The Architecture of Green Sustainability in Industrial Estates of Birjand: The Effects of Institutional Pressures and Employees’ Green Behavior with the Mediating Role of Green Innovation and the Moderating Role of Absorptive Capacity

Abstract

Introduction

In recent decades, the intensification of environmental crises, driven by industrial growth, excessive consumption of natural resources, and increased emissions, has elevated environmental sustainability to a central concern for policymakers, industrial managers, and researchers in the fields of management and development. Industrial organizations, as key actors in production and consumption chains, exert substantial pressure on ecosystems and, consequently, face increasing demands from regulatory bodies, markets, customers, and civil society to reform production patterns and adopt sustainable practices. Within this context, sustainability-oriented approaches, particularly green innovation, serve not only as mechanisms to comply with environmental regulations but also as sources of competitive advantage and organizational legitimacy. Drawing on institutional theory, organizations must align with coercive, normative, and mimetic pressures in their institutional environment to attain and maintain social legitimacy. Such pressures can direct organizational strategies toward the adoption of green practices and encourage investment in environmentally friendly innovations. Coercive pressures operate through environmental laws and standards, normative pressures through social and professional expectations, and mimetic pressures through benchmarking against leading organizations, collectively fostering similar behavioral patterns across industries. However, the effectiveness of these pressures strongly depends on the institutional context, the maturity of governance systems, and intra-organizational capabilities. Alongside external pressures, employees’ green behaviors are recognized as a crucial internal resource for achieving sustainability. These behaviors encompass voluntary, in-role actions aimed at reducing the negative environmental impacts of organizational activities, including energy conservation, waste reduction, participation in environmental programs, and support for organizational green policies. Green innovation acts as a pivotal mechanism that transforms institutional pressures and employees’ green behaviors into sustainable outcomes. It refers to the development of new or improved products, processes, and managerial practices aimed at reducing environmental harm while creating economic value. However, achieving green innovation requires that organizations possess sufficient absorptive capacity the ability to identify, assimilate, transform, and exploit external knowledge. Prior studies indicate that absorptive capacity can moderate the relationship between institutional pressures and green innovation, enabling organizations with stronger learning capabilities to convert environmental requirements into innovative opportunities. Despite the expansion of research in this area, gaps remain in understanding the simultaneous roles of institutional pressures, employees’ green behaviors, green innovation, and absorptive capacity, particularly within industrial firms in underdeveloped regions. The Birjand Industrial Town, due to its infrastructural limitations, environmental challenges, and increasing pressures from pollution and waste management, provides a suitable context to examine these relationships. Therefore, this study aims to investigate the effects of institutional pressures and employees’ green behaviors on environmental sustainability, considering the mediating role of green innovation and the moderating role of absorptive capacity in industrial firms located in Birjand Industrial Town.

Methodology

This study adopts an applied research design and employs a quantitative, descriptive–survey methodology. The analytical framework is based on structural equation modeling using the partial least squares approach (PLS-SEM) to simultaneously test causal relationships, mediating effects, and moderating effects. The statistical population comprised managers and experts from firms in Birjand Industrial Town, each with a minimum of five years of work experience and at least a bachelor’s degree. According to Hair et al. (2014) sample size criteria, and considering the number of questionnaire items, the appropriate sample size ranged between 195 and 395. Ultimately, 220 questionnaires were distributed, and 200 valid responses were collected. Data collection employed a researcher-developed questionnaire based on validated scales covering institutional pressures, green innovation, absorptive capacity, employees’ green behavior, and environmental sustainability. Responses were recorded using a five-point Likert scale. Reliability was confirmed via Cronbach’s alpha and composite reliability, while convergent and discriminant validity were assessed using AVE and Fornell–Larcker criteria. Data analysis was conducted using SmartPLS, examining path coefficients, t-values, R², predictive relevance (Q²), and the overall goodness-of-fit index (GOF) to evaluate the model.

Findings

Descriptive results indicated that the mean scores of all primary variables exceeded the mid-point of the Likert scale, reflecting a relatively favorable perception among respondents regarding institutional pressures, green innovation, absorptive capacity, and employees’ green behaviors. Among dimensions of institutional pressures, mimetic pressures from competitors scored the highest, highlighting the significant role of competitive dynamics in driving firms toward green initiatives. Structural model results revealed that institutional pressures positively and significantly influenced green innovation (β = 0.341, t = 6.103). Absorptive capacity also exhibited a positive and significant effect on green innovation, and its moderating role in the relationship between institutional pressures and green innovation was confirmed (β = 0.162, t = 2.748). Green innovation had a positive and relatively strong impact on environmental sustainability (β = 0.490, t = 6.878). Additionally, employees’ green behaviors directly and significantly influenced environmental sustainability (β = 0.298, t = 4.278). In terms of explanatory power, independent variables accounted for 40.2% of the variance in green innovation and 47% of the variance in environmental sustainability, indicating acceptable model fit. Positive Q² values further suggested adequate predictive relevance. The overall goodness-of-fit (GOF) was 0.493, within the range for strong fit. Collectively, all hypotheses were supported.

Discussion and Conclusion

The findings suggest that institutional pressures act as a key driver for increasing green innovation. Even in resource-constrained industrial contexts, institutional requirements can guide organizations to invest in green innovations, provided that organizational learning capabilities are strengthened. The confirmed moderating role of absorptive capacity suggests that institutional pressures alone do not guarantee green innovation. Organizations need to develop their capacity to absorb and exploit knowledge. Furthermore, the mediating role of green innovation in the relationship between institutional pressures and environmental sustainability suggests that the impact of environmental pressures is largely mediated through organizational innovation capabilities. These findings suggest that managerial policies, without taking into account employee attitudes and behaviors, are likely to have limited effectiveness. In summary, this study, by integrating institutional theory and a resource-based perspective, shows that environmental sustainability emerges from the dynamic interaction between external pressures and internal organizational capabilities. In practice, the results emphasize the importance of investing in developing absorptive capacity, institutionalizing green employee behaviors, and designing supportive policies for green innovation in regional industries. These insights provide a basis for industrial managers and local policymakers to enhance environmental performance and move towards sustainable development.