Green Innovation, Corporate Sustainability and Firm Performance: The Mediating Role of Organizational Openness to Change

Abstract

The purpose of this paper is to analyze the impact of green innovation and corporate sustainability on firm performance based on the literature review, and to investigate the mediating role of openness to organizational change with respect to these relationships. The research utilized data from 399 industrial and service enterprises located in the city of Baku to examine whether firms' green innovation and corporate sustainability behaviour results in greater levels of competence and how receptive an organization is to change plays a mediating role between these behaviours and firm performance. The data used in this study were collected during the 2024 calendar year from industrial and service firms operating in Baku, Azerbaijan. Results demonstrate that green innovation, along with corporate sustainability approaches, have a positive effect on firm performance; however, the influence of openness to organizational change as a mediator in these relationships is significantly less pronounced. Regarding the mediation of openness to organizational change, green innovation results in a low level of partial mediation of its effect on performance, while corporate sustainability has a fully mediated effect on performance. Hence, the study represents an added contribution to the literature concerning how sustainability-oriented practices and an openness towards organizational change provide a vehicle for creating value with respect to improving firm performance.