Green dynamic capabilities and performance of hospitality firms in selected municipalities in Limpopo and Gauteng Provinces, South Africa : a moderated mediated model

Abstract

Tourism, including the hospitality industry, plays a significant role in creating jobs, eradicating poverty and preserving natural resources to enhance South Africa’s economic growth. However, despite the positive contributions of tourism and the hospitality sector, the industry faces several environmental challenges. Businesses in this industry that intend to improve on their environmental performance need to introduce, modify, and implement various capabilities to survive in the changing environmental situations. The study developed and tested a new theoretical model linking Green Dynamic Capabilites (GDC) to a multi-dimensional measure of firm performance and the underlying mechanisms that support the relationship. The study aimed at establishing whether GDCs affect sustainable performance (financial, social and environmental performance) and green competitive advantage. The study also tested the mediation role of green innovation, measured by green product innovation and green process innovation in the relationship between GDC and performance. The moderation role of green self-efficacy (GSE) and environmental concern were also tested. The study was guided by the Stakeholder theory, the Legitimacy theory, the Resource-based view, the Natural resource-based view, and the Dynamic capabilities framework. Grounded in the deductive research approach and non-experimental design, the study adopted a quantitative approach to evaluate the proposed model. Self-administered questionnaires were distributed electronically for data collection. The population of the study included owners, managers, and chief executive officers of hospitality firms in Gauteng and Limpopo, South Africa. This study used structural equation modelling to test the hypotheses and specifically, the Partial Least Square Structural Equation Modelling (PLS SEM) was utilised. The findings showed that there is a significant positive relationship between GDC and the four measures of firm performance. The mediation role of green innovation is significant. This indicates that for firms to achieve financial, social, environmental performance and green competitive advantage, green product innovation and green process innovations must be considered. The mediation effect of green self-efficacy and environmental concern are significant. The results showed that green innovation, green self-efficacy and environmental concern are mechanisms through which GDC can affect firm performance. The study concluded that hospitality firms should consider v the importance of generating, assimilating, and implementing green resources and green knowledge and information to develop green innovation products and green innovation processes toward achieving sustainable performance. Recommendations were made to various stakeholders, including government, managers, and organisations. The study recommends that government must improve its currently lax environmental policies, reduce red tape, and streamline regulations to provide firms with clear environmental guidelines and instructions. Regarding the duties of the private sector, businesses should hold educational and training programmes on a regular basis to improve staff and management's understanding of environmental problems and their ability to engage in responsible ecological behaviour. The significant contribution of the study is the development of a new theoretical model that links GDC to sustainable performance and green competitive advantage.