GREEN HUMAN CAPITAL DEVELOPMENT AND ORGANIZATIONAL OUTCOMESIN THE GREEN ECONOMY: THE MEDIATING ROLE OF ABSORPTIVE CAPACITYIN INNOVATION PERFORMANCE AND SUSTAINABLE PERFORMANCE

Abstract

This study examines the role of Absorptive Capacity in mediating the relationship between Green Human Capital Development and two organizational outcomes: Innovation Performance and Sustainable Performance. Although organizations increasingly invest in green-oriented training, capacity building, and employee development, such initiatives do not automatically lead to improved organizational outcomes unless the acquired knowledge is effectively absorbed, transformed, and applied. Drawing on a knowledge-based perspective, this study proposes that Absorptive Capacity serves as a key mechanism that converts green-oriented human capital into innovation and sustainability outcomes. A quantitative explanatory design was employed using survey data collected from 380 workers in organizations that had implemented human resource development, innovation programs, sustainability initiatives, or environmentally oriented practices. The data were analyzed using Partial Least Squares Structural Equation Modeling with SmartPLS 4. The findings show that Green Human Capital Development has a positive effect on Absorptive Capacity. Absorptive Capacity also has positive effects on both Innovation Performance and Sustainable Performance. Furthermore, the indirect effect analysis confirms that Absorptive Capacity mediates the relationship between Green Human Capital Development and the two organizational outcomes. These results support the full mediation logic of the study, indicating that green-oriented human capital development contributes to organizational outcomes through knowledge conversion capability. This study contributes to the sustainability-oriented human resource management literature by clarifying how employee development supports innovation and sustainability in the green economy. Practically, the findings suggest that organizations should combine green training with knowledge-sharing systems, learning routines, and managerial support to strengthen innovation and sustainable performance.