Exploring Corporate Social Responsibility in the Context of Green Dynamic Capabilities, Responsible Innovation, and Environmental Strategy to Attain Business Excellence

ABSTRACT To achieve and sustain sustainability objectives, businesses must strike a balance between their environmental initiatives and financial goals. Grounded in stakeholder theory, the natural resource‐based view, and dynamic capabilities theory, this study examines four pivotal relationships: the influence of corporate social responsibility (CSR) on firm performance, along with the mediating roles of green dynamic capabilities (GDCs), responsible innovation, and environmental strategy within this context. Time‐lagged data from 310 randomly selected manufacturing firms were analyzed using structural equation modeling. The results indicate that CSR does not exert a significant direct impact on firm performance, whether positive or negative. Nevertheless, the mediating roles of GDCs, responsible innovation, and environmental strategy are significant in the relationship between CSR and firm performance. This research provides novel insights into the prevailing literature and offers pragmatic recommendations for managers seeking to effectively implement CSR strategies.