by demonstrating how technology transfer strengthens the credibility of sustainability commitments, and they reinforce RBV by framing green innovation and external technologies as valuable, rare, and inimitable resources. Practically, the study offers actionable insights for managers to integrate internal innovation efforts with strategic technology partnerships, while policymakers can design incentives to promote technology-sharing collaborations. This integrated approach positions firms for sustainable competitiveness in increasingly environmentally conscious markets.