Towards Green Growth Capability Development: A Knowledge‐Based Perspective

ABSTRACT Green growth, which balances a firm's growth aspirations with environmental stewardship, is gaining traction in the literature. However, the notion of green growth capability (GGC) as a foundation for firm‐level green growth strategy remains underexplored. Multifaceted and multi‐skills nature of organisational capabilities is brought into focus to advance a knowledge‐based view and to develop a new GGC scale. A robust scale development process was employed, including expert insights and a scoping review to establish content and face validity. A primary survey of 280 firms in the UK Midlands green market niches was undertaken. Exploratory and confirmatory factor analysis demonstrated construct validity and reliability revealing three main skill groupings necessary for GGC development: environmental impact minimisation, business development and green growth stewardship skills . A two‐step structural equation modelling (SEM) approach confirmed the scale's nomological and predictive validity. This study advocates for a GGC development approach to the design and implementation of policy mixes, which support capacity building for sustainable regional development.