Examining Organisational Resources and Institutional Pressures on Proactive Environmental Strategy and Eco‐Innovation Practices: Moderating Role of Green Agility

ABSTRACT Despite growing scholarly attention on eco‐innovation as a strategic response to environmental sustainability challenges, limited understanding persists regarding how internal resources and external institutional pressures interact to shape firms' eco‐innovation practices. Anchored in the resource‐based view (RBV), institutional theory, and the dynamic capabilities perspective, this study investigates how organisational resources and institutional pressures influence eco‐innovation through a proactive environmental strategy, and how green agility strengthens this relationship. Using data from 187 technologically innovative firms collected through a two‐wave time‐lagged survey, Partial Least Squares (PLS) path modelling and Artificial Neural Networks (ANN) were employed to test the proposed model and validate its predictive performance. Results reveal that market demand, environmental capability, regulatory pressure and managerial concern significantly drive proactive environmental strategy, which in turn enhances eco‐innovation practices. Both PLS and ANN analyses converge on market demand as the most influential determinant. Moreover, green agility strengthens the effect of proactive environmental strategy on eco‐innovation, highlighting its function as an adaptive dynamic capability in rapidly changing environments. Cross‐validated predictive ability tests (CVPAT) further confirm the model's predictive robustness. This study advances theoretical understanding by integrating RBV, institutional and dynamic capabilities perspectives and offers practical insights for managers seeking to leverage strategic resources and agility to accelerate eco‐innovation.