Dynamic Capabilities and Green Innovation in Oil and Gas Sector: The Mediating Effects of Strategic Agility

This study examines the connection between strategic agility, dynamic capabilities, and green innovation in Indonesia’s oil and gas industry. In light of the industry’s need to shift toward more environmentally friendly energy sources, it is essential to comprehend how companies can cultivate and use dynamic capabilities to drive green innovation. A total of 105 individuals from the Indonesian oil and gas sector were included in the data collection process. The findings suggest that both strategic agility and dynamic capabilities have a direct and beneficial influence on green innovation. Strategic agility serves as a partial mediator in the favorable correlation between dynamic skills and green innovation. This implies that while having the ability to adapt and change is crucial for promoting environmentally friendly innovation, its effectiveness is heightened when companies also have the capacity for quick and strategic decision-making. This study enhances our comprehension of how oil and gas corporations may adapt effectively to the energy transition by cultivating flexible abilities and strategic adaptability to promote environmentally friendly innovation. The research employed a cross-sectional design utilizing Partial Least Squares Structural Equation Modeling (PLS-SEM).