Assessing the sustainable development of firms: The moderating role of transformational leadership and firm size

Abstract Due to escalating environmental problems and challenges, ensuring sustainable development (SD) has become a matter of concern for organizations worldwide at a precinct scale. This study aims to integrate the variables, which are antecedents of SD through direct and indirect paths. The managers as participants of small‐ and medium‐sized enterprises have helped the researchers to explore the role of green knowledge management (GKM) and green dynamic capacity with the intervention of green innovation and competitive advantage in achieving SD. The results achieved through structural equation modeling revealed positive and significant direct and indirect relationships, however, the intervening role of green innovation and green competitive advantage between GKM and SD show insignificant results. Interestingly, we have also identified two significant moderators as a part of this study: large firm size and transformational leadership. This research has important implications and significant contributions to theory and practice. It can be considered innovative by using a range of antecedents in an integrated way, proposing and testing a theoretical model of SD in a developing country Pakistan, which is affirmed and committed to achieving SDGs by the year 2030.