AI and Digital Innovation as Catalysts for Green Product Innovation and Sustainable Performance
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This study investigates the influence of AI and digital innovation on green product innovation, low-carbon behavior, and sustainable performance within small and medium-sized enterprise. Drawing on a mediation framework, it examines the mediating role of digital innovation between AI and green product innovation, and the mediating effect of green product innovation linking AI with low-carbon behavior and sustainable performance. The study further explores the sequential mediation of digital innovation and green product innovation. Using partial least squares structural equation modeling (PLS-SEM), data were collected from 1,336 respondents representing SMEs in developing economies. The results indicate that AI significantly and positively affects digital innovation and green product innovation. Digital innovation acts as a key mechanism through which AI strengthens green product innovation, while green product innovation mediates the effects of AI on low-carbon behavior and sustainable performance. These findings highlight the strategic value of AI-enabled digital innovation in advancing environmental sustainability. The study offers theoretical and practical implications for managers and policymakers, showing how SMEs can leverage AI and digital innovation to foster innovation and sustainable performance.
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