Promoting sustainable development: Multiple mediation effects of green value co‐creation and green dynamic capability between green market pressure and firm performance

Abstract The need for organizations to safeguard and advance environmental sustainability has recently become imperative due to mounting pressures from various stakeholder groups. However, a significant research gap remains regarding how these pressures influence enterprises' green practices and performance. The aim of this study is to examine the impact of green market pressure exerted by customers and competitors on firm performance, taking into account the multiple mediating effects of green value co‐creation and green dynamic capability. Questionnaire survey data collected from 274 high‐tech manufacturing companies in the Yangtze River Delta of China were used to test the proposed relationships. By testing the mediation effects based on stakeholder theory and dynamic capability view, the results show that green market pressure positively affects firm performance, while both green value co‐creation and green dynamic capability play as an individual mediator between green market pressure and firm performance. Moreover, green value co‐creation and green dynamic capability sequentially mediate the link between green market pressure and firm performance. These findings provide valuable suggestions for improving firm performance under the background of environmental protection.