Corporate social responsibility and green dynamic capabilities as drivers of environmental performance in volatile contexts

The relevance of corporate social responsibility (CSR) to business operations is widely acknowledged; however, the mechanisms and circumstances under which CSR enhances environmental performance in small enterprises—especially in developing economies—remain insufficiently understood. Grounded in the perspectives of dynamic capabilities and the natural resource-based view, this research investigates how CSR influences environmental performance through the development of green dynamic capabilities. Moreover, it considers contextual volatility as a contextual factor that moderates the relationship between green dynamic capabilities and environmental performance. Empirical evidence was obtained via survey data collected from 103 greenhouse managers in Iran. Findings from structural equation modeling demonstrate a direct positive link between CSR and environmental performance. In addition, CSR promotes the development of green dynamic capabilities, which subsequently foster improved environmental outcomes. Nevertheless, when contextual volatility is high, the beneficial effect of green dynamic capabilities on environmental performance diminishes. These results underscore CSR’s strategic value for small firms in resource-limited contexts. For policymakers, the study suggests providing incentives to encourage CSR practices, while managers are advised to strengthen green dynamic capabilities to maintain environmental progress in volatile markets.