Issue

Vol. 13 No. 2 (2026): September

Date Log

Submitted
11 December 2025
Accepted
11 July 2026
Published
22 July 2026

Copyright (c) 2026 Muhammad Ali Fikri, Wakhid Slamet Ciptono, Muhammad Hamdi, Poppy Laksita Rini (Author)

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Green Supply Chain Management, Green Dynamic Capability, and Business Sustainability: The Role of Green Innovation

https://doi.org/10.24252/minds.v13i2.63498
Muhammad Ali Fikri
Universitas Ahmad Dahlan, Indonesia
Wakhid Slamet Ciptono
Universitas Gadjah Mada, Indonesia
Muhammad Hamdi
Universitas Ahmad Dahlan, Indonesia
Poppy Laksita Rini
Universitas Ahmad Dahlan, Indonesia

Corresponding Author(s) : Muhammad Ali Fikri

[email protected]

Jurnal Minds: Manajemen Ide dan Inspirasi, Vol. 13 No. 2 (2026): September

Abstract

This study examines the effects of green supply chain management and green dynamic capability on business sustainability through green innovation. It contributes by integrating the resource-based view and dynamic capability theory to explain how green innovation converts organizational resources and capabilities into sustainable outcomes in MSMEs. Using a quantitative design, data were collected from 161 batik MSME owners in Yogyakarta, Indonesia through purposive sampling and analyzed using PLS-SEM. The results show that green supply chain management does not directly affect business sustainability, whereas green dynamic capability has a significant positive effect. Both green supply chain management and green dynamic capability significantly promote green innovation, which subsequently improves business sustainability. Green innovation fully mediates the effect of green supply chain management and partially mediates the effect of green dynamic capability on business sustainability. Managers should strengthen green innovation capabilities to translate environmental practices and adaptive capabilities into sustainable competitive advantage.

Keywords

Green Supply Chain Management Green Dynamic Capability Green Innovation Business Sustainability
Fikri, M. A., Ciptono, W. S., Hamdi, M., & Rini, P. L. (2026). Green Supply Chain Management, Green Dynamic Capability, and Business Sustainability: The Role of Green Innovation. Jurnal Minds: Manajemen Ide Dan Inspirasi, 13(2), 413–426. https://doi.org/10.24252/minds.v13i2.63498
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX
References
  1. Achi, A., Adeola, O., & Achi, F. C. (2022). CSR and green process innovation as antecedents of micro, small, and medium enterprise performance: Moderating role of perceived environmental volatility. Journal of Business Research, 139, 771–781. https://doi.org/10.1016/j.jbusres.2021.10.016
  2. Ahmad, N., Scholz, M., AlDhaen, E., Ullah, Z., & Scholz, P. (2021). Improving firm’s economic and environmental performance through the sustainable and innovative environment: Evidence from an emerging economy. Frontiers in Psychology, 12, Article 651394. https://doi.org/10.3389/fpsyg.2021.651394
  3. Akpan, I. J., Soopramanien, D., & Kwak, D.-H. (2021). Cutting-edge technologies for small business and innovation in the era of the COVID-19 global health pandemic. Journal of Small Business & Entrepreneurship, 33(6), 607–617. https://doi.org/10.1080/08276331.2020.1799294
  4. Alawamleh, M., Mahadin, B., Nimer, L. A., & Marji, D. S. (2023). Ecopreneurship: A systematic review. International Journal of Process Management and Benchmarking, 13(2), 257–281. https://doi.org/10.1504/IJPMB.2023.128485
  5. Ali, W., Wen, J., Hussain, H., Khan, N. A., Younas, M. W., & Jamil, I. (2021). Does green intellectual capital matter for green innovation adoption? Evidence from the manufacturing SMEs of Pakistan. Journal of Intellectual Capital, 22(5), 868–888. https://doi.org/10.1108/JIC-06-2020-0204
  6. Amin, M. A., & Sarker, S. (2023). Jute industry of Bangladesh: Challenges and opportunities [Bachelor’s thesis, Centria University of Applied Sciences]. Theseus. https://urn.fi/URN:NBN:fi:amk-2023121135922
  7. Arzubiaga, U., Kotlar, J., De Massis, A., Maseda, A., & Iturralde, T. (2018). Entrepreneurial orientation and innovation in family SMEs: Unveiling the (actual) impact of the board of directors. Journal of Business Venturing, 33(4), 455–469. https://doi.org/10.1016/j.jbusvent.2018.03.002
  8. Assumpção, J. J., Campos, L. M. S., Vazquez-Brust, D. A., & Carvalho, M. M. (2024). The orchestration of green supply chain management practices to enable performance measurement and evaluation. Production Planning & Control, 35(14), 1706–1725. https://doi.org/10.1080/09537287.2023.2214526
  9. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
  10. Bossle, M. B., de Barcellos, M. D., Vieira, L. M., & Sauvée, L. (2016). The drivers for adoption of eco-innovation. Journal of Cleaner Production, 113, 861–872. https://doi.org/10.1016/j.jclepro.2015.11.033
  11. Burki, U., & Ersoy, P. (2022). Top management pledge, an essential component of sustainable manufacturer-customer relationships. Journal of Sustainable Marketing, 3(2), 98–117. https://doi.org/10.51300/jsm-2022-61
  12. Chang, C. (2016). Environmental sustainability in supply chain management: A review and future direction. Sustainability, 8(12), Article 1277. https://doi.org/10.3390/su8121277
  13. Chaudhary, A., Gustafson, D., & Mathys, A. (2018). Multi-indicator sustainability assessment of global food systems. Nature Communications, 9, Article 848. https://doi.org/10.1038/s41467-018-03308-7
  14. Chen, X., Yi, N., Zhang, L., & Li, D. (2018). Does institutional pressure foster corporate green innovation? Evidence from China’s top 100 companies. Journal of Cleaner Production, 188, 304–311. https://doi.org/10.1016/j.jclepro.2018.03.257
  15. Chen, Y. S. (2011). Green organizational identity: Sources and consequence. Management Decision, 49(3), 384–404. https://doi.org/10.1108/00251741111120761
  16. Chen, Y. S., & Chang, C. H. (2013). The determinants of green product development performance: Green dynamic capabilities, green transformational leadership, and green creativity. Journal of Business Ethics, 116(1), 107–119. https://doi.org/10.1007/s10551-012-1452-x
  17. Chen, Y. S., Lai, S. B., & Wen, C. T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67(4), 331–339. https://doi.org/10.1007/s10551-006-9025-5
  18. Chen, Y. S., Lin, Y. H., Lin, C. Y., & Chang, C. W. (2015). Enhancing green absorptive capacity, green dynamic capacities, and green service innovation to improve firm performance: An analysis of structural equation modeling (SEM). Sustainability, 7(11), 15674–15692. https://doi.org/10.3390/su71115674
  19. Cheng, J., Xu, N. R., Khan, N. U., & Singh, H. S. M. (2025). The impacts of artificial intelligence literacy, green absorptive capacity, and green information system on green innovation. Corporate Social Responsibility and Environmental Management, 32(2), 2375–2389. https://doi.org/10.1002/csr.3017
  20. Dangelico, R. M., & Pujari, D. (2010). Mainstreaming green product innovation: Why and how companies integrate environmental sustainability. Journal of Business Ethics, 95, 471–486. https://doi.org/10.1007/s10551-010-0434-0
  21. Dangelico, R. M., & Vocalelli, D. (2017). “Green marketing”: An analysis of definitions, strategy steps, and tools through a systematic review of the literature. Journal of Cleaner Production, 165, 1263–1279. https://doi.org/10.1016/j.jclepro.2017.07.184
  22. Dzikriansyah, M. A., Masudin, I., Zulfikarijah, F., Jihadi, M., & Jatmiko, R. D. (2023). The role of green supply chain management practices on environmental performance: A case of Indonesian small and medium enterprises. Cleaner Logistics and Supply Chain, 6, Article 100100. https://doi.org/10.1016/j.clscn.2023.100100
  23. Elkington, J. (1998). Cannibals with forks: The triple bottom line of 21st century business. New Society Publishers.
  24. Febriani, R., Knippenberg, L., & Aarts, N. (2023). The making of a national icon: Narratives of batik in Indonesia. Cogent Arts & Humanities, 10(1), Article 2254042. https://doi.org/10.1080/23311983.2023.2254042
  25. García Alcaraz, J. L., Díaz Reza, J. R., Arredondo Soto, K. C., Hernández Escobedo, G., Happonen, A., Puig I Vidal, R., & Jiménez Macías, E. (2022). Effect of green supply chain management practices on environmental performance: Case of Mexican manufacturing companies. Mathematics, 10(11), Article 1877. https://doi.org/10.3390/math10111877
  26. Geng, R., Mansouri, S. A., & Aktas, E. (2017). The relationship between green supply chain management and performance: A meta-analysis of empirical evidences in Asian emerging economies. International Journal of Production Economics, 183, 245–258. https://doi.org/10.1016/j.ijpe.2016.10.008
  27. Ghozali, I. (2021). Partial least squares: Konsep, teknik, dan aplikasi menggunakan program SmartPLS 3.2.9 untuk penelitian empiris (3rd ed.). Badan Penerbit Universitas Diponegoro.
  28. Green, K. W., Jr., Zelbst, P. J., Meacham, J., & Bhadauria, V. S. (2012). Green supply chain management practices: Impact on performance. Supply Chain Management: An International Journal, 17(3), 290–305. https://doi.org/10.1108/13598541211227126
  29. Gully, S. M., Phillips, J. M., Castellano, W. G., Han, K., & Kim, A. (2013). A mediated moderation model of recruiting socially and environmentally responsible job applicants. Personnel Psychology, 66(4), 935–973. https://doi.org/10.1111/peps.12033
  30. Guo, Y., Wang, L., & Chen, Y. (2020). Green entrepreneurial orientation and green innovation: The mediating effect of supply chain learning. SAGE Open, 10(1), Article 2158244019898798. https://doi.org/10.1177/2158244019898798
  31. Habib, M. A., Balasubramanian, S., Shukla, V., Chitakunye, D., & Chanchaichujit, J. (2022). Practices and performance outcomes of green supply chain management initiatives in the garment industry. Management of Environmental Quality: An International Journal, 33(4), 882–912. https://doi.org/10.1108/MEQ-08-2021-0189
  32. Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Castillo Apraiz, J., Cepeda Carrión, G., & Roldán, J. L. (2019). Manual de partial least squares structural equation modeling (PLS-SEM) (2nd ed.). OmniaScience. https://doi.org/10.3926/oss.37
  33. Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). SAGE Publications.
  34. Ismail, I. J. (2023). The influence of green dynamic capabilities on brand sustainability among manufacturing enterprises in Tanzania: Mediation of green technology innovation. Technological Sustainability, 2(4), 388–403. https://doi.org/10.1108/TECHS-03-2023-0016
  35. Jabbour, C. J. C., & Stefanelli, N. O. (2021). Fifteen years of green supply chain research. Revista de Administração da UFSM, 14(1), 202–212. https://doi.org/10.5902/1983465961861
  36. Laosirihongthong, T., Adebanjo, D., & Tan, K. C. (2013). Green supply chain management practices and performance. Industrial Management & Data Systems, 113(8), 1088–1109. https://doi.org/10.1108/IMDS-04-2013-0164
  37. Mardatillah, A., Angraini, L. M., & Yuliani, S. (2024). Enhancing marketing performance in batik Malay industry: Optimization competitive advantage by leveraging augmented reality marketing. Cogent Business & Management, 11(1), Article 2431187. https://doi.org/10.1080/23311975.2024.2431187
  38. Mousavi, S., Bossink, B., & van Vliet, M. (2018). Dynamic capabilities and organizational routines for managing innovation towards sustainability. Journal of Cleaner Production, 203, 224–239. https://doi.org/10.1016/j.jclepro.2018.08.215
  39. Mugoni, E., Kanyepe, J., & Tukuta, M. (2024). Sustainable supply chain management practices (SSCMPS) and environmental performance: A systematic review. Sustainable Technology and Entrepreneurship, 3(1), Article 100050. https://doi.org/10.1016/j.stae.2023.100050
  40. Osei-Frimpong, K., McLean, G., Islam, N., & Otoo, B. A. (2022). What drives me there? The interplay of socio-psychological gratification and consumer values in social media brand engagement. Journal of Business Research, 146, 288–307. https://doi.org/10.1016/j.jbusres.2022.03.057
  41. Paulraj, A. (2011). Understanding the relationships between internal resources and capabilities, sustainable supply management, and organizational sustainability. Journal of Supply Chain Management, 47(1), 19–37. https://doi.org/10.1111/j.1745-493X.2010.03212.x
  42. Qiu, L., Jie, X., Wang, Y., & Zhao, M. (2020). Green product innovation, green dynamic capability, and competitive advantage: Evidence from Chinese manufacturing enterprises. Corporate Social Responsibility and Environmental Management, 27(1), 146–165. https://doi.org/10.1002/csr.1780
  43. Rahman, H. U., Zahid, M., & Al-Faryan, M. A. S. (2023). ESG and firm performance: The rarely explored moderation of sustainability strategy and top management commitment. Journal of Cleaner Production, 404, Article 136859. https://doi.org/10.1016/j.jclepro.2023.136859
  44. Renwick, D. W., Jabbour, C. J., Muller-Camen, M., Redman, T., & Wilkinson, A. (2016). Contemporary developments in green (environmental) HRM scholarship. The International Journal of Human Resource Management, 27(2), 114–128. https://doi.org/10.1080/09585192.2015.1105844
  45. Rodrigo-Alarcón, J., García-Villaverde, P. M., Ruiz-Ortega, M. J., & Parra-Requena, G. (2018). From social capital to entrepreneurial orientation: The mediating role of dynamic capabilities. European Management Journal, 36(2), 195–209. https://doi.org/10.1016/j.emj.2017.02.006
  46. Santini, C. (2017). Ecopreneurship and ecopreneurs: Limits, trends, and characteristics. Sustainability, 9(4), Article 492. https://doi.org/10.3390/su9040492
  47. Saunders, M. N. K., & Bezzina, F. (2015). Reflections on conceptions of research methodology among management academics. European Management Journal, 33(5), 297–304. https://doi.org/10.1016/j.emj.2015.06.002
  48. Saunila, M., Ukko, J., Rantala, T., Nasiri, M., & Rantanen, H. (2020). Preceding operational capacity as antecedents for productivity and innovation performance. Journal of Business Economics, 90(4), 537–561. https://doi.org/10.1007/s11573-019-00963-0
  49. Schaltegger, S., & Wagner, M. (2011). Sustainable entrepreneurship and sustainability innovation: Categories and interactions. Business Strategy and the Environment, 20(4), 222–237. https://doi.org/10.1002/bse.682
  50. Sezen, B., & Çankaya, S. Y. (2018). Green supply chain management theory and practices. In M. Khosrow-Pour (Ed.), Operations and service management: Concepts, methodologies, tools, and applications (pp. 118–141). IGI Global. https://doi.org/10.4018/978-1-5225-2036-8.ch005
  51. Stojanoska, S. (2016). Green supply chain management and environmental sustainability: Challenges and opportunities. Journal of Sustainable Development, 9(4), 230–242. https://doi.org/10.5539/jsd.v9n4p230
  52. Suroyo, Soedjiwo, N. A. F., Entas, D., & Putra, B. M. (2025). Javanese batik in Yogyakarta goes viral: Social media’s impact on the commercialization and global reach of local textile and cultural identity of Javanese. In L. Khan (Ed.), Oxford intersections: Social media in society and culture. Oxford University Press. https://doi.org/10.1093/9780198945253.003.0039
  53. Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Planning, 51(1), 40–49. https://doi.org/10.1016/j.lrp.2017.06.007
  54. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.
  55. Ullah, S., Lin, B., & Zhu, R. (2025). Developing a new sustainable policy perspective for Pakistan: An intricate nexus between green innovation, financial structure, and ecological footprint. Energy, 316, Article 134496. https://doi.org/10.1016/j.energy.2025.134496
  56. Zhu, Q., Sarkis, J., & Lai, K. H. (2008). Confirmation of a measurement model for green supply chain management practices implementation. International Journal of Production Economics, 111(2), 261–273. https://doi.org/10.1016/j.ijpe.2006.11.029
  57. Zhu, Q., Sarkis, J., & Lai, K. H. (2013). Institutional-based antecedents and performance outcomes of internal and external green supply chain management practices. Journal of Purchasing and Supply Management, 19(2), 106–117. https://doi.org/10.1016/j.pursup.2012.12.001
Read More

Author Biographies

Muhammad Ali Fikri, Universitas Ahmad Dahlan

Management Department

Wakhid Slamet Ciptono, Universitas Gadjah Mada

Management Department

Muhammad Hamdi, Universitas Ahmad Dahlan

Management Department

Poppy Laksita Rini, Universitas Ahmad Dahlan

Management Department

Download
PDF
Statistic
Read Counter : 0 Download : 0

Most read articles by the same author(s)

Similar Articles

<< < > >> 

You may also start an advanced similarity search for this article.