THE MEDIATING ROLE OF INNOVATION CAPABILITY ON THE RELATIONSHIP BETWEEN CORPORATE SUSTAINABILITY AND INNOVATION PERFORMANCE IN INDIA: A STRUCTURAL EQUATION MODELLING APPROACH

Abstract

Sustainability is a key strategy that today's companies must implement in order to ensure their long-term competitiveness and enhance their innovation results. The present study explores the connection among corporate sustainability, innovation performance and the role of innovation capability as a mediating factor in Indian organizational setting. Based on the RBV and DC theory, the study examines sustainability-oriented practices and their impact on improved innovation performance. The quantitative cross sectional research design was used and a structured questionnaire was used to collect data from 391 employees and managers from different organizations in India. Structural Equation Modelling (SEM) was applied in analysing the proposed relationships. The results suggest that the positive effect of corporate sustainability on both innovation capability and innovation performance. The results also confirm that the innovation capability has a significant positive impact on innovation performance and it partially mediates the relationship between corporate sustainability and innovation performance. The results indicate that combining capabilities with sustainability activities can enhance innovation performance. The study adds to the existing body of literature on sustainability and innovation, offering empirical evidence in the Indian context. The results provide useful guidance to managers and policy makers who aim to use the corporate sustainability as a strategic asset to generate innovation and increase the competitiveness of the organization in the long-term.