Dynamic Capabilities: Amplifying the Effects of Green Transformational Leadership on Corporate Environmental Performance

Purpose – This study aims to understand how dynamic capability (DC) mediates the connection between green transformational leadership (GTL) and corporate environmental performance (CEP). Design/methodology/approach – To achieve this, we collected data from 300 participants in 90 SMEs in Pakistan. Our research employed a quantitative method, specifically structural equation modelling (SEM) with AMOS, to investigate the relationship among the latent variables (i.e. GTP, DC and CEP). Findings – This paper provides evidence of a mediating effect of dynamic capability on green transformational leadership and corporate environmental performance. In line with previous literature, it suggests that DC practices are important for the firm's CEP. In addition, DC positively mediates the relationship between GTL and CEP. Research limitations/implications – While the relationship between GTL and CEP warrants further study, especially in the context of moderating impacts of organizational characteristics such as collaborative culture, the findings of this research have significant practical implications. Understanding the mediating role of DC can help organizations leverage their leadership and dynamic capabilities to enhance their environmental performance. Originality/value – This paper significantly contributes to the literature by providing a deeper understanding of the association between GTP practices and a firm's CEP. The unique aspect of this study is the examination of the mediating role of DCP, which adds a new dimension to the existing body of knowledge.