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European Journal
Greening the future: analyzing of Innovation
Management
green entrepreneurial orientation,
green knowledge management and
digital transformation for
sustainable innovation and Received 19 February 2024
Revised 24 April 2024

circular economy Accepted 27 April 2024

Hussam Al Halbusi
Management Department, Ahmed Bin Mohammed Military College, Doha, Qatar
Simona Popa
Department of Financial Economics and Accounting, University of Murcia,
Murcia, Spain
Safiya Mukhtar Alshibani
College of Business Administration, Princess Nourah Bint AbdulRahman University,
Riyadh, Saudi Arabia, and
Pedro Soto-Acosta
Department of Management and Finance, University of Murcia, Murcia, Spain

Abstract
Purpose – Green innovation, digitization and sustainability have attracted considerable attention in recent
years due to their transformative potential in organizations. This study, grounded in the resource-based view,
explores the intricate relationship among green entrepreneurial orientations, sustainability-oriented
innovation, and the circular economy, employing green knowledge management as a pivotal mechanism.
Design/methodology/approach – The proposed model and hypotheses were tested using Partial Least
Squares (PLS) structural equation modeling (SEM) with a sample of 274 valid questionnaires collected from
manufacturing firms in Saudi Arabia.
Findings – Results unveil positive relationships between green entrepreneurial orientations and
sustainability-oriented innovation, as well as the circular economy, along with a positive mediation of green
knowledge management in these relationships. In addition, these relationships exhibit heightened strength
with increased levels of digital transformation.
Originality/value – The contributions of this research extend to both theoretical and practical realms,
offering valuable insights for startups and traditional businesses as they explore the landscape of green
innovation and digitization.
Keywords Entrepreneurship, Knowledge management, Digital transformation, Innovation,
Circular economy, Sustainability
Paper type Research paper

1. Introduction
Climate change poses a challenging threat to the delicate balance of natural resources,
exerting unprecedented pressures on ecosystems globally (Dwivedi et al., 2022). The
European Journal of Innovation
The authors acknowledge the support of Princess Nourah Bint Abdulrahman University Researchers Management
Supporting Project number (PNURSP2023R395), Princess Nourah Bint Abdulrahman University, © Emerald Publishing Limited
1460-1060
Riyadh, Saudi Arabia. DOI 10.1108/EJIM-02-2024-0169
EJIM increasing frequency and intensity of extreme weather events, along with the upward
trajectory of temperatures and changing patterns, have profound implications for
biodiversity, water availability, and productivity (Mperejekumana et al., 2024). In this
context, the necessity to embrace sustainable practices becomes imperative in mitigating the
adverse impacts of climate change on natural resources (Opoku-Mensah et al., 2024).
Sustainability, rooted in fundamental principles of responsible resource utilization,
preservation, and regeneration, emerges as a potent strategy to confront these challenges
(Aftab et al., 2023). By integrating sustainable practices into resource management,
businesses can enhance resilience and minimize vulnerability to disruptions induced by
climate change. The promotion of sustainable and efficient management, coupled with
conservation initiatives, contributes significantly to the preservation of vital ecosystems and
fosters long-term environmental stability (Broccardo et al., 2023; Yong et al., 2020).
In the face of global challenges posed by climate change and resource reduction,
sustainability-oriented innovation emerges as a crucial driver for transformative change in
contemporary business settings (Adams et al., 2016; Popa et al., 2017). This highlights the
dynamic intersection of sustainability and innovation indicating how businesses can harness
creative and technological capabilities to foster environmental responsibility and resilience
(Bamel et al., 2022; Broccardo et al., 2023). Nevertheless, sustainability-oriented innovation
goes beyond traditional notions of product development, emphasizing a holistic approach
that considers the entire life cycle, from raw material extraction to end-of-life disposal,
thereby minimizing environmental impacts (Ortiz-Avram et al., 2023). Thus, sustainability-
oriented innovation, linking environmental responsibility and creative advancement,
characterizes a strategic approach that seeks to harmonize business practices with
environmental essentials. This transformative paradigm emphasizes the development of
products, processes, and systems that meet present needs while also protecting the well-being
of future generations. By integrating sustainability principles into innovation processes,
businesses can drive positive economic, social, and environmental outcomes, paving the way
for a more resilient and responsible global society (Ghobakhloo et al., 2023; Popa et al., 2022).
The perspective of the circular economy has gained importance as a transformative
framework that reimagines traditional linear production and consumption models, offering a
holistic approach to resource management and environmental sustainability (Fratini et al.,
2019). Rooted in the principles of reducing, reusing, and recycling, the circular economy aims
to distinguish economic growth from resource diminution by fostering closed-loop systems
(Abbasi et al., 2024). Hence, it is a reframing approach to resource management and production
that emphasizes sustainability and aims to minimize waste by keeping materials and products
in use for as long as possible. Unlike the traditional linear economy, which follows a “take,
make, dispose” model, the circular economy promotes a closed-loop system where resources
are reused, renewed, remanufactured, and recycled (Zhang et al., 2024). This approach is
crucial for both environmental conservation and economic growth. By extending the lifecycle
of products, reducing waste, and optimizing resource use, the circular economy mitigates
environmental degradation, decreases reliance on determinate resources, and curtails
greenhouse gas emissions (Dur
an-Romero et al., 2020). Moreover, it fosters innovation, job
creation, and resilient economic systems. Embracing the circular economy contributes to
environmental sustainability and also catalyzes long-term economic prosperity and resilience
in the face of global challenges (Del Giudice et al., 2021; Provin et al., 2021; Taneja et al., 2023).
In the pursuit of a more sustainability-oriented innovation and circular economy,
several gaps persist, necessitating comprehensive research and strategic interventions.
Despite a growing body of studies, there is a notable lack of studies that integrate green
entrepreneurial orientation as a direct influencer towards sustainability-oriented innovation
and circular economy (e.g. Makhloufi, 2023). In addition, this study requires a critical
mechanism that explains the relationship between green entrepreneurial orientation and
sustainability-oriented innovation and circular economy. Hence, this study introduces green European Journal
knowledge management as an indirect influencer within the context of sustainable business of Innovation
practices. Importantly, this study also introduces digital transformation as a moderation of Management
the relationship between green entrepreneurial orientation and sustainability-oriented
innovation and circular economy as well as between green entrepreneurial orientation, green
knowledge management and sustainability-oriented innovation and circular economy.
This study, therefore, makes a vital contribution to the pursuit of sustainability-oriented
innovation and the circular economy by addressing significant gaps in the existing research
literature. While the importance of green entrepreneurial orientation in promoting
sustainable practices is recognized, there is a scarcity of studies integrating green
entrepreneurial orientation as a direct influencer specifically targeting sustainability-
oriented innovation and the circular economy. This research establishes green
entrepreneurial orientation’s direct impact and introduces a critical mechanism by
incorporating green knowledge management as an indirect influencer, explaining the
intricate relationship between green entrepreneurial orientation and sustainable business
practices. Moreover, the study innovatively considers digital transformation as a moderating
factor, shedding light on its role in influencing the connection between green entrepreneurial
orientation, green knowledge management, and the realization of sustainability-oriented
innovation and circular economy goals. This approach to the problem contributes valuable
insights for businesses seeking to navigate the complexities of sustainable innovation and
the trend of the circular economy.

2. Theoretical framework and hypotheses

2.1 Green entrepreneurial orientation and sustainability-oriented innovation
Green entrepreneurial orientation refers to the strategic orientation of a business toward
environmentally sustainable practices and eco-friendly innovation (Shehzad et al., 2023). It
encompasses a mindset and set of behaviors that prioritize environmental responsibility and
social consciousness within entrepreneurial activities. A business with a strong green
entrepreneurial orientation is proactive in identifying and capitalizing on opportunities that
align with ecological sustainability (Allal-Ch
erif et al., 2023). This orientation involves a
commitment to reducing environmental impact, promoting resource efficiency, and
integrating eco-friendly practices across various facets of business operations, including
product development, supply chain management, and marketing (Ameer and Khan, 2023). In
essence, green entrepreneurial orientation signifies a conscious effort to balance economic
objectives with environmental stewardship, reflecting a commitment to sustainable business
practices and a consideration of the long-term ecological implications of entrepreneurial
activities (Algarni et al., 2022).
Thus, the relationship between green entrepreneurial orientation and sustainability-
oriented innovation has garnered significant attention in the literature, reflecting the
increasing importance of environmentally responsible business practices. Studies have
highlighted the pivotal role of green entrepreneurial orientation as a driver for sustainable
innovation within organizations. For instance, Shepherd and Patzelt (2011) emphasized that a
strong green entrepreneurial orientation facilitates the integration of environmental
considerations into entrepreneurial processes, fostering a proactive approach toward
sustainable practices. Similarly, other studies have highlighted the positive influence of green
entrepreneurial orientation on the identification and exploitation of opportunities for
sustainability-oriented innovations (Frare and Beuren, 2022). These connections are crucial
for firms seeking both to enhance their environmental performance and remain competitive.
However, the literature also acknowledges potential challenges and complexities associated
with integrating green principles into entrepreneurial activities. Some scholars have pointed
EJIM to the need for a shading understanding, emphasizing that successful green entrepreneurship
involves navigating potential tensions between economic objectives and environmental goals
(H€allerstrand et al., 2023; Makhloufi, 2023). Despite these challenges, the dominant consensus
in the previous literature suggests a positive and cooperative link between green
entrepreneurial orientation and sustainability-oriented innovation, underlining the
strategic imperative for businesses to adopt environmentally conscious practices within
their entrepreneurial endeavors to remain competitive and avoid being disrupted. Therefore,
the following hypothesis is proposed:
H1. There is a positive relationship between green entrepreneurial orientation and
sustainability-oriented innovation.

2.2 Green entrepreneurial orientation and circular economy

The integration of green entrepreneurial orientation and the circular economy is imperative in
fostering a sustainable and resilient business landscape (Mondal et al., 2023a). Green
entrepreneurial orientation underlines the proactive environmental commitment of
entrepreneurs, emphasizing the incorporation of eco-friendly practices and sustainable
strategies (Takacs et al., 2022; Shaik et al., 2023). When coupled with the circular economy,
businesses operating with a strong green entrepreneurial orientation minimize their
environmental footprint and actively contribute to the creation of a regenerative and
resource-efficient economy. This incorporation is crucial as it aligns entrepreneurial efforts
with global sustainability goals, driving innovation in product design, supply chain
management, and waste reduction (Gallego et al., 2010; Khan et al., 2022). By adopting circular
principles, businesses enhance resource productivity, reduce waste generation, and promote
a more holistic approach to consumption. Ultimately, the interaction between green
entrepreneurial orientation and the circular economy is essential for building a business
ecosystem that mitigates environmental impact and thrives in a world increasingly focused
on sustainable development (Kennedy and Linnenluecke, 2022).
In particular, the linking of green entrepreneurial orientation and the circular economy
signifies a promising avenue for fostering sustainable business practices. Green
entrepreneurial orientation, characterized by a proactive commitment to environmental
responsibility, aligns with the principles of the circular economy, emphasizing resource
efficiency and waste reduction. Recent literature, such as the work by Mondal et al. (2023b),
suggests a positive association between green entrepreneurial orientation and the adoption of
circular economy practices, mainly in the context of institutional pressures. However, it is
essential to note that challenges persist in the practical implementation of circular models.
Issues such as resource constraints, global supply chain complexities, and the need for
supportive policies and regulations pose significant hurdles for businesses aiming to
transition effectively (Wang et al., 2023a). Moreover, market dynamics and consumer
awareness play pivotal roles in determining the success of circular initiatives, highlighting the
importance of education and advocacy in achieving widespread acceptance. A comprehensive
and refinement approach, considering these attentions, is essential for realizing the full
potential of the interaction between green entrepreneurial orientation and the circular
economy (Mondal et al., 2023a). Consequently, the subsequent hypothesis is formulated:
H2. There is a positive relationship between green entrepreneurial orientation and the
circular economy.

2.3 The role of green knowledge management

Green knowledge management plays a pivotal role in shaping the involved link amid green
entrepreneurial orientation, sustainability-oriented innovation, and the circular economy.
At its core, green knowledge management incorporates the organized acquisition, creation, European Journal
dissemination, and utilization of environmentally conscious knowledge within a structural of Innovation
context (Abbas and Khan, 2023; Papa et al., 2020). As businesses increasingly acknowledge Management
the imperative to integrate ecological considerations into their operations, green knowledge
management emerges as a key mechanism for harnessing and leveraging green knowledge.
This requires fostering a culture of sustainability, encouraging cross-functional
collaboration, and facilitating the seamless flow of information related to environmentally
friendly practices (Al Halbusi et al., 2023b; Broccardo et al., 2023). Green knowledge
management acts as the essential factor that enables businesses to develop a heightened
environmental consciousness and encourages a dynamic environment where the principles of
green entrepreneurial orientation can thrive (Abdelfattah et al., 2023).
The complex relationship between green entrepreneurial orientation and green
knowledge management sets the stage for the emergence of sustainability-oriented
innovation, representing a strategic approach wherein businesses leverage green
knowledge to drive the development of novel, sustainable products, processes, and
services. Green knowledge management acts as the channel through which the insights
and lessons acquired from environmental experiences are transformed into innovative
solutions addressing ecological challenges (Audretsch et al., 2023). By fostering a culture of
continuous learning and knowledge sharing, green knowledge management empowers
businesses to direct the complex landscape of sustainable innovation, thereby facilitating the
integration of eco-friendly practices into their products and services (Sahoo et al., 2023).
Collaborative cooperation among green entrepreneurial orientation, green knowledge
management, and sustainability-oriented innovation generally enables businesses to adapt
to evolving environmental dynamics, positioning them as innovators in the pursuit of
sustainable development (Abbas and Khan, 2023).
In the context of the circular economy, green knowledge management emerges as a crucial
driver in the transition towards a reformative and curative economic model. The circular
economy emphasizes waste reduction and the promotion of resource efficiency by designing
products with a development approach, where materials are reused, recycled, or repurposed
(Shehzad et al., 2023). Green knowledge management plays a pivotal role in facilitating the
dissemination of knowledge related to circular practices and principles, ensuring that
businesses are well-equipped to embrace the transformative shift towards circularity (Al
Halbusi et al., 2023b). Through the knowledge-sharing mechanisms embedded in green
knowledge management, firms can analytically integrate circular economy principles into
their business models, supply chains, and production processes, thereby contributing to the
creation of a more sustainable and resilient economic ecosystem (Polas et al., 2023).
In summary, the complex network of relationships among green entrepreneurial orientation,
green knowledge management, sustainability-oriented innovation, and the circular economy
reveals an inclusive framework for fostering environmental consciousness within business
landscapes (Abbas and Sa gsan, 2019). Based upon that, the following hypotheses are
suggested:
H3. Green knowledge management mediates the relationship between green
entrepreneurial orientation and both sustainability-oriented innovation and the
circular economy.

2.4 The moderating role of digital transformation

Digital transformation, the strategic use of digital technologies to redefine and enhance
business processes, functions, and customer experiences, serves as a powerful augmenting
force in the elaborate relationship between green entrepreneurial orientation, green
knowledge management, sustainability-oriented innovation, and the circular economy
EJIM (Chen et al., 2024). At its essence, digital transformation acts as a substance, amplifying the
capabilities of businesses to navigate the complex landscape of environmental sustainability
by integrating cutting-edge technologies and data-driven strategies into their operations
(Saarikko et al., 2020; Shaik et al., 2023; Soto-Acosta, 2020, 2024). As businesses increasingly
recognize the urgency of addressing environmental concerns, the interaction between digital
transformation and green entrepreneurial orientation becomes evident. Digital technologies
provide the tools and platforms necessary for businesses to analyze, interpret, and respond to
environmental challenges with agility and precision, enabling them to embed eco-centric
practices into their entrepreneurial endeavors (Papa et al., 2018). The incorporation of digital
capabilities and green entrepreneurial orientation facilitated by the digitization of processes
empowers businesses to make informed, sustainable decisions, fostering a culture of
environmental consciousness at the core of entrepreneurial activities (Holzmann and Gregori,
2023; Trigo et al., 2010).
Sustainability-oriented innovation experiences a significant boost through the integration
of digital transformation into business contexts. Digital technologies such as artificial
intelligence, the Internet of Things (IoT), and big data analytics enable businesses to identify,
analyze, and implement sustainable innovations at a unique scale and speed (B€ahr and
Fliaster, 2023; Shaik et al., 2023; Soto-Acosta, 2020, 2024). These technologies facilitate the
collection and interpretation of vast amounts of environmental data, empowering businesses
to identify opportunities for sustainable innovation and optimize their processes in real-time.
Digital transformation, as a key driver of Sustainability-oriented innovation, accelerates the
development of eco-friendly products and services by streamlining research and
development processes, fostering collaboration, and enhancing the efficiency of innovation
channels (Wang et al., 2023c). The marriage of digital transformation and sustainability-
oriented innovation ensures that businesses are approachable to environmental challenges
and are at the forefront of driving positive environmental change through technological
advancement (Avelar et al., 2024). Regarding the circular economy gains drive and feasibility
through the transformative influence of digital transformation. Digital technologies play a
pivotal role in optimizing resource management, enhancing supply chain visibility, and
facilitating the seamless integration of circular principles into organizational practices (Wang
et al., 2023b). IoT devices enable real-time tracking of resources and products throughout
their lifecycle, facilitating efficient recycling and repurposing. Blockchain technology, a
digital ledger system, can enhance transparency and traceability within supply chains,
ensuring the authenticity and sustainability of materials (Feroz et al., 2023; Soto-Acosta,
2020). Digital platforms also contribute to the sharing and circularity of resources through
mechanisms such as online marketplaces for reused or repurposed goods. In essence, digital
transformation acts as a technological backbone for the circular economy, enabling
businesses to transition towards a more regenerative and restorative model by leveraging
data-driven insights and smart technologies (Li et al., 2023).
In the realm of green knowledge management, digital transformation serves as a
transformative enabler, revolutionizing the acquisition, dissemination, and utilization of
green knowledge (Sahoo et al., 2023). The digitization of knowledge repositories, collaborative
platforms, and data analytics within green knowledge management frameworks enhances
the accessibility and efficiency of green information, facilitating seamless knowledge flow
across organizational boundaries (Shehzad et al., 2024; Colomo-Palacios et al., 2011; Soto-
Acosta et al., 2010). By leveraging digital tools, organizations can capture real-time insights
into environmentally sustainable practices, ensuring that the latest green knowledge is
readily available to inform decision-making processes. Furthermore, digital transformation
improves the collaborative aspects of green knowledge management, promoting cross-
functional engagement and knowledge-sharing on digital platforms (Javeed and Akram,
2024), thereby fostering a dynamic ecosystem where green insights are preserved and
actively contribute to the development of innovative sustainable solutions (Sahoo, 2024). European Journal
Thus, in line with these arguments we posit the following hypotheses: of Innovation
Management
H4a. Digital transformation moderates the relationship between green entrepreneurial
orientation and sustainability-oriented innovation and the circular economy, such
that these relationships are stronger when digital transformation is high.
H4b. Digital transformation moderates the relationship between green entrepreneurial
orientation and green knowledge management, strengthening this relationship
when digital transformation is high.
H4c. Digital transformation moderates the relationship between green knowledge
management and sustainability-oriented innovation and the circular economy, such
that these relationships are stronger when digital transformation is high.
The set of relationships is illustrated in Figure 1.

3. Methodology
3.1 Data collection and sample
The data was gathered within the Kingdom of Saudi Arabia, recognized as one of the globe’s
major economies. Nevertheless, carbon emissions are most prevalent in Saudi Arabia’s
manufacturing sector. The Saudi government places significant emphasis on environmental
concerns and has enacted a set of laws and regulations aimed at minimizing environmental
impact. Furthermore, there is a commitment to sustainable development, with the
government encouraging businesses to incorporate sustainable practices into their
operations to foster high-quality economic growth. This approach aligns with the
overarching Saudi Vision 2030.
Before sending the ultimate survey, we precisely crafted a questionnaire based on insights
from prior studies to enhance comprehension. We sought input from professors and doctoral
students in pertinent fields for refinement. Following a pilot test involving 20 participants,
comprising senior and middle managers from 10 different firms, we further enhanced the
final survey. Subsequently, a telephone inquiry was undertaken as a preliminary step before
the formal survey was initiated.
Thus, we contact the firms via phone and email to get their permission to participate.
To improve our response rate, we also sent an email to each company, including a survey
invitation letter explaining the background and purpose of our research. In particular, the
data were collected from firms in the manufacturing sector. Our survey was distributed to

Figure 1.
Research model
EJIM each firm and was addressed to senior managers and middle managers, such as purchasing
managers, marketing managers, and financial managers since they have a good
understanding of the entire organization and can provide appropriate key information
about the knowledge process and stakeholder management. The questionnaire is issued from
August 2023 to January 2024. We received 300 results. Twenty-six incomplete samples were
deleted, and 274 firms were used for our testing.

3.2 Measures
Regarding the measurement of variables, green entrepreneurial orientation was assessed
using seven items adapted from Zhang et al. (2023). Green knowledge management was
measured across various dimensions, including knowledge acquisition (5 items), knowledge
storage (5 items), knowledge sharing (6 items), knowledge application (5 items), and
knowledge creation (5 items), all adapted from Yu et al. (2022). Digital transformation was
evaluated through two dimensions: digital strategy (3 items) and digital capability (4 items),
as suggested by Khin and Ho (2018) and Proksch et al. (2021). Sustainability-oriented
innovation was measured through several indicators, such as capability (4 items), evaluation
(6 items), products and services (5 items), operations (4 items), strategy (4 items), partnerships
(4 items), economic (3 items), social (4 items), and demand (4 items), all drawn from Baxter and
Chipulu (2023). The assessment of the circular economy, consisting of 10 items, was adapted
from Zeng et al. (2017).
When evaluating latent constructs, the choice between reflective and formative indicators
holds significant importance (Sarstedt et al., 2019). Reflective measures are suitable for
indicators that are highly correlated and interchangeable, linked to a specific latent construct.
In contrast, formative measures involve less correlated, interchangeable indicators, rendering
traditional reliability and validity criteria inappropriate (Sarstedt et al., 2019). In our study, we
incorporated both reflective and formative variables, encompassing first-order constructs
representing key aspects of the target and second-order constructs. In the case of Reflective-
Formative, Type II, the choice of formative constructs is crucial, as neglecting dimensions
could lead to a shift in the conceptual domain (e.g. Sarstedt et al., 2019). All items in the second
part were anchored on a five-point Likert scale ranging from Strongly Disagree (1) to Strongly
Agree (5), as shown in Table 1.

4. Data analysis and results

To evaluate the hypotheses in this study, we utilized the Partial Least Squares (PLS)
Structural Equation Modeling (SEM) technique (Ringle et al., 2015). This advanced and
rigorous analytical approach is well-suited for intricate causal analyses involving both first-
and second-order constructs, without necessitating strict assumptions about the underlying
components (Hair et al., 2017). The PLS analysis involved the creation of 5,000 subsamples for

Variables VIF

Green entrepreneurial orientation 2.11

Green knowledge management 1.10
Table 1. Digital transformation 1.13
Common method Sustainability-oriented innovation 1.55
variance assessment Circular economy 2.41
via full collinearity Note(s): VIF 5 Variance Inflation Factor
estimate criteria Source(s): Authors own creation
generating bootstrap t-statistics with (n-1) degrees of freedom to assess the statistical European Journal
significance of the path coefficients, where n represents the number of subsamples. of Innovation
Management
4.1 Nonresponse and common method biases
Given that all variables, both independent and dependent, were obtained through the same
survey instrument, the potential for nonresponse bias (NRB) and common method bias (CMB)
arises. To address these concerns, we employed a dual-faceted approach involving
procedural and statistical methods, as recommended by Podsakoff et al. (2003, 2012). In
the procedural approach, we incorporated multiple measuring scales into the survey
instrument and explicitly communicated to participants that their responses were neither
right nor wrong, emphasizing the importance of anonymity.
To address potential statistical biases, we employed three distinct approaches. Firstly, we
conducted a bias test to scrutinize any differences in characteristics between participating
and non-participating firms. The results indicated no statistically significant variations in
fundamental features such as operational tenure, employee count, and asset size among the
firms, rendering the presence of non-response bias insignificant (Armstrong and Overton,
1977). Secondly, we applied Harman’s single-factor analysis, which revealed no dominant
factor. The first factor explained only 25% of the total variance, falling below the critical
threshold of 50%. Additionally, seven factors with eigenvalues above 1 collectively
accounted for 68% of the total variance. Thirdly, we conducted a comprehensive collinearity
test using VIFs, following the recommendations of Kock (2015). This analysis allowed us to
assess both vertical and lateral collinearity. According to the criteria outlined by Kock and
Lynn (2012), a VIF exceeding 3.3 might indicate problematic collinearity. However, as
illustrated in Table 1, our study did not exhibit any issues related to CMB, affirming the
robustness and integrity of our findings. Therefore, we can conclude that neither NRB nor
CMB are serious threats in our study.

4.2 Confirmatory factor analysis

In the evaluation of our measurement model, attention was directed towards item
reliability, internal consistency reliability, convergent validity, and discriminant validity.
As presented in Table 2, the factor loadings for these indicators did not reveal any
significant issues, with most items surpassing the recommended threshold of 0.707
(Hair et al., 2017). To assess internal consistency, composite reliability (CR) was employed,
with a focus on meeting the 0.70 cut-off criteria. The results of the CR analysis indicated a
high level of internal consistency for the constructs, thereby supporting the reliability of the
latent variable measurements. This outcome reinforces the overall robustness of the
measurement model. Convergent validity was confirmed through the average variance
extracted (AVE), which exceeded the recommended threshold of 0.50 (see Table 2). This
indicates that the variance in each construct is effectively captured by its respective
indicators.
Discriminant validity was rigorously examined using Fornell and Lacker’s method,
along with the heterotrait-monotrait ratio (HTMT). As displayed in Table 3, Fornell and
Lacker’s method demonstrated that the AVE for each construct exceeded the shared
variance with other latent variables. To enhance this assessment, Henseler et al. (2015)
recommended the utilization of the HTMT of correlations, a more robust method grounded
in a multitrait-multimethod matrix. In Table 4, all HTMT values remained below 0.90,
providing strong evidence for the discriminant validity of each variable pair. Additionally,
all HTMT values significantly deviated from 1, and the 95% confidence intervals (CI)
excluded 1, further reinforcing the robust discriminant validity of each variable pair
(Henseler et al., 2015).
EJIM AVE/
1st-order 2nd-order Loading/ CR/ t- p-
constructs constructs Items and wording Scale weight VIF value value

Green Our company attaches great Reflective 0.762 0.821 0.655 n.a
entrepreneurial importance to green
orientation development, such as green
R&D and green innovation
When facing uncertainty, we 0.755
usually take a proactive attitude
to seize potential green
opportunities
Compared with competitors, we 0.885
usually take the lead in green
activity
Our company tends to be the 0.795
first mover to launch green
products, services or
technologies
We usually have an advantage 0.862
over our competitors when it
comes to dealing with them
Our company develops new 0.755
products and processes that
consider environmental issues
Our company is engaged in 0.811
reducing the environmental
impact of products and
processes
Knowledge My organization regularly Reflective 0.868 0.833 0.698 n.a
acquisition acquires information about
environment-friendly products
and processes/services from
external stakeholders (e.g.
customers and suppliers)
My organization regularly 0.788
acquires information about
environment-friendly products
and processes/services from
internal stakeholders (e.g.
management and staff)
My organization regularly 0.856
arranges training sessions for
employees to develop their
knowledge about environment-
friendly products and processes/
services
We have a well-developed 0.863
information system through
which employees can acquire
Table 2. the required information
My organization encourages 0.798
Measurement model:
and supports the employees to
1st-order constructs, acquire knowledge about
2nd-order constructs, environment-friendly products
items wording loading/ and processes/services
weight, CR/VIF, AVE/
t-value p-value (continued )
 European Journal
AVE/
1st-order 2nd-order Loading/ CR/ t- p-
of Innovation
constructs constructs Items and wording Scale weight VIF value value Management
Knowledge My organization has sufficient Reflective 0.852 0.864 0.611 n.a
storage information about environment-
friendly products and processes/
services
We have an excellent 0.874
information system to manage
information regarding
environment-friendly products
and processes/services
It is easy to retrieve information 0.779
about a specific problem from
our information system
We have comprehensive 0.836
information about our
competitors and the impact of
their operations on the natural
environment
Even if any person leaves, our 0.855
information system keeps their
best knowledge
Knowledge People within our organization Reflective 0.817 0.878 0.684 n.a
sharing regularly interact with each
other to discuss different
environmental developments
and share knowledge
We have a well-organized 0.859
system through which we can
share knowledge and learn from
each other
We are provided with the latest 0.842
equipment and technology to
obtain and share knowledge
My organization recognizes and 0.855
rewards the employees for
sharing innovative ideas and
information to improve the
process for the protection of the
natural environment
My organization regularly share 0.791
the latest environmental
knowledge and market trends
with its employees through
e-mail, training sessions, and
workshops
We regularly share information 0.871
and knowledge related to the
natural environment with our
customers, suppliers, and other
stakeholders

(continued ) Table 2.
EJIM AVE/
1st-order 2nd-order Loading/ CR/ t- p-
constructs constructs Items and wording Scale weight VIF value value

Knowledge My organization fully comply Reflective 0.785 0.847 0.634 n.a

application with environmental regulations
in its operations
My organization ensures the 0.896
application of acquired
knowledge to produce
environment-friendly products
and services
We use the knowledge obtained 0.877
from our experiences and
mistakes to improve our
environmental performance
We use the acquired knowledge 0.799
to develop our environment-
friendly business strategies
We have strong commitments to 0.787
implementing environment-
friendly strategies
Knowledge My organization uses existing 0.871 0.778 0.561 n.a
creation information to create
environment-friendly products
and services
The management encourages 0.894
debates and discussions to
create new knowledge
Employees proposing new 0.879
ideas, knowledge, and solutions
are highly appreciated and
rewarded by the management
We used to collaborate with 0.859
other firms to create
environment-friendly products
or processes/services
We regularly evaluate new ideas 0.875
for further refinement
Green Knowledge Knowledge Acquisition Formative 0.318 1.461 3.491 0.000
Management Knowledge Storage 0.322 1.486 3.896 0.000
Knowledge Sharing 0.321 1.264 4.200 0.000
Knowledge Application 0.322 1.491 2.175 0.000
Knowledge Creation 0.247 1.315 2.574 0.001
Digital strategy We investigate the newest Reflective 0.881 0.887 0.612 n.a
trends and future scenarios in
digitalization to stay
competitive
Digital projects have a high 0.874
priority within our business
We constantly update and refine 0.859
our digital strategy
Digital capability Acquiring important digital Reflective 0.78 0.784 0.645 n.a
technologies
Identifying new digital 0.852
opportunities
Responding to digital 0.859
transformation
Mastering state-of-the-art digital 0.791
technologies
Digital Digital Strategy Formative 0.411 1.65 3.21 0.000
Transformation Digital Capability 0.387 1.85 2.88 0.000

Table 2. (continued )
 European Journal
AVE/
1st-order 2nd-order Loading/ CR/ t- p-
of Innovation
constructs constructs Items and wording Scale weight VIF value value Management
Capability Understanding the capability of Reflective 0.787 0.852 0.701
your organization–We have the
capabilities required to fully
understand the future pollution
effects of our new products
Understanding the capability of 0.784
your organization–We have the
capabilities required to fully
understand the future materials
life cycle of our new products
Understanding the capability of 0.863
your organization–We have the
capabilities required to fully
understand the future carbon
footprint of our products and
services in use
Understanding the capability of 0.851
your organization–We conduct
environmental research and
development (R&D)
Evaluation Sustainability evaluation that Reflective 0.817 0.867 0.714
your organization carries out–
We evaluate the future pollution
effects of our new products in
use
Sustainability evaluation that 0.854
your organization carries out–
We evaluate the future materials
life cycle of our products and
services in use
Sustainability evaluation that 0.778
your organization carries out–
We evaluate the future carbon
footprint of our products and
services in use
Sustainability evaluation that 0.844
your organization carries out–
We evaluate the current
pollution contribution of our
day-to-day operation
Sustainability evaluation that
your organization carries out–
We evaluate the current
materials life cycle of our day-to-
day operations
Sustainability evaluation that
your organization carries out–
We evaluate the current carbon
footprint of our day-to-day
operations

(continued ) Table 2.
EJIM AVE/
1st-order 2nd-order Loading/ CR/ t- p-
constructs constructs Items and wording Scale weight VIF value value

Products and The sustainability performance Reflective 0.789 0.789 0.687

services of your new products and
services–Our new products and
services will produce zero
pollution
The sustainability performance 0.884
of your new products and
services–The materials life cycle
of our new products and
services will be a closed loop
with no landfill
The sustainability performance 0.832
of your new products and
services–Our new products and
services will have a zero or
negative carbon footprint
The sustainability performance 0.852
of your new products and
services–Our new products and
services are sustainable
The sustainability performance 0.795
of your new products and
services–Our new products and
services will be socially
beneficial
Operations The sustainability performance Reflective 0.881 0.844 0.581
of your organization’s
operations–Our day-to-day
operations produce zero
pollution
The sustainability performance 0.874
of your organization’s
operations–The materials life
cycle of our day-to-day
operations is a closed loop; there
is no landfill
The sustainability performance 0.795
of your organization’s
operations–Our day-to-day
operations have a zero or
negative carbon footprint
The sustainability performance 0.834
of your organization’s
operations–Our day-to-day
operations are sustainable
Increase in energy saved due to 0.782
conservation and efficiency
improvements
Strategy Your sustainability strategy– Reflective 0.818 0.817 0.641
We strive to meet exceptionally
high environmental goals
Your sustainability strategy– 0.833
Our top management are fully
committed to sustainability
Your sustainability strategy– 0.831
Our sustainability strategy is
proactive, and goes well beyond
current regulations
Your sustainability strategy– 0.844
Our sustainability strategy is
radical, and aims higher than
others in our industry

Table 2. (continued )
 European Journal
AVE/
1st-order 2nd-order Loading/ CR/ t- p-
of Innovation
constructs constructs Items and wording Scale weight VIF value value Management
Partnerships Organizational partnerships for Reflective 0.841 0.811 0.661
sustainability-Our innovations
could not be delivered by our
organization alone
Organizational partnerships for 0.762
sustainability-We collaborate
with a wide range of external
actors and stakeholders
Organizational partnerships for 0.866
sustainability-Our
sustainability goals are
informed by a wide range of
external views
Organizational partnerships for
sustainability-We are willing to
make new partnerships in order
to meet our sustainability goals
Economic Economic sustainability–My Reflective 0.837 0.825 0.656
organization will produce
economically beneficial
products and services
Economic sustainability–Our 0.813
innovation decisions include
finance as a central
consideration (e.g. costs,
revenues)
Economic sustainability–My 0.756
organization is economically
excellent
Social Social dimensions of Reflective 0.753 0.878 0.587
sustainability-My organization
has excellent health and safety
Social dimensions of 0.871
sustainability -My organization
has excellent working
conditions
Social dimensions of 0.794
sustainability–My organization
has excellent stakeholder and
social dialogue
Social dimensions of 0.766
sustainability–My organization
improves the education and
training of its workers
Demand Demand patterns-We are Reflective 0.774 0.894 0.614
considering how our new
products and services might
change demand patterns
Demand patterns-We are 0.854
considering how our new
products and services could be
delivered through new business
models
Demand patterns-We are 0.787
considering how our new
products and services could be
delivered through new service
systems
Demand patterns-We are 0.859
considering the future effect of
new regulatory systems
Capability 0.167 1.39 3.49 0.000
Evaluation 0.322 1.52 3.89 0.000

(continued ) Table 2.
EJIM AVE/
1st-order 2nd-order Loading/ CR/ t- p-
constructs constructs Items and wording Scale weight VIF value value

Products and Services 0.193 2.27 2.21 0.000

Operations 0.277 2.55 2.17 0.000
Strategy 0.435 2.06 3.57 0.000
Partnerships 0.138 2.08 2.49 0.000
Economic 0.296 2.11 3.89 0.000
Social 0.428 2.51 4.20 0.000
Demand 0.177 1.35 2.17 0.000
Circular economy The firm is devoted to reducing Reflective 0.758 0.875 0.598
the unit product manual input
The firm is devoted to reducing 0.844
the consumption of raw
materials and energy
The firm initiatively enhances 0.743
the energy efficiency of
production equipment
Product packaging materials are 0.841
used repeatedly
Equipment cleaning materials 0.844
are used repeatedly
Leftover material is used 0.745
repeatedly to manufacture other
products
Waste produced in the
manufacturing process is
recycled
Waste products from consumers
is recycled
Recycling waste and garbage is
reprocessed
Waste and garbage is used after
reprocessing to manufacture
new products
Note(s): CR5 Composite Reliability, AVE 5 Average Variance Extracted
Table 2. Source(s): Authors own creation

Constructs Mean SD 1 2 3 4 5

1. Green entrepreneurial orientation 3.411 0.551 0.781

2. Green knowledge management 3.427 0.531 0.611 0.745
3. Digital transformation 4.141 0.626 0.432 0.589 0.834
4. Sustainability-oriented innovation 3.134 0.536 0.134 0.166 0.483 0.811
5. Circular economy 4.56 0.556 0.337 0.587 0.472 0.305 0.722
Table 3. Note(s): S.D. 5 Standard Deviation. Italic values on the diagonal in the correlation matrix are square roots of
Descriptive statistics, AVE (variance shared between the constructs and their respective measures). Off-diagonal elements below the
correlation matrix, and diagonal are correlations among the constructs, where values between 0.13 and 0.16 are significant at p < 0.05,
discriminant validity and values above 0.16 are significant at p < 0.01 (two-tailed test)
via Fornell and Larcker Source(s): Authors own creation

4.3 Results
Table 5 presents the findings related to hypothesis H1, indicating a positive association
between green entrepreneurial orientation and sustainability-oriented innovation (β 5 0.415,
t 5 3.368, p < 0.000). Similarly, hypothesis H2 revealed a positive relationship between green
entrepreneurial orientation and circular economy (β 5 0.354, t 5 3.147, p < 0.000). Thus, both
H1 and H2 hypotheses find support.
 Consistent with our hypothesis H3, the positive impact of green entrepreneurial European Journal
orientation, sustainability-oriented innovation, and circular economy is mediated by green of Innovation
knowledge management. Using a bootstrapping method with 5,000 subsamples, a notable Management
indirect impact of green entrepreneurial orientation on sustainability-oriented innovation and
circular economy through green knowledge management is identified (indirect effect 5 0.268,
t 5 2.85, p < 0.000, Table 5). With the 95% confidence interval excluding 0 (lower
limit 5 0.023, upper limit 5 0.158), we confirm the existence of mediation (Preacher and
Hayes, 2008). This underscores the significant mediating role of green knowledge
management in the relationship between green entrepreneurial orientation, sustainability-
oriented innovation, and circular economy, offering robust support for hypothesis H3.
Aligned with the primary objectives, the moderation analysis investigated whether digital
transformation moderates the associations between green entrepreneurial orientation and
sustainability-oriented innovation and circular economy. Additionally, interactions
involving green entrepreneurial orientation, green knowledge management, and
sustainability-oriented innovation along with circular economy were explored. The
findings for these interactions are outlined below:

Constructs 1 2 3 4 5

1. Green entrepreneurial orientation

2. Green knowledge management 0.452
3. Digital transformation 0.381 0.662
4. Sustainability-oriented innovation 0.534 0.644 0.522
5. Circular economy 0.185 0.263 0.391 0.561 Table 4.
Note(s): HTMT should be lower than 0.85 Discriminant validity
Source(s): Authors own creation via HTMT

Bias and
corrected
bootstrap 95%
CI
BCI BCI
Std Std p- 95% 95%
Hypothesis Direct effect Beta error t-value value LL UL Decision

H-1 Green Entrepreneurial 0.415 0.087 3.368 0.000 0.112 0.366 Supported
Orientation →
Sustainability-oriented
Innovation
H-2 Green Entrepreneurial 0.354 0.078 3.147 0.000 0.214 0.551 Supported
Orientation → Circular
Economy
Structural path analysis: indirect effect
H-3 GEO → GKM → S-OI and 0.268 0.087 2.85 0.000 0.023 0.158 Supported
CE
Note(s): n 5 350. Bootstrap sample size 5 5,000. SE 5 standard error; LL 5 lower limit; CI 5 confidence
interval; UL 5 upper limit 95% bias-correlated CI Table 5.
Kyes: GEO 5 Green Entrepreneurial Orientation, GKM 5 Green Knowledge Management, S-OI5 Structural path
Sustainability-Oriented Innovation And CE5 Circular Economy analysis: direct and
Source(s): Authors own creation indirect effects
EJIM As shown in Table 6, the initial interaction between green entrepreneurial orientation,
sustainability-oriented innovation, and circular economy yielded significant results, with
coefficients (β 5 0.187, t 5 2.23, p < 0.000) and (β 5 0.153, t 5 2.20, p < 0.000). Consequently,
hypothesis H4a receives support. Regarding the second interaction specified in hypothesis
H4b, involving green entrepreneurial orientation and green knowledge management
concerning sustainability-oriented innovation and circular economy, the analysis revealed
a noteworthy interaction, with coefficients (β 5 0.198, t 5 4.73, p < 0.000) and (β 5 0.151,
t 5 2.87, p < 0.001), respectively. The third interaction examining the relationship between
green knowledge management and digital transformation affecting sustainability-oriented
innovation and circular economy demonstrated a positive interaction, with coefficients
(β 5 0.15, t 5 2.87, p < 0.001) and (β 5 0.177, t 5 3.52, p < 0.000). Thus, hypothesis H4c is
confirmed.
Generally, discerning the nuances of how a moderation analysis diverges for high and low
interaction can be challenging. Dawson (2014) proposed addressing this issue by
supplementing the analysis with an interaction plot. Therefore, this study incorporated
interaction plots for all interactions to assess the slope gradients.
In Figure 2, the line labeled ‘high digital transformation’ for the first interaction exhibits a
steeper gradient compared to ‘low digital transformation,’ suggesting that a higher digital
transformation accentuates the positive relationship between green entrepreneurial
orientation, sustainability-oriented innovation, and circular economy. The second
interaction involves green entrepreneurial orientation, digital transformation, and green
knowledge management. The interaction plot (Figure 3) illustrates that the positive

Bias and
corrected
bootstrap
95% CI
BCI BCI
Structural path analysis: Std Std p- 95% 95%
Hypothesis interaction effect Beta error t-value value LL UL Decision

H-4a Green Entrepreneurial 0.187 0.076 2.23 0.000 0.010 0.274 Supported
Orientation 3 Digital 0.153 0.084 2.20 0.000 0.014 0.283
Transformation →
Sustainability-oriented
Innovation and Circular
Economy
H-4b Green Entrepreneurial 0.198 0.078 4.73 0.000 0.047 0.347 Supported
Orientation 3 Digital
Transformation → Green
Knowledge Management
H-4c Green Knowledge 0.151 0.054 2.87 0.001 0.069 0.259 Supported
Management 3 Digital 0.177 0.067 3.52 0.000 0.121 0.287
Transformation →
Sustainability-oriented
Innovation Circular
Economy
Note(s): n 5 350. Bootstrap sample size 5 5,000. SE 5 standard error; LL 5 lower limit; CI 5 confidence
Table 6. interval; UL 5 upper limit 95% bias-correlated CI
Structural path Kyes: GEO 5 Green Entrepreneurial Orientation, GKM 5 Green Knowledge Management, S-OI5
analysis: interaction Sustainability-Oriented Innovation And CE5 Circular Economy
effects Source(s): Authors own creation
 Low Digital Transformation European Journal
of Innovation
High Digital Transformation Management
5
Sustainability-oriented Innovation

4.5
Circular Economy

4
3.5
3
2.5
Figure 2.
2 Interaction plot of
1.5 green entrepreneurial
orientation and digital
1 transformation on the
Low Green Entrepreneurial High Green Entrepreneurial sustainability-oriented
Orientation Orientation innovation and circular
economy
Source(s): Authors own creation

Low Digital Transformation

High Digital Transformation

Green Knowledge Management

5
4.5
4
3.5
3
2.5
2
Figure 3.
1.5 Interaction plot of
green entrepreneurial
1 orientation and digital
Low Green Entrepreneurial High Green Entrepreneurial transformation on the
Orientation Orientation green knowledge
management
Source(s): Authors own creation

relationship among these variables is accentuated when digital transformation is higher.

Figure 4 illustrates the interaction between green knowledge management and digital
transformation concerning sustainability-oriented innovation and circular economy. As
evident from the interaction plot, a high digital transformation value enhances the positive
relationship between green knowledge management and sustainability-oriented innovation
and circular economy.
EJIM Low Digital Transformation

High Digital Transformation

5

Sustainability-oriented Innovation
4.5
4

Circular Economy 3.5

3
2.5
Figure 4. 2
Interaction plot of
green knowledge 1.5
management and
digital transformation 1
on the sustainability- Low Green Knowledge High Green Knowledge
oriented innovation Management Management
and circular economy
Source(s): Authors own creation

5. Discussion and practical implications

This research delves into the complex relationships among green entrepreneurial orientation,
sustainability-oriented innovation, and the circular economy, with a particular focus on the
pivotal role of green knowledge management. The study envisions a transformative
trajectory towards a resilient and ecologically harmonious future. The primary objective is to
explore the interplay between green entrepreneurial orientations, sustainability-oriented
innovation, and the circular economy, with green knowledge management serving as a
crucial mechanism. Additionally, the research introduces digital transformation as a
conditional variable shaping these relationships.
The key findings reveal a robust positive relationship among green entrepreneurial
orientations, sustainability-oriented innovation, and the circular economy. These results
align with existing research that highlights the positive influence of green entrepreneurial
orientation on identifying and capitalizing on opportunities for sustainability-oriented
innovations and circular economy practices (e.g. Frare and Beuren, 2022; Mondal et al., 2023b;
Shepherd and Patzelt, 2011). Moreover, this relationship is positively mediated by the role of
green knowledge management, ensuring businesses are well-prepared for the transformative
shift towards circularity (Al Halbusi et al., 2023b; Polas et al., 2023). The study further
demonstrates that these relationships are strengthened when digital transformation is high.
These findings hold implications for both theoretical understanding and practical
applications.
The research contributes valuable insights into the intricate relationships between
technology, sustainability, and green business practices (Saarikko et al., 2020; Shaik et al.,
2023). The positive mediation effect of green knowledge management underscores its
strategic importance in fostering sustainable innovation within the circular economy (Al
Halbusi et al., 2023b). Additionally, the amplification of these relationships in the presence of
higher levels of digital transformation highlights the transformative potential of advanced
technological strategies in enhancing the interaction between green entrepreneurial
orientations and sustainability-oriented innovation (Soto-Acosta, 2020, 2024). Overall, this
study significantly advances our comprehension of the complex mechanisms driving
environmentally conscious entrepreneurship and innovation, facilitating informed decision-
making and strategic planning towards a more sustainable future.
 The comprehensive analysis of green entrepreneurial orientations, green knowledge European Journal
management, sustainability-oriented innovation, circular economy, and digitalization of Innovation
strategy in this research underscores the importance of consistent elements crucial for Management
policymakers and practitioners navigating the complex landscape of sustainable business
practices (Meseguer-Martinez et al., 2021). For policymakers, the amalgamation of these
factors prompts a reevaluation and restructuring of existing frameworks to support
mechanisms for green entrepreneurship. Insights from the study suggest the necessity for
adaptive policies that incentivize environmentally sensible business endeavors, foster
knowledge sharing focused on green practices, and promote an ecosystem conducive to
sustainability-oriented innovation within the circular economy (Al Halbusi et al., 2022, 2023a;
Falahat et al., 2022). Policymakers are encouraged to formulate strategies acknowledging the
role of digitalization in shaping the green business landscape and actively incorporating it to
amplify the impact of sustainable initiatives. By aligning policy initiatives with the dynamics
of green entrepreneurial orientations, policymakers can initiate a transformative wave,
steering economies towards a more sustainable course.
On the practical front, practitioners stand to gain a roadmap for navigating the
intersection of green entrepreneurship, knowledge management, sustainability-oriented
innovation, circular economy practices, and digitalization strategies. The research
underscores the strategic importance of integrating green knowledge management into
organizational structures, advocating for its role as a corner stone in steering businesses
towards sustainability. Practitioners are encouraged to adopt a holistic approach to
sustainability-oriented innovation, leveraging insights from circular economy principles and
aligning them with digitalization strategies to propel their organizations to the forefront of
green business practices. The study highlights the imperative for organizations to embrace a
digitalization strategy that not only enhances operational efficiency but also acts as a catalyst
for the seamless integration of environmentally conscious practices (Soto-Acosta, 2020, 2024).
By understanding and leveraging the intricate relationships between these elements,
practitioners can strategically position their organizations for long-term success in a global
landscape increasingly defined by sustainability imperatives and technological
advancements (B€ahr and Fliaster, 2023; Soto-Acosta and Mero~ no-Cerdan, 2009). In essence,
this research serves as a practical guide for both policymakers and practitioners, offering a
nuanced understanding of the multifaceted dimensions of sustainable business in a new era
where environmental responsibility and economic prosperity must harmonize.

6. Limitations and future research

While this research significantly advances our understanding of the relationships between green
entrepreneurial orientations, sustainability-oriented innovation, the circular economy, and the
mediating role of green knowledge management, it is vital to acknowledge certain limitations
inherent in the study. Firstly, the focus on Saudi manufacturing firms may limit the
generalizability of the findings to other industries or regions with different economic, cultural,
or regulatory contexts. The scope of the study also centers on the manufacturing sector, potentially
excluding nuances specific to service-oriented industries. Secondly, the reliance on cross-sectional
data from a single point in time may restrict the ability to establish action or capture dynamic
changes over time. Thirdly, the study primarily relies on self-reported data, introducing the
possibility of response bias or subjectivity in participants’ perceptions. Future research endeavors
could consider longitudinal designs, encompassing a broader spectrum of industries, geographical
locations, and sources, to enhance the external validity and generalizability of the findings.
Exploring variations in the impact of digital transformation across diverse contexts and industries
would provide a more accurate understanding of its conditional effects on the relationships under
examination. Researchers are encouraged to explore deeper into the specific mechanisms through
EJIM which digital transformation influences the interplay of green entrepreneurial orientations,
sustainability-oriented innovation, and circular economy practices. Additionally, investigating the
moderating role of contextual factors, such as regulatory environments or organizational cultures,
could enrich our understanding of the complex dynamics involved.
One crucial avenue for exploration is the integration of emerging technologies as influential
factors in the nexus of green entrepreneurial orientations, sustainability-oriented innovation,
and circular economy practices. For instance, future research could delve into the impact of
blockchain technology on sustainable business practices. Furthermore, the adaptation of
artificial intelligence (AI) permits careful examination as a potential driver of sustainability-
oriented innovation, particularly in improving resource allocation and energy efficiency.
Furthermore, variables related to corporate governance structures, industry-specific
regulations, and organizational cultures could be integral in comprehending the nuances of
sustainability practices across various sectors. By incorporating these variables into future
research designs, scholars can contribute to a more precise and complete understanding of the
multifaceted dynamics shaping the intersection of technology, sustainability, and green
business practices. Such endeavors will advance academic discourse and provide actionable
insights for policymakers and practitioners seeking to navigate the evolving landscape of
sustainable entrepreneurship and innovation in the digital era.

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Corresponding author
Pedro Soto-Acosta can be contacted at: [email protected]

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