Mapping Green Innovation in SMEs: Internal-External Drivers, Performance Impacts, and Product Differences

Abstract

Industrialization has accelerated global economic growth but has simultaneously intensified environmental degradation through resource depletion, pollution, and rising ecological pressures. In response, green innovation has emerged as a strategic pathway for firms particularly small and medium-sized enterprises (SMEs) to integrate environmental responsibility into their products, processes, and organizational practices. However, the adoption of green innovation within SMEs in developing economies remains limited due to constrained resources, institutional complexity, and inconsistent regulatory enforcement. This study conducts a systematic literature review (SLR) supported by bibliometric analysis using Scopus-indexed publications to examine three core issues: (1) the influence of internal and external factors on green innovation, (2) the impact of green innovation on SME performance, and (3) the distinctions between green and non-green products. A total of 122 relevant studies were analyzed through PRISMA-based screening, followed by keyword co-occurrence, citation mapping, and thematic clustering using VOSviewer. Findings reveal that internal capabilities such as green HRM, learning orientation, and dynamic capabilities interact with external pressures including regulation, stakeholder expectations, and technological turbulence to shape green innovation adoption. Moreover, green innovation significantly enhances SME competitiveness and sustainable performance. The study contributes by integrating determinants, impacts, and product-level distinctions into a unified framework relevant for SMEs in emerging markets.