Absorptive Capacity, Green Entrepreneurship, and Sustainable Human Capital Effects on Green Innovation in SMEs

https://doi.org/10.35912/ahrmr.v5i4.3110
Published: Jan 27, 2026

Abstract:

Purpose: This study utilizes existing research on knowledge capabilities and firms’ Natural Resource-Based View (NRBV) to explore how absorptive capacity and green entrepreneurship orientation influence green innovation. Additionally, it examines the mediating influence of sustainable human capital within this context. Methods: This study was conducted using an associative design and a quantitative approach. The number of samples gathered was 100 valid respondents, and the questionnaire was spread online. The data collected will then be processed and analyzed with the PLS-SEM analysis using SmartPLS software.

Results: The results revealed that green entrepreneurship orientation significantly predicted both sustainable capability and the adoption of green innovation. Additionally, sustainable human capital is a critical determinant of green innovation adoption. Surprisingly, absorptive capacity did not significantly influence green innovation. Hence, several hypotheses were proven to be correct.

Conclusion: The results indicate that increasing R&D investment, e-commerce employment, and transaction volume can significantly boost Indonesia's economic growth, demonstrating the importance of these factors in driving the digital economy’s growth.

Limitations: This study was limited to SMEs in Greater Jakarta with small samples.

Contribution: These results have several implications for SMEs to further enrich the understanding of how the Natural Resource-Based View (NRBV) and relational theory facilitate adaptation to green innovation.

Keywords:
1. Absorptive Capacity
2. Green Innovation
3. Green Entrepreneurship Orientation
4. Sustainable Human Capital
Authors:
1 . Selly Novela
Bina Nusantara University, Jakarta, Indonesia
2 . Ahmad Giffari
Bina Nusantara University, Jakarta, Indonesia
3 . Muhammad Khairul Nizam
Bina Nusantara University, Jakarta, Indonesia
4 . Akmal Ihsan
Sunan Kalijaga State Islamic University, Yogyakarta, Indonesia
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How to Cite
Novela, S. ., Giffari, A. ., Nizam, M. K. ., & Ihsan, A. . (2026). Absorptive Capacity, Green Entrepreneurship, and Sustainable Human Capital Effects on Green Innovation in SMEs. Annals of Human Resource Management Research, 5(4), 387–402. https://doi.org/10.35912/ahrmr.v5i4.3110
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Issue & Section
Vol. 5 No. 4 (2025): December
Articles
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This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Author Biographies

Ahmad Giffari, Bina Nusantara University, Jakarta, Indonesia

Dr. Ahmad Giffari is a professional who besides working in government institutions is also a lecturer at Bina Nusantara University in the Business Creation Program, and teaches Business Sustainability and Business Ethics courses.

Muhammad Khairul Nizam, Bina Nusantara University, Jakarta, Indonesia

Muhammad Khairul Nizam is a final year student majoring in Business Creation Program, Binus University, who is currently running an enrichment program, which is doing real work practice in the field of entrepreneurship.

Akmal Ihsan, Sunan Kalijaga State Islamic University, Yogyakarta, Indonesia

Akmal Ihsan is a lecturer who teaches at Sunan Kalijaga State Islamic University Yogyakarta, in the management study program.

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    Allameh, S. M. (2018). Antecedents and consequences of intellectual capital: The role of social capital, knowledge sharing and innovation. Journal of Intellectual Capital, 19(5), 858-874. doi:https://doi.org/10.1108/JIC-05-2017-0068

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  1. Abdullah, M., Zailani, S., Iranmanesh, M., & Jayaraman, K. (2016). Barriers to green innovation initiatives among manufacturers: the Malaysian case. Review of managerial science, 10(4), 683-709. doi:https://doi.org/10.1007/s11846-015-0173-9
  2. Aboelmaged, M., & Hashem, G. (2019). Absorptive capacity and green innovation adoption in SMEs: The mediating effects of sustainable organisational capabilities. Journal of Cleaner Production, 220, 853-863. doi:https://doi.org/10.1016/j.jclepro.2019.02.150
  3. Abualoush, S. H. (2022). The effect of absorptive capacity on innovation: the mediator role of human capital, telecommunications companies (Orange, Zain and Umnia) in Jordan. International Journal of Business Information Systems, 40(1), 39-59. doi:https://doi.org/10.1504/IJBIS.2022.122878
  4. Ahmed, S. S., Guozhu, J., Mubarik, S., Khan, M., & Khan, E. (2020). Intellectual capital and business performance: the role of dimensions of absorptive capacity. Journal of Intellectual Capital, 21(1), 23-39. doi:https://doi.org/10.1108/JIC-11-2018-0199
  5. Albort-Morant, G., Henseler, J., Leal-Millán, A., & Cepeda-Carrión, G. (2017). Mapping the field: A bibliometric analysis of green innovation. Sustainability, 9(6), 1011. doi:https://doi.org/10.3390/su9061011
  6. Albort-Morant, G., Leal-Rodríguez, A. L., & De Marchi, V. (2018). Absorptive capacity and relationship learning mechanisms as complementary drivers of green innovation performance. Journal of knowledge management, 22(2), 432-452. doi:https://doi.org/10.1108/JKM-07-2017-0310
  7. Allameh, S. M. (2018). Antecedents and consequences of intellectual capital: The role of social capital, knowledge sharing and innovation. Journal of Intellectual Capital, 19(5), 858-874. doi:https://doi.org/10.1108/JIC-05-2017-0068
  8. Arfi, W. B., Hikkerova, L., & Sahut, J.-M. (2018). External knowledge sources, green innovation and performance. Technological Forecasting and Social Change, 129, 210-220. doi:https://doi.org/10.1016/j.techfore.2017.09.017
  9. Bombiak, E., & Marciniuk-Kluska, A. (2018). Green human resource management as a tool for the sustainable development of enterprises: Polish young company experience. Sustainability, 10(6), 1739. doi:https://doi.org/10.3390/su10061739
  10. Capelleras, J.-L., Martin-Sanchez, V., Rialp, J., & Shleha, W. (2018). Entrepreneurs’ export orientation and growth aspirations: the moderating role of individual human capital Rethinking Entrepreneurial Human Capital: The Role of Innovation and Collaboration (pp. 63-87): Springer.
  11. Chams, N., & García-Blandón, J. (2019). On the importance of sustainable human resource management for the adoption of sustainable development goals. Resources, Conservation and Recycling, 141, 109-122. doi:https://doi.org/10.1016/j.resconrec.2018.10.006
  12. Chowhan, J. (2016). Unpacking the black box: understanding the relationship between strategy, HRM practices, innovation and organizational performance. Human Resource Management Journal, 26(2), 112-133. doi:https://doi.org/10.1111/1748-8583.12097
  13. Coelho, A., Ferreira, J., & Proença, C. (2024). The impact of green entrepreneurial orientation on sustainability performance through the effects of green product and process innovation: The moderating role of ambidexterity. Business Strategy and the Environment, 33(4), 3184-3202. doi:https://doi.org/10.1002/bse.3648
  14. Del Giudice, M., Soto-Acosta, P., Carayannis, E., & Scuotto, V. (2018). Emerging perspectives on business process management (BPM): IT-based processes and ambidextrous organizations, theory and practice. Business process management journal, 24(5), 1070-1076. doi:https://doi.org/10.1108/BPMJ-09-2018-336
  15. Demirel, P., Li, Q. C., Rentocchini, F., & Tamvada, J. P. (2019). Born to be green: new insights into the economics and management of green entrepreneurship. Small business economics, 52(4), 759-771. doi:https://doi.org/10.1007/s11187-017-9933-z
  16. Dias, C., Gouveia Rodrigues, R., & Ferreira, J. J. (2021). Small agricultural businesses' performance—What is the role of dynamic capabilities, entrepreneurial orientation, and environmental sustainability commitment? Business Strategy and the Environment, 30(4), 1898-1912. doi:https://doi.org/10.1002/bse.2723
  17. Du, Y., & Wang, H. (2022). Green innovation sustainability: how green market orientation and absorptive capacity matter? Sustainability, 14(13), 8192. doi:https://doi.org/10.3390/su14138192
  18. Ebrahimi, P., & Mirbargkar, S. M. (2017). Green entrepreneurship and green innovation for SME development in market turbulence. Eurasian Business Review, 7(2), 203-228. doi:https://doi.org/10.1007/s40821-017-0073-9
  19. Fang, L., Shi, S., Gao, J., & Li, X. (2022). The mediating role of green innovation and green culture in the relationship between green human resource management and environmental performance. PloS one, 17(9), e0274820. doi:https://doi.org/10.1371/journal.pone.0274820
  20. Gast, J., Gundolf, K., & Cesinger, B. (2017). Doing business in a green way: A systematic review of the ecological sustainability entrepreneurship literature and future research directions. Journal of Cleaner Production, 147, 44-56. doi:https://doi.org/10.1016/j.jclepro.2017.01.065
  21. Gherghina, ?. C., Botezatu, M. A., Hosszu, A., & Simionescu, L. N. (2020). Small and medium-sized enterprises (SMEs): The engine of economic growth through investments and innovation. Sustainability, 12(1), 347. doi:https://doi.org/10.3390/su12010347
  22. Guo, Y., Wang, L., & Chen, Y. (2020). Green entrepreneurial orientation and green innovation: The mediating effect of supply chain learning. SAGE Open, 10(1), 2158244019898798. doi:https://doi.org/10.1177/2158244019898798
  23. Gupta, A., & Jangra, S. (2024). Green human resource management and work engagement: Linking HRM performance attributions. Sustainable Futures, 7, 100174. doi:https://doi.org/10.1016/j.sftr.2024.100174
  24. Habib, M. A., Bao, Y., & Ilmudeen, A. (2020). The impact of green entrepreneurial orientation, market orientation and green supply chain management practices on sustainable firm performance. Cogent Business & Management, 7(1), 1743616. doi:https://doi.org/10.1080/23311975.2020.1743616
  25. Hair, J., & Alamer, A. (2022). Partial Least Squares Structural Equation Modeling (PLS-SEM) in second language and education research: Guidelines using an applied example. Research Methods in Applied Linguistics, 1(3), 100027. doi:https://doi.org/10.1016/j.rmal.2022.100027
  26. Hair, J., Risher, J., Sarstedt, M., & Ringle, C. (2018). When to use and how to report the results of PLS-SEM. European Business Review, 31. doi:https://doi.org/10.1108/EBR-11-2018-0203?urlappend=%3Futm_source%3Dresearchgate
  27. Haldorai, K., Kim, W. G., & Garcia, R. F. (2022). Top management green commitment and green intellectual capital as enablers of hotel environmental performance: The mediating role of green human resource management. Tourism Management, 88, 104431. doi:https://doi.org/10.1016/j.tourman.2021.104431
  28. Hermundsdottir, F., & Aspelund, A. (2022). Competitive sustainable manufacturing-Sustainability strategies, environmental and social innovations, and their effects on firm performance. Journal of cleaner production, 370, 1-11. doi:https://doi.org/10.1016/j.jclepro.2022.133474
  29. Jabbour, C. J. C., & de Sousa Jabbour, A. B. L. (2016). Green human resource management and green supply chain management: Linking two emerging agendas. Journal of Cleaner Production, 112, 1824-1833. doi:https://doi.org/10.1016/j.jclepro.2015.01.052
  30. Leal-Millán, A., Roldán, J. L., Leal-Rodríguez, A. L., & Ortega-Gutiérrez, J. (2016). IT and relationship learning in networks as drivers of green innovation and customer capital: Evidence from the automobile sector. Journal of knowledge management, 20(3), 444-464. doi:https://doi.org/10.1108/JKM-05-2015-0203
  31. Majali, T. e., Alkaraki, M., Asad, M., Aladwan, N., & Aledeinat, M. (2022). Green transformational leadership, green entrepreneurial orientation and performance of SMEs: The mediating role of green product innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(4), 191. doi:https://doi.org/10.3390/joitmc8040191
  32. Makhloufi, L., Laghouag, A. A., Meirun, T., & Belaid, F. (2022). Impact of green entrepreneurship orientation on environmental performance: The natural resource?based view and environmental policy perspective. Business Strategy and the Environment, 31(1), 425-444. doi:https://doi.org/10.1002/bse.2902
  33. Mao, H., Wang, Z., & Yi, L. (2021). Does entrepreneurial orientation lead to successful sustainable innovation? The evidence from Chinese environmentally friendly companies. Sustainability, 13(18), 10294. doi:https://doi.org/10.3390/su131810294
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