Achieving Supply Chain Sustainability Through Green Innovation: A Dynamic Capabilities-Based Approach in the Logistics Sector

This study examines the effect of internal dynamic capabilities i.e., digital leadership, environmental awareness, and organizational learning, on sustainable supply chain performance as studied in the logistics sector. It builds on the Dynamic Capabilities Theory by combining notions of green innovation and sustainability and fills the growing gap in the existing literature. Despite the fact that these domains have been extensively studied independently, there has been limited research examining how internal capabilities contribute to green supply chain innovation (GSCI) that in turn results in sustainability outcomes, especially in the case of emerging markets. Seven hypotheses were tested using Partial Least Squares Structural Equation Modeling (PLS-SEM) analysis of data collected from 312 logistics and supply chain professionals in Jordan. This study shows that each of the three capabilities has a major effect on GSCI and therefore sustainable performance. Linking the most influential predictor of sustainability outcome to sustainable supply chain performance, as indicated by the strongest effect (β = 0.825, p < 0.001) between GSCI and sustainable supply chain performance, and followed by significant coefficients between the sustainable information processing (β = 0.261, p < 0.01), and information capabilities (β = 0.297, p < 0.001), indicates that the theory is more suited to GSCI. In particular, digital leadership had the largest impact on the green innovation (β = 0.481, p < 0.001), indicating that the role of digitally driven leadership is to facilitate eco-innovation. In addition, this intermediate factor, GSCI, serves as a variable that mediates relationships between the capabilities and the sustainability outcomes. As the results here suggest, leveraging internal capabilities is a very tangible channel for green innovation that has important ramifications for practitioners and policymakers facing resource constraints.