GREEN SYNERGY: UNLEASHING CREATIVITY, INNOVATION, DYNAMIC CAPABILITY, AND PERFORMANCE OF SMALL AND MEDIUM FIRMS

The critical role of green creativity in small firms’ financial and environmental performance has attracted scholarly interest in recent times. Prior studies have reported inconsistent findings on this relationship, prompting the need for further investigations. This study investigates the effect of green creativity on performance through green innovation at different levels of green dynamic capability. This study collected data on 246 small firms in a developing nation, Ghana. Adopting structural equation modelling (SEM) in LISREL 8.8 to test our hypothesized relationships, this study reveals that green creativity significantly affects both financial and environmental performance. We further find that green innovation does not significantly mediate the relationship between green creativity and performance (environmental and financial). Additionally, this study reports that at high levels of green dynamic capability, the positive relationship between green creativity and environmental performance through green innovation is strengthened.