This paper aims to examine the impact of realized absorptive capacity, focusing on transformation and exploitation aspects, on the firm’s environmental performance, which includes emissions, innovation and resource efficiency.
A questionnaire was developed using established scales. In total, 255 respondents from the USA and Canada were collected using the Qualtrics marketing panel. The respondents worked in companies at least in the limited deployment stage of Industry 4.0 technologies. They were employed in marketing, business development or sales/distribution roles and worked for an international, multinational or global company. PLS-SEM was used for statistical analysis.
The results indicate that realized absorptive capacity positively impacts all aspects of environmental performance examined in this research. Consequently, it could reduce emissions, enhance innovative capabilities and improve the efficiency of organizational resource use.
This paper’s originality lies in examining realized absorptive capacity as a dynamic capability driving environmental performance, measured through emissions, innovation outcomes and resource efficiency. Distinctively, the findings challenge conventional assumptions by showing that both absorptive capacity and environmental performance are best captured through formative, not reflective, measurement models, highlighting that measurement approaches must adapt to contextual factors rather than assuming universal validity.
