GREEN INTELLECTUAL CAPITAL, GREEN INNOVATION AND SUSTAINABLE PERFORMANCE OF SMES IN MALAYSIA

Abstract

Small and Medium Enterprises (SMEs) are the backbone of Malaysia’s economy, contributing significantly to GDP, employment, and exports. However, these firms face persistent challenges in adopting sustainable practices due to financial constraints, technological gaps, and limited awareness of environmental initiatives. With increasing global demand for sustainable business models, Malaysian SMEs must leverage intangible resources and innovation to remain competitive. This study investigates the influence of Green Intellectual Capital (GIC) and Green Innovation (GI) on the sustainable performance of Malaysian manufacturing SMEs. Grounded in sustainability and innovation management theories, the research develops a conceptual framework that integrates GIC—comprising green human, structural, and relational capital—with GI as key drivers of economic, environmental, and social performance. A quantitative approach was employed, collecting data from 325 SMEs using structured questionnaires and analyzing the results through SPSS. The study revealed empirical insights into how GIC and GI enhance sustainable performance, offering theoretical contributions to sustainability literature in the SME context and practical implications for policymakers and managers. Findings guide targeted policies, capacity-building programs, and green innovation strategies, thereby supporting Malaysia’s broader goals of achieving carbon neutrality by 2050 and aligning with the United Nations Sustainable Development Goals.