Understanding the nexus of green innovation and sustainable performance: evidence from the tourism industry in Indonesia

Abstract

Purpose – This study examines the role of green innovation strategy (GIS) and green innovation readiness (GIR), particularly technology readiness (TR), organizational readiness (OR), and environmental readiness (ER), in facilitating the implementation of green innovation (GI) and its subsequent impact on sustainable performance (SP). These readiness factors help organizations prepare for effective GI adoption and sustainability transition. Design/methodology/approach – A quantitative research approach was employed to test two structural models using data from 286 respondents representing SMEs in tourist areas within the Yogyakarta Special Region. Structural Equation Modeling (SEM) was used to examine the effects of readiness factors on GI and sustainability performance. Findings – The first model confirms that both GIS and GIR positively and significantly affect GI, which, in turn, has a significant positive impact on SP. The second model further demonstrates that TR, OR, and ER each have positive and significant effects on GI, which subsequently enhances environmental, economic, and social sustainability outcomes. Originality/value – This study advances the literature by offering an integrated framework that simultaneously investigates GIS, GIR, GI, and SP within a single model. By focusing on tourism-based SMEs in a developing country context, this study provides new empirical insights into how strategic and readiness-based factors interact to support green innovation.