Exploring the relationship between TMT behavioral integration and environmental performance in Pakistani SMEs: a study of green innovation, green dynamic capabilities, and green finance

This study is based on different theories i.e. upper echelons, resource-based view, and ability-motivation-opportunity to investigate the relationship between behavioral integration of top management teams (TMTBI) and environmental performance (EP). Further, this investigation explores the mediating function of TMTs’ green dynamic capabilities (GDC) and green innovation (GI), alongside the moderating influence of green finance (GF) on this connection. A survey was conducted involving 410 respondents from small and medium-sized enterprises (SMEs) within the manufacturing sector to gather data through a convenience sampling technique. Structural equation modeling (SEM) was employed to assess the proposed hypotheses. The findings indicate that TMTBI positively influences EP and the GDC mediates the relationship between behavioral integration (BI) and GI. Additionally, GI also mediates the relation between GDC and EP. The result reveals that GDC and GI both improve the impacts of TMTBI on the EP of SMEs. GF also strengthens the relationship between TMTBI on EP. Findings have some important theoretical and practical implications for stakeholders of SMEs. The findings of this study indicate that a top team that is both environmentally aware and skilled will leverage green resources to drive innovation and improve EP. This study builds upon previous findings by demonstrating the crucial impact of TMTBI and their GDC in predicting GI within organizations and the use of green resources, including GF. This study contributes to the literature on TMTBI and the use of green resources on the prediction of EP within organizations.