The Impact of Green Organizational Capabilities on Competitive Advantage of Construction Enterprises in Vietnam: The Mediating Role of Green Innovation

The escalating environmental pollution primarily caused by construction enterprises has raised concerns about the urgent need for sustainable practices. This study aims to establish a novel framework of Green Organizational Capabilities (GOC) for construction enterprises in Vietnam. Additionally, it addresses the research gap regarding the relationship between GOC and Competitive Advantage (CA) while also exploring the mediating effect of Green Innovation (GI). Employing Structural Equation Modeling (SEM), we simultaneously model and estimate the intricate relationships among GOC, GI, and CA, which are often unobservable and measured indirectly by the Likert scale point. Through SEM, we account for measurement errors in observed variables and test hypotheses from a sample of 278 valid respondents. The findings reveal that (1) Organizational capabilities are being transformed into GOC, encompassing three key capabilities: Operational Capabilities (OC), Green Dynamic Capabilities (GDC), and Green Creativity (GC); (2) Only GDC and GC have a positive impact on CA; and (3) There is a mediating role of GI on the relation between GC, GDC, and CA. These results highlight the significance of focusing on developing GDC and GC to bolster green innovation practices and achieve a competitive edge. Construction companies can leverage these insights to enhance their sustainability efforts and seize opportunities for growth in the green economy.