This study aims to investigate how two digital capabilities – big data analytics and the Internet of Things – relate to sustainable value creation in manufacturing small and medium-sized enterprises (SMEs) through exploitative and exploratory green innovation. Drawing on the dynamic capabilities view (DCV) and organizational ambidexterity, it examines how digital resource orchestration is associated with sustainability-oriented innovation outcomes.
Using survey data from 211 Vietnamese SMEs, Partial Least Squares Structural Equation Modeling (PLS-SEM) was applied to test the research hypotheses.
Both digital capabilities are positively associated with exploitative and exploratory green innovation. However, exploratory green innovation is not significantly related to sustainable performance and does not mediate the effects of digital capabilities. In contrast, exploitative green innovation significantly improves sustainable performance and serves as the primary mediating mechanism linking digital capabilities to sustainability outcomes.
The study extends DCV by clarifying green innovation as the capability-deployment mechanism translating digital capabilities into performance and refines ambidexterity theory by suggesting that exploration may generate delayed or non-financial benefits not captured by conventional sustainable performance measures in SMEs.
Managers should prioritize digital initiatives that reinforce exploitative green innovation, as it is the main mechanism for improving sustainability performance.
The study provides evidence that digital capabilities contribute to sustainable performance mainly through exploitative green innovation, revealing an asymmetric pattern in green ambidexterity that challenges assumptions of equal value across innovation modes.
