Determinants of Economic Sustainability: Exploring the Role of Knowledge Management with the Mediating Influence of Green Innovation in Pakistani Manufacturing SMEs

Abstract

This study investigates the interconnected dynamics of knowledge management, green innovation, and economic performance within the context of manufacturing Small and Medium-sized Enterprises (SMEs) in Lahore, Pakistan. The primary objective is to explore the impact of knowledge management on the economic performance of SMEs and ascertain the mediating role of green innovation in this relationship. The study adopts a quantitative research design grounded in positivism, targeting a population of manufacturing SMEs operating in Lahore. A sample size of 300 managerial-level employees is selected using a simple random sampling strategy, and data is collected through a survey instrument. The findings of the study reveal a significant positive effect of knowledge management on the economic performance of SMEs, affirming the crucial role of effective knowledge-sharing practices in fostering economic success. Furthermore, the study identifies a significant mediating effect of green innovation, highlighting the importance of incorporating environmentally sustainable practices in the innovation processes of SMEs. This research contributes novelty by contextualizing these relationships within the specific industrial landscape of Lahore, Pakistan, filling a gap in the existing literature. The incorporation of green innovation as a mediator adds a unique dimension to the study, emphasizing the relevance of sustainable practices in driving economic performance for SMEs in Lahore.