IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i5p2162-d1603969.html
   My bibliography  Save this article

Artificial Intelligence and Green Innovation in Small and Medium-Sized Enterprises and Competitive-Advantage Drive Toward Achieving Sustainable Development Goals

Author

Listed:
  • Panteha Farmanesh

    (Faculty of Communication, Arkin University of Creative Arts & Design, 99300 Kyrenia, Northern Cyprus, Turkey)

  • Niloofar Solati Dehkordi

    (Faculty of Communication, Arkin University of Creative Arts & Design, 99300 Kyrenia, Northern Cyprus, Turkey)

  • Asim Vehbi

    (Faculty of Communication, Arkin University of Creative Arts & Design, 99300 Kyrenia, Northern Cyprus, Turkey)

  • Kavita Chavali

    (Department of Finance and Economics, Dhofar University, Salalah P.O. Box 211, Oman)

Abstract

A significant portion of small and medium-sized enterprises (SMEs) are usually allocated to the construction sector, which plays a vital role in many economies. SMEs currently face serious concerns regarding the pursuit of sustainability. Limited financial resources (FRs) frequently prevent SMEs from implementing sustainable practices. Therefore, these enterprises should mitigate expenses to invest in environmentally friendly initiatives. Enhancing resources and developing ways to accelerate Turkish SMEs’ shift toward sustainability is vital. Moreover, adopting artificial intelligence (AI) and green innovation strategies (GISs) can boost sustainable competitive advantage (SCA) and lead them to success. This study utilized the natural resource-based view theory (NRBV), developed to compensate for the RBV’s shortcomings by incorporating the natural environment into the RBV’s framework. This study uses structural equation modeling (SEM) to examine the causal effect between the study variables based on the responses received from 228 executives within SMEs in Turkey’s construction sector. The findings of this study reveal that FRs significantly impact the SCA among SMEs, while GIS serves as a mediator in the relationship. Additionally, the moderating impact of AI adoption promotes sustainability development in this industry. This study is significant because it contributes to the body of knowledge regarding the relationship between the study’s constructs that align with Sustainable Development Goal 9 (Industry, Innovation, and Infrastructure), presented by the United Nations in 2015. This goal promotes robust infrastructure, encourages sustainable and inclusive industrialization, and stimulates innovation in the SME construction industry. Although these variables have been studied individually in previous studies, this study integrates them into a thorough framework that emphasizes the function of GIS as a mediator in the relationship between FRs and SCA, and the interaction effect of AI adoption. This study offers useful information to managers, stakeholders, politicians, and SME leaders, enabling them to make well-informed decisions about sustainable practices.

Suggested Citation

  • Panteha Farmanesh & Niloofar Solati Dehkordi & Asim Vehbi & Kavita Chavali, 2025. "Artificial Intelligence and Green Innovation in Small and Medium-Sized Enterprises and Competitive-Advantage Drive Toward Achieving Sustainable Development Goals," Sustainability, MDPI, vol. 17(5), pages 1-20, March.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:5:p:2162-:d:1603969
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/5/2162/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/5/2162/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Choonwoo Lee & Kyungmook Lee & Johannes M. Pennings, 2001. "Internal capabilities, external networks, and performance: a study on technology‐based ventures," Strategic Management Journal, Wiley Blackwell, vol. 22(6‐7), pages 615-640, June.
    2. Sebastian Krakowski & Johannes Luger & Sebastian Raisch, 2023. "Artificial intelligence and the changing sources of competitive advantage," Strategic Management Journal, Wiley Blackwell, vol. 44(6), pages 1425-1452, June.
    3. Rista Bintara & Winwin Yadiati & Muhammad Wahyudin Zarkasyi & Nanny Dewi Tanzil, 2023. "Management of Green Competitive Advantage: A Systematic Literature Review and Research Agenda," Economies, MDPI, vol. 11(2), pages 1-21, February.
    4. Xiue Zhang & Qiao Meng & Yuan Le, 2022. "How Do New Ventures Implementing Green Innovation Strategy Achieve Performance Growth?," Sustainability, MDPI, vol. 14(4), pages 1-16, February.
    5. Muhammad Zafar Yaqub & Abdullah Alsabban, 2023. "Industry-4.0-Enabled Digital Transformation: Prospects, Instruments, Challenges, and Implications for Business Strategies," Sustainability, MDPI, vol. 15(11), pages 1-33, May.
    6. Saeed Badghish & Yasir Ali Soomro, 2024. "Artificial Intelligence Adoption by SMEs to Achieve Sustainable Business Performance: Application of Technology–Organization–Environment Framework," Sustainability, MDPI, vol. 16(5), pages 1-24, February.
    7. Jianmu Ye & KMMCB Kulathunga, 2019. "How Does Financial Literacy Promote Sustainability in SMEs? A Developing Country Perspective," Sustainability, MDPI, vol. 11(10), pages 1-21, May.
    8. Yu-Shan Chen & Shyh-Bao Lai & Chao-Tung Wen, 2006. "The Influence of Green Innovation Performance on Corporate Advantage in Taiwan," Journal of Business Ethics, Springer, vol. 67(4), pages 331-339, September.
    9. Williams Kwasi Peprah & Mensah Morris Ayaa, 2022. "The Convergence of Financial Decision, Business Strategy Through Organisational Competitiveness to Sustainable Competitive Advantage: A Conceptual Analysis," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(2), pages 1-87, February.
    10. Tomaž Cater & Barbara Cater, 2009. "(In)tangible resources as antecedents of a company’s competitive advantage and performance," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 14(2), pages 186-209.
    11. Dongwei Li & Jing Xiao & Fangfang Yang, 2024. "Artificial Intelligence and Enterprise Green Innovation: Intrinsic Mechanisms and Heterogeneous Effects," Sustainability, MDPI, vol. 16(21), pages 1-18, October.
    12. Jill Kickul & Lisa Gundry, 2002. "Prospecting for Strategic Advantage: The Proactive Entrepreneurial Personality and Small Firm Innovation," Journal of Small Business Management, Taylor & Francis Journals, vol. 40(2), pages 85-97, April.
    13. Demetris Vrontis & Ranjan Chaudhuri & Sheshadri Chatterjee, 2022. "Adoption of Digital Technologies by SMEs for Sustainability and Value Creation: Moderating Role of Entrepreneurial Orientation," Sustainability, MDPI, vol. 14(13), pages 1-19, June.
    14. Panteha Farmanesh & Alla Mostepaniuk & Parisa Gharibi Khoshkar & Riham Alhamdan, 2023. "Fostering Employees’ Job Performance through Sustainable Human Resources Management and Trust in Leaders—A Mediation Analysis," Sustainability, MDPI, vol. 15(19), pages 1-16, September.
    15. Tomaž Cater & Barbara Cater, 2009. "(In)tangible resources as antecedents of a company’s competitive advantage and performance," Journal of East European Management Studies, Rainer Hampp Verlag, vol. 14(2), pages 186-209.
    16. Jian Xue & Zeeshan Rasool & Aqsa Gillani & Ahmad Imran Khan, 2020. "The Impact of Project Manager Soft Competences on Project Sustainability," Sustainability, MDPI, vol. 12(16), pages 1-18, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Raquel Ortega-Lapiedra & Miguel Marco-Fondevila & Sabina Scarpellini & Fernando Llena-Macarulla, 2019. "Measurement of the Human Capital Applied to the Business Eco-Innovation," Sustainability, MDPI, vol. 11(12), pages 1-16, June.
    2. Taewoo Roh & Shufeng Simon Xiao & Byung Il Park, 2023. "Effects of open innovation on eco-innovation in meta-organizations: evidence from Korean SMEs," Asian Business & Management, Palgrave Macmillan, vol. 22(5), pages 2004-2028, November.
    3. Na Wang & Shan Jin Zhang & Wei Wang, 2022. "Impact of Environmental Innovation Strategy on Green Competitiveness: Evidence from China," IJERPH, MDPI, vol. 19(10), pages 1-17, May.
    4. Tajudeen Lawal & Daniya Adeiza Abdulazeez & Mohammed Yabagi Ibrahim, 2019. "Human Capital Efficiency And Profitability Of Quoted Integrated Oil And Gas Companies In Nigeria," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    5. Snezhana Hristova & Dusica Stevceska-Srbinovska, 2019. "MANAGING TECHNOLOGY IN MACEDONIAN SMEs CONTEXT: PERCEPTIONS, PRACTICES AND CHALLENGES," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    6. Hassane Gharbi & Abu Elnasr E. Sobaih & Nadir Aliane & Ayth Almubarak, 2022. "The Role of Innovation Capacities in the Relationship between Green Human Resource Management and Competitive Advantage in the Saudi Food Industry: Does Gender of Entrepreneurs Really Matter?," Agriculture, MDPI, vol. 12(6), pages 1-17, June.
    7. Eva Erjavec, 2023. "Going digital and intangible: intangible investments effects on a company’s success," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 3, pages 275-294.
    8. Luis Mendoza-Ramirez & Arcelia Toledo-Lopez & Patricia Arieta-Melgarejo, 2016. "The Response Of Small Businesses Facing Nature Crisis: The Human Capital In The Strategic Orientationperformnace Relationship, Desempeno, Capital Humano Y Desastres Naturales: Estrategias Para El Sect," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 9(3), pages 29-41.
    9. M. à ngeles López-Cabarcos & Sérgio Göttling-Oliveira-Monteiro & Paula Vázquez-Rodríguez, 2015. "Organizational Capabilities and Profitability," SAGE Open, , vol. 5(4), pages 21582440156, November.
    10. Papadas, Karolos-Konstantinos & Avlonitis, George J. & Carrigan, Marylyn & Piha, Lamprini, 2019. "The interplay of strategic and internal green marketing orientation on competitive advantage," Journal of Business Research, Elsevier, vol. 104(C), pages 632-643.
    11. Erika Kulcsar & Claudia-Izabela Crenganes, 2019. "The End Product Of The Imagine Dragons’ And Lady Gaga’S Music, Or The Nature Of Marketing Mix In The Music Industry," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    12. Mohamed Hamdoun & Mahmoud Zouaoui, 2017. "Impact of Environmental Management on Competitive Advantage of Tunisian Companies: The Mediator Role of Organizational Culture," International Review of Management and Marketing, Econjournals, vol. 7(2), pages 76-82.
    13. Derya Ozilhan Ozbey & Gul Coskun Degirmen & Osman Nurullah Berk & Emine Sardagi & Emel Celep & Durmus Koc & Ebru Gozen, 2024. "Green Core Competencies, Green Process Innovation, and Firm Performance: The Moderating Role of Sustainability Consciousness, a Mixed Method Study on Golf Hotels," Sustainability, MDPI, vol. 16(10), pages 1-27, May.
    14. Lassaad Ghachem & Costinel Dobre & Reza Etemad-Sajadi & Anca Milovan-Ciuta, 2019. "The Impact Of Cultural Dimensions On The Perceived Risk Of Online Shopping," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    15. Chin‐jung Luan & Chengli Tien & Pei‐hua Wu, 2013. "Strategizing Environmental Policy and Compliance for Firm Economic Sustainability: Evidence from Taiwanese Electronics Firms," Business Strategy and the Environment, Wiley Blackwell, vol. 22(8), pages 517-546, December.
    16. Aparna Sundar & James J. Kellaris, 2017. "How Logo Colors Influence Shoppers’ Judgments of Retailer Ethicality: The Mediating Role of Perceived Eco-Friendliness," Journal of Business Ethics, Springer, vol. 146(3), pages 685-701, December.
    17. Vitaliy Roud & Thomas Wolfgang Thurner, 2018. "The Influence of State‐Ownership on Eco‐Innovations in Russian Manufacturing Firms," Journal of Industrial Ecology, Yale University, vol. 22(5), pages 1213-1227, October.
    18. Robertson, Jeandri & Ferreira, Caitlin & Botha, Elsamari & Oosthuizen, Kim, 2024. "Game changers: A generative AI prompt protocol to enhance human-AI knowledge co-construction," Business Horizons, Elsevier, vol. 67(5), pages 499-510.
    19. Yuanyuan Lou & Ahreum Hong & Yannan Li, 2024. "Assessing the Role of HRM and HRD in Enhancing Sustainable Job Performance and Innovative Work Behaviors through Digital Transformation in ICT Companies," Sustainability, MDPI, vol. 16(12), pages 1-18, June.
    20. Jinqiu He & Huiwen Su, 2022. "Digital Transformation and Green Innovation of Chinese Firms: The Moderating Role of Regulatory Pressure and International Opportunities," IJERPH, MDPI, vol. 19(20), pages 1-21, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:5:p:2162-:d:1603969. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.