Heliyon 9 (2023) e21830

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Heliyon
journal homepage: www.cell.com/heliyon

Green human resource management practices to accomplish green

competitive advantage: A moderated mediation model
Khurram Mustafa a, Md Billal Hossain b, Farooq Ahmad c, *, Faisal Ejaz d,
Hafiz Ghufran Ali Khan e, Anna Dunay f
a
MS Scholar in Management, Faculty of Management Sciences, University of Okara, Okara, Pakistan
b
Business Management and Marketing Department, School of Business and Economics, Westminster International University in Tashkent (WIUT),
Tashkent 100047, Uzbekistan
c
Department of Business Administration, Fatima Jinnah Women University, Rawalpindi, Pakistan
d
School of International Relations, Minhaj University, Lahore, Pakistan
e
Faculty of Management Sciences, International Islamic University, Islamabad, Pakistan
f
John von Neumann University, Doctoral School of Management and Business Administration, 1117 Budapest, 6000 Kecskemét, Hungary

A R T I C L E I N F O A B S T R A C T

Keywords: In present high-tech era, firms need to possess a variety of capabilities and resources to attain and
Green human resource management practices sustain a competitive position in the market. The motivation for this study was to understand
Green knowledge sharing green competitive advantage through the application of Ability-Motivation-Opportunity theory
Green innovation
and Natural-Resource-Based view. In a time-lagging longitudinal online survey related to small-
Green competitive advantage
Green human capital
and-medium-sized manufacturing enterprises, 223 professionals provided data according to their
opinions. The structural and measurement model were designed for analyses. The results sup­
ported the model and verify the Green human resource management practices’ influence on green
competitive advantage, with partial mediation of green knowledge sharing and green innovation
(green product innovation and green process innovation). The analyses revealed the positive
highly significant moderation of green human capital, which is the novelty of the study. Green
human capital is important to develop sustainable workforce who act as catalyst in achieving
sustainable development goals. The report offers practical advice for small-medium
manufacturing enterprises (SMMEs) aiming to attain a green competitive advantage. With the
help of a green competitive advantage, the recommendations in this study can benefit SMMEs to
develop a green human capital and to create innovative knowledge. As a result, it is a futuristic
approach to dealing with the improved environmental conditions and developed a green human
capital in this industrialized age.

1. Introduction

Sustainability is the millennial strategic goal of the modern global organizations [1,2]. The Sustainable Development Goals and
targets are unified and indivisible, worldwide in scope and all around relevant, thinking about different nations’ real factors, limits,
and levels of advancement, as well as public approaches and destinations [3]. The impact of green aspects of firms shows up more

* Corresponding author
E-mail addresses: khurram.mj99@gmail.com (K. Mustafa), mbhossain@wiut.uz (M.B. Hossain), faroqahmad@gmail.com (F. Ahmad),
faisalejaz8661@gmail.com (F. Ejaz), hafiz.ghufran@iiu.edu.pk (H.G.A. Khan), dunay.anna@uni-neumann.hu (A. Dunay).

https://doi.org/10.1016/j.heliyon.2023.e21830
Received 12 March 2023; Received in revised form 26 October 2023; Accepted 30 October 2023
Available online 31 October 2023
2405-8440/© 2023 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license
(http://creativecommons.org/licenses/by/4.0/).
K. Mustafa et al. Heliyon 9 (2023) e21830

straightforward and notable [4], furthermore naturally horrendous cases, for example, air or water contamination and atomic power
mishaps have reignited worries about the adverse consequences of industrialization. Hence, environmental management is a tool for
long-term sustainability, particularly for SMMEs [5]. This study concentrated on Pakistan’s Punjab province SMMEs, which are the
industry’s backbone.
Strategically oriented Human Resource Management (HRM) can help a business achieve its goals for corporate social responsibility
[6]. The growth of this function has prompted related business initiatives and research, labeled Green HRM practices. Since the last
decade, this field has grown rapidly [6]. This terminology was created because management realized that inefficient use of resources
by human resources was contributing to organizational impact on the environment [7] as well as the triple bottom-line [8]. SMMEs in
Pakistan has the ability to enable environmental improvements, benefit green employee behavior, and a positive green image in the
market [9–12].
Green HRM practices include green recruitment and selection, green performance management, green training and development,
green employee involvements, and green pay and rewards [13]. Because high involvement of management leads to corporate prof­
itability as well as employee’s need satisfaction at workplace [14]. This behavior leads to an opportunity like green knowledge sharing
(GKS) [15,16]. Hence, there is a gap existed in the literature that how these Green HRM practices impact GKS, if skilled labor in the
form of green human capital (GHC) has already strong impact on the organization to get sustainable performance [17]. Therefore, this
study answered this question by using quantitative approach to generate fresh literature and to highlight the novelty of GHC in this
relationship. Because, the role of green growth in reducing carbon dioxide (CO2) emissions has been empirically and theoretically
examined in the previous literature, particularly when GHC is considered a crucial factor in a sustainable environment [18].
To get a green competitive advantage (GCA) in environmentally-friendly products, organizations should yield products that have
both greenness and breakthrough features, according to this study. This segment of GCA is based on natural-resource-based view
(NRBV) framework. Furthermore, there is a gap exists in the literature that how green process innovation (GPSI) is providing capa­
bilities to the organization in order to achieve GCA [17,19]. This study provides knowledge to fill the gap as well as throws light on its
mediator role with GKS [20], in the context of SMMEs in the Punjab province of Pakistan. The following research questions must be
addressed in further detail for business perspective.

• In achieving the GCA, what are the organizational consequences regarding motivations of Green HRM practices?
• How did Green HRM practices motivate employees to gain opportunity like GKS, which resulted to green innovation (GI) and
ultimately helped the organization to realize a GCA?
• How much moderation of GHC is present in the connection of GKS and Green HRM practices?
• What level of GKS and GI mediates the relationship of Green HRM practices and GCA?

The background and hypotheses statements about the variables are elaborated in the upcoming section. Furthermore, the meth­
odology section identifies the sampling approaches to collect the data from the SMMEs. Then, results and analysis presents the validity
and reliability of measures and study results computed by using various software packages. After all, the discussion section explains the
contributions of the study as well as the future research directions.

Fig. 1. Theoretical model.

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2. Theoretical background and hypotheses development

2.1. Theoretical underpinning

The theoretical framework for this study is shown in Fig. 1. The first chunk of the theoretical model used ability-motivation-
opportunity (AMO) theory. It explains the Green HRM practices in the most dominant fashion and identifies as high performance
work practices [21,22]. Hence, these practices are based on three main aspects named ability, motivation and opportunity [21].
Firstly, ability practices explain about the require knowledge and skills to perform tasks. This study named GHC as the ability practices.
Secondly, motivation practices provide financial and non-financial incentives to the employees in order to enhance the efforts of to
achieve the assigned targets [23]. Although, incentives are the portion of Green HRM practices therefore, this study has chosen it as the
motivation aspect of the theory. At last, opportunity practices enhance employee participation by providing more autonomy to the
employees such as GKS and involvement [24]. This study selected GKS as opportunity practices. Therefore, AMO theory explains
variables like GHC as ability practices, Green HRM practices as motivation practices and GKS as opportunity practices in the theoretical
model of this study.
The second fragment of the research model is NRBV. Based on the capabilities that support environment-friendly economic ac­
tivities, it is a cutting-edge strategy and competitive advantage [7]. This theory uses three types of capabilities that provide a way out
to gain GCA i.e., pollution prevention, product stewardship and sustainable development. Firstly, pollution prevention reduces,
changes or prevented from the emissions and effluents through continuous improvement mindset, material substitution, recycling or
process innovation to protect the environment [7]. This study used GPSI as variable in the framework from the pollution prevention
capability.
Secondly, product stewardship is the capability that minimize the life-cycle costs from the design or development process of the
product through stakeholder integration in order to preempt competitors [7]. This is also termed as product innovation and lead to the
GCA. This study used green product innovation (GPTI) as variable from product stewardship capability. Whereas, the sustainable
development capability minimizes the environmental burden of organizational growth and development from the economic activities.

2.2. Study variables

2.2.1. Green HRM practices

It is a term described as those aspects of sustainable HRM that deal with environmental sustainability concerns [25]. Similarly,
these are the activities that positively affect the environmental consequences [26]. Moreover, Green HRM practices consider green
behaviors in performance appraisals, rewards, compensation and promotion to motivate employees about environment-friendly ac­
tivities [27]. Therefore, this study designated Green HRM practices as independent variable and motivation factor according to AMO
theory. Furthermore, these practices may be improved by providing green training and development to the employees or by setting
green goals for employees. Hence, Green HRM practices are the green management aspects of HRM [27,28].

2.2.2. Green knowledge sharing

A process in which employees share environment-friendly implicit and explicit information to produce new knowledge is called
GKS within a firm [29]. For example, collaborating with colleagues to share environmental knowledge and skills that are advantageous
to the employees and organization [30]. The fact that implicit knowledge exists in the human brain makes it challenging to codify.
Contrarily, explicit knowledge is easily demonstrated because it is recorded in formal, official documents [16,31]. Furthermore, AMO
theory along with this study considers GKS as mediating variable and opportunity factor in order autonomize the employee partici­
pation towards green goals [23]. Moreover, it is less focused by researchers that effect the organization [15,16]. Therefore, by
advancing this idea, this study focused on this gap in the literature.

2.2.3. Green product innovation

As segment of product stewardship, it aims to modify or adapt product designs to lessen their negative effects on the environment
[32]. Furthermore, it includes This type of innovation is used as a weapon to attain GCA in the market. Such as, organization may
choose the raw material that produces less pollution and removal of hazardous substances from the product [33,34]. Moreover, it is
also the portion of NRBV’s product stewardship capability which provide organizations the first mover advantage [7]. Hence, this
study used it as mediator and predictor of GCA.

2.2.4. Green process innovation

It reduces the emissions, effluents or waste or makes it a valuable resource during the production process [7,34]. For example,
lowering energy and resource use, cutting back on water use, increasing resource efficiency, and switching to bioenergy from fossil
fuels [33]. Therefore, GPSI helps organization to take GCA in the form of cost efficiency and profitability [35]. Furthermore, NRBV
consider it as the capability of pollution prevention from the environment [7] and this study consider it as mediator and predictor of
GCA.

2.2.5. Green competitive advantage

It is a situation in which competitors could not copy a certain position of an organization regarding environment protection or GI
[36]. Such as, it may in the form of low cost about GI, better quality or profitability of green products or services, capability of research

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and development about environmental protection, managerial capabilities and first mover advantage [36]. According to NRBV, or­
ganization gets sustainable benefits from these strategies in the form of creating new markets and improving green organizational
image [7,37–39]. This concept has very limited knowledge available in the literature. Therefore, this study highlighted its importance
and used it as dependent variable in the framework.

2.2.6. Green human capital

Employees knowledge, skills, experience, innovation, wisdom, attitude, commitments and creativities in the aggregation, to adopt
environmental protection policies and procedures, is known as GHC [40–42]. Examples include competencies, contributions and
productivity, green product or service quality, team work cooperation and management support in order to achieve environmental
protection goals [40]. Moreover, it has noteworthy in adapting Green HRM practices and is the individualistic ability in the organi­
zational science [43,44]. Hence, this study contemplates GHC as ability factor according to AMO theory and reflects as moderating
variable in the theoretical framework.

2.3. Hypothesis development

2.3.1. Green HRM practices and green competitive advantage

The most prevalent notion is the AMO theory in understanding the impact of Green HRM practices in the form of high-performance
work practices on organizational performance like a GCA in empirical studies [21,22]. The methods which guarantees that workers
have the knowledge and skills required to do certain activities. Such as recruitment and selection with the training and development
programs, create the foundation of how successfully people are able to accomplish their jobs. Similar to this, motivation is based on
procedures like performance appraisals with monetary and non-monetary rewards that are intended to motivate workers to put in
more effort in order to fulfill performance objectives. This will help the organizations to move strategically as well as employee
well-being may be considered [45]. Finally, opportunity is a combination of behaviors that combines participation, knowledge
sharing, and actions that boost autonomy to encourage employee participation in activities [24]. Hence, Green HRM practices are
based on AMO theory because these practices are identified as high-performance work practices.
According to NRBV, a sustained competitive advantage may be achieved through pollution prevention, sustainable development
and product stewardship [7]. Whereas, sustainable development is the process for shared vision of a firm-specific resource, which is
rare in terms of competitors. All of three processes adopted by a firm may help them to achieve GCA. Therefore, the two frameworks
have collaborated in this study i.e. AMO framework and NRBV framework. Green competitive advantage needs employee involvement
for pollution prevention and further sustainable developments. The employee involvement is the product of Green HRM practices
which may be achieved through compensation and rewards on performances. As a result, Green HRM practices from AMO framework
is combined to achieve the GCA from NRBV framework, which is a desired outcome for a firm. Hence, this discussion concludes that.
H1. Green HRM practices positively influence the organization’s GCA.

2.3.2. Green HRM practices and green knowledge sharing

In the pro-environmental agenda, self-perceptions in the form of skill, inspiration, prospect and knowledge is necessary to practice
green behaviors when AMO framework taking into play [46]. Therefore, a relationship exists between Green HRM practices and GKS in
the AMO framework. For businesses to retain a long-term competitive advantage, knowledge and knowledge dissemination are
deemed critical [47]. The strong impact of GKS also leads to employee environmental commitment in order to improve environmental
performance [48,49]. Through successful development strategies, relational connections, criticism, support, and creating information
stocks, Green HRM practices advance towards information transfer and creation as well as individual learning among employees [50].
Accordingly, this exploration trusts that assuming employees have an ideal demeanor toward Green HRM practices; they will be bound
to share eco-friendly information. Therefore.
H2. Green HRM practices positively influence the organization’s GKS.

2.3.3. Green knowledge sharing and green innovation

Knowledge absorbing firms create the tentative outcomes available; as a result other organizations may utilize the information for
creative reasons, promoting collective innovation, in order to achieve a win-win culture for all [51]. Therefore, organizations need
innovative and unique knowledge to create environment-friendly products in order to fulfill customer and stakeholder demands [34,
52]. Since successful innovations are closely related to the wider spectrum of knowledge sources, previous literature suggests that
organizations should look more broadly for superior research and development results [53,54]. Furthermore, GPTI is a way to reduce
the environmental consequences of disposal with enhancing energy efficiency by employing nontoxic chemicals or biodegradable
materials throughout the manufacturing process [32]. Hence, life-cycle analysis provides an overall picture to reduce the environ­
mental burden by this system from cradle to grave [7]. Consequently, this study draws a statement that GKS provides an opportunity to
the organization in order to develop green products innovation. This will evaluate the relationship between the GPTI from NRBV
framework and GKS from AMO framework. So.
H3a. GKS positively influences the organization’s GPTI.
Green process innovation makes improvement in the production procedures with the aim to reduce the waste, capitalization of
renewable resources and cut the resource consumption [55,56]. Social networking, meetings and collaborations provide ways of

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learning and knowledge sharing which improves organizational operation and finally organizational objectives [57,58]. Similarly
according to NRBV framework, pollution prevention minimizes the emission and effluents by using better material substitution,
recycling and GPSI [7]. This process removes pollution from the saleable goods of the organization. Therefore, Green HRM practices in
AMO framework provides green compensations and rewards to promote GKS as an opportunity. The open innovation mindset of
employees consists of beliefs, values and attitudes which captures the employee openness towards knowledge sharing and sourcing
within or outside the firm borders [59]. Hence, this study links GKS and GPSI to join the AMO framework with NRBV framework.
Therefore.
H3b. GKS positively influences the organization’s GPSI.

2.3.4. Green innovation dimensions and green competitive advantage

Product stewardship includes the voice of environment into the product design or development processes, according to NRBV
framework [7]. Product life-cycle analysis includes the minimization of nonrenewable materials, removal the usage of toxic materials
and renewable materials according to their replenishment [60]. Therefore, these green products may help to capture the GCA by
competitive preemption [61]. Moreover, two means may help to achieve this GCA. These are limited resources like raw production
capacity, raw materials or customers are important to gain as preferred access, and by establishing uniquely tailored standards, rules,
regulations to the organization’s capability [62]. For example, BMW has gained an early reputation of recycling and taking back its
products. This preemption was called design for environment (DfE) automobiles [7] which leads to a GCA. Therefore.
H4a. GPTI positively influences the organization’s GCA.
Green process innovation rallies the operational performance of the organization in the form of productivity, improved efficiency
and reduced waste disposal costs [63,64]. Such as, Toxic release inventory (TRI) has restricted to organizations to manage their
emissions to 300 hazardous chemicals or toxics [7]. Thus, these technological capabilities play an important role in sustained
competitive advantage and enhancing innovation [64,65]. So, in order to achieve the desired performance outcomes, the development
of new technologies is required by GPSI [66].
According to NRBV, organizations have understood now that pollution rose with inefficient use of materials and human resources.
Therefore, they move towards the concept of continuous improvement of total quality environmental management [7]. This process
required a better material substitution, housekeeping or recycling which is named as GPSI [67]. Moreover, organizations may achieve
significant savings in the form of cost advantage relative to competitors, considers as GCA [68]. Hence.
H4b. GPSI positively influences the organization’s GCA.

2.3.5. Mediation of green knowledge sharing and green innovation dimensions

According to some studies [69–71], the process of developing GI is openly backed by the influence of GKS during production. AMO
theory also confirms this concept as Green HRM practices have the opportunity in the form of GKS for organizations [23]. This study
will examine that how GKS mediates the relationship between Green HRM practices and GPTI. This research will also exhibit the
mediating role of GKS in the relationship of Green HRM practices and GPSI. Therefore.
H5a. GKS positively mediates the link between Green HRM practices and the organization’s GPTI.
H5b. GKS positively mediates the link between Green HRM practices and the organization’s GPSI.
Innovation will result from the constant collection and integration of new knowledge [72]. Moreover, the unseen accumulation of
experience as well as evident and visible knowledge, contribute to the creativity required for innovation [73]. Hence, product is
improved according to environment. Therefore, this process will preempt the organization as compared to competitors. This pre­
emption actually leads to GCA for the organization. Hence.
H6a. Organization’s GPTI positively mediates the link between GKS and the organization’s GCA.
Organizations must actively seek out, create, transform, and apply knowledge in order to develop unique ideas and knowledge with
the help of GPSI [64]. Therefore, these organizational strategic and sustainable capabilities improve the operational performance [63].
As a result, this study develops the statement that improvement in operational performance may lead towards GCA. Hence.
H6b. Organization’s GPSI positively mediates the link between GKS and the organization’s GCA.

2.3.6. Moderation of green human capital

Employees are now seen as one of the most significant intangible asset and environmental novel build is the name given to expertise
as ‘GHC’ [41,42,74]. Therefore, it falls in the ability category of AMO theory, according to this study. If a well-developed and
well-equipped workforce is already available in the organization then this workforce may support better towards newly recruited
employees for environmental synergy [75]. This will only happen when they collaborate and disseminate knowledge with one another
properly. Though, this study used GHC as moderator role in the framework. Therefore.
H7. GHC moderates the relationship between Green HRM practices and GKS such that, at high levels of GHC, this relationship
becomes more robust.

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3. Methodology

3.1. Data collection and sample

Small and Medium Enterprises Development Authority (SMEDA) is an independent government agency under the Ministry of
Industries and Production in Pakistan. The study selected business level as the unit of analysis. Thus, the study’s scope is confined to
400 SMMEs in Punjab province of Pakistan [76]. Organizations having employees 250 or less are known as SMMEs in Pakistan [77]. So
that, the study may able to maximize the variation across numerous work contexts by gathering data from a range of SMMEs.
Furthermore, it is necessary for SMMEs to adopt sustainable development in order to achieve GCA [36].
Cross-sectional data collecting has been recognized by researchers as a design flaw and longitudinal designs or time-lagged have
been suggested as a solution [78–80]. In this study, a three point time-lagged design was used to collect data of different variables at
different time periods. At time 1 (T1), information on Green HRM practices and GHC was gathered. Three months later, at time 2 (T2),
data on GKS, GPTI and GPSI were gathered using an online poll. At time 3 (T3), information on GCA was gathered (2 weeks after time
2) [81].
This empirical study adopted simple random sampling technique to collect data. Organizations were picked on the basis of
environmental awareness [82] and governed by government rules [83]. Online questionnaire approach was adopted in this study to
collect data with the help of WhatsApp and email applications [84–86]. This approach discovered a total of 223 professional responses,
grounded on the quantity of employees. Additional investigation confirmed their names, cellphone numbers, email addresses and job
titles [36].
The study received 247 responses at T1 out of the 400 questionnaires that were initially disseminated via WhatsApp and email. At
T2, 236 respondents in total returned finished questionnaires three months later. Finally, at T3, 2 weeks following T2, 223 responses
were received, which were included in the final sample, the total response rate was 55.8 %. Responses were gathered in between
November 2021 as T1, February 2022 as T2 and finally March 2022 as T3. All responses to the previously listed factors were collected
on a 7-point Likert scale, with 1 denoting “strongly disagree” and 7 denoting “strongly agree”. The respondent SMME-sectors included
sugar industry (30.9 %), food industry (27.4 %), leather industry (21.1 %), medicine industry (9 %), textile industry (4 %), paper
industry (3.6 %) and others (4 % included feed industry, electronics industry and vegetable oil industry).

3.2. Measures

The measures were taken from verified and authentic sources. Table 2 lists the liability indicators of variables.

3.2.1. Green HRM practices

Green HRM practices (GHRM) were measured using six-items [27]. The scale (Composite reliability/CR = 0.92, Cronbach’s
Alpha/α = 0.89, Average variance extracted/AVE = 0.64) indicated good reliability in this study.

Fig. 2. Measurement model.

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3.2.2. Green knowledge sharing

GKS scale that this study adopted is a five-item measure [30]. The scale showed a good level of reliability in this study (CR = 0.88, α
= 0.84, AVE = 0.60).

3.2.3. Green innovation

To assess GI an eight-item measure was adopted [39]; four-items for GPTI and four items for GPSI. Both measures of GI indicated
good reliability in this study (GPTI CR = 0.88, α = 0.81, AVE = 0.64; GPSI (CR = 0.87, α = 0.81, AVE = 0.64)).

3.2.4. Green competitive advantage

GCA was assessed using eleven items [36]. The scale (CR = 0.94, α = 0.93, AVE = 0.60) indicated good reliability in this study.

3.2.5. Green human capital

GHC was measured using five items [40]. The scale (CR = 0.87, α = 0.82, AVE = 0.57) indicated good reliability in this study.

4. Results

Measurement model and structural model are used in the analysis method to check validity and reliability. Furthermore, mediation
and moderation analyses are key to understand the results.

4.1. Measurement model

The analyses included inter-construct correlations, descriptive statistics and reliability coefficients. Moreover, SPSS version-26 and
SmartPLS version-3 were the packages to analyze the model. This investigation pointed out that the measurement model (Fig. 2) has
very good convergent validity (Table 1) and discriminant reliability (Table 2). The results showed that these are all above the
benchmarked 0.700 in Fig. 3 and Table 1. All other values like composite reliability (>0.700), average variance extracted (AVE)
(>0.500) and Cronbach’s Alpha (>0.700) were lit the least requirements. All AVE values are lower than the composite reliabilities of
their respective constructs. The diagonals of √AVE were greater than its correlations values. It means that results were above the
benchmarked values about the discriminant validity of all variables to apply [87]. Furthermore, all R2 values (>0.100) were also
meeting the required quality criteria for constructs i.e. GKS, GPTI, GPSI and GCA [88].

4.2. Correlational and descriptive analysis

It included correlation coefficients, mean, standard deviations about constructs in Table 2. Green HRM practices showed sub­
stantial positive associations with GKS (β = 0.482, p < .01), GPTI (β = 0.547, p < .01), GPSI (β = 0.579, p < .01) and GCA (β = 0.593, p
< .01), as predicted. The mediator GKS exhibits highly significant and positively correlated with GPTI (β = 0.617, p < .01) and GPSI (β
= 0.627, p < .01). Both mediators GPTI (β = 0.711, p < .01) and GPSI (β = 0.739, p < .01) were highly significant and positively
correlated with dependent variable GCA. Therefore, all the constructs were positive and highly significant correlations with one
another as speculated earlier.
Moreover, all these highly significant correlations of constructs were less than the diagonal values (√AVE) with other constructs

Table 1
Sample Demographic attributes.
Characteristics Respondents (n = 223) Percentage (%)

Gender
Male 218 97.8
Female 5 2.2
Marital Status
Married 127 57.0
Unmarried 96 43.0
Age
30 Year or Less 125 56.1
31–40 Year 61 27.4
41–50 Year 34 15.2
Greater than 50 Year 3 1.3
Educational Qualification
Graduation 140 62.8
Masters 80 35.9
Doctoral 3 1.3
Employee Experience within current Organization
1–5 Year 158 70.9
6–10 Year 34 15.2
11–15 Year 14 6.3
More than 15 Year 17 7.6

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Table 2
Convergent validity.
Factor Loadings

Construct/Variable Items Minimum Maximum AVE CR α R2

GHRM 6 0.747 0.848 0.643 0.915 0.889 –

GKS 5 0.729 0.832 0.602 0.883 0.835 0.388
GPTI 4 0.727 0.848 0.637 0.875 0.809 0.387
GPSI 4 0.705 0.871 0.635 0.874 0.808 0.405
GCA 11 0.719 0.807 0.601 0.943 0.933 0.628
GHC 5 0.724 0.793 0.574 0.871 0.815 –

Note: n = 223, α = Cronbach’s alpha, AVE = average variance extracted, CR = composite reliability, R2=Coefficient of determination, GHRM = Green
HRM practices, GKS = Green knowledge sharing, GPTI = Green product innovation, GPSI = Green process innovation, GCA = Green competitive
advantage, GHC = Green human capital.

Fig. 3. Estimated PLS path model.

and meeting the criteria very well. The moderator GHC also reflected highly significant correlations with other constructs.
Green HRM practices (β = 0.538, p < .01), GKS (β = 0.524, p < .01), GPTI (β = 0.619, p < .01), GPSI (β = 0.489, p < .01) and GCA
(β = 0.528, p < .01) were highly significant and correlated with it. These correlations showed that theoretical links might be projected
in this inquiry without running the risk of multicollinearity.
The heterotrait-monotrait ratio (HTMT) in Table 3 also directed that almost all the required indicator correlations were within the
threshold mark (<0.900). Hence, the results exhibited that the discriminant validity was not the issue in the study.

Table 3
Correlation and discriminant validity.
Mean SD 1 2 3 4 5 6

1. GHRM 4.31 0.560 0.802

2. GKS 4.17 0.568 0.482** 0.776
3. GPTI 4.03 0.761 0.547** 0.617** 0.798
4. GPSI 4.01 0.814 0.579** 0.627** 0.777** 0.797
5. GCA 4.09 0.625 0.593** 0.666** 0.711** 0.739** 0.775
6. GHC 4.07 0.663 0.538** 0.524** 0.619** 0.489** 0.528** 0.758

Note: n = 223, **p < .01, SD = standard deviation, boldface values in the diagonal are √AVE, GHRM = Green HRM practices, GKS = Green
knowledge sharing, GPTI = Green product innovation, GPSI = Green process innovation, GCA = Green competitive advantage, GHC = Green human
capital.

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4.3. Structural model and hypothesis Testing

Hypotheses were evaluated in Tables 4 and 5 with the help of direct, specific indirect and total effects with applying partial least
square (PLS) approach. This study started by examining the cumulative and direct effects of Green HRM practices, GCA, and GKS.
Second, GPTI and GPSI’s direct and cumulative effects of GKS were assessed. As well as the effects of GPTI and GPSI on GCA were
studied. In order to observe the mediation effect of GKS, GPTI, and GPSI on the relationship between GHRM and GCA, the four-step
technique was adopted [89].
The investigation also looked at how (GHRM × GHC) affected GKS in a moderating way. The path coefficients of hypotheses
indicated that the relationships were highly significant and positive. As a consequence, these findings supported all of the study’s
hypotheses. The t-statistics (>1.96) of direct effects and indirect effects were also highly significant as their values were above the
benchmark value. If the analyses check the p-values of the relationships then the results came to know that almost all relationships
were highly significant and positive.
The positive and high significance were indicated in all the direct and indirect effects of the relationships because these values were
within the benchmark limit (p < .01). The positive and high significance were indicated in all the direct and indirect effects of the
relationships because these values were within the benchmark limit (p < .01).
The moderating relationship exhibited that there was highly significant effect (p < .01) of (GHRM × GHC→GKS). The moderating
effect (GHRM × GHC→GKS) was positive and highly significant which was determined by (β = 0.152, t = 2.873, p < .01) as well. The
estimated PLS path model and the complete moderated-mediation model (Fig. 4) were determined. It shows that GHRM (β = 0.400)
and GHC (β = 0.410), and their interaction term (GHRM × GHC; β = 0.152) explain a 38.8 % variance in GKS (R2 = 0.388). According
to Hypothesis 1, GHRM has a substantial positive relationship with GCA.
The direct impact of GHRM on GCA with mediation is positive and highly significant (β = 0.206, t = 3.262, p.01), as are the overall
effects without mediation (β = 0.380, t = 4.968, p.01), verifying Hypothesis 1. Moreover, Hypothesis 2 states that GHRM and GKS have
a strong positive relationship. The direct and total effects of GHRM on GKS (β = 0.400, t = 4.021, p < .01) are positive and highly
significant. GKS shows a substantial positive correlation with GPTI, according to Hypothesis 3a. This hypothesis supported by the fact
that the overall impact of GKS on GPTI (β = 0.623, t = 13.764, p < .01) was positive and highly significant (see Table 6). GKS shows a
substantial positive correlation with GPSI as well, according to Hypothesis 3b. The hypothesis 3b is supported by the fact that the
impact of GKS on GPSI (β = 0.637, t = 18.058, p < .01) was also positive and highly significant.
Furthermore, Hypothesis 4a is supported by the fact that the impact of GPTI on GCA (β = 0.294, t = 3.452, p < .01) was positive and
highly significant (see Table 6). GPSI shows a substantial positive correlation with GCA, according to Hypothesis 4b. This hypothesis is
supported by the fact that the impact of GPSI on GCA (β = 0.395, t = 4.524, p < .01) was positive and highly significant as well (see
Table 6).
The results indicated that all the direct relationships in the study were positive and highly correlated. This was the confirmation of
all the direct hypotheses that were made in the study. Hence, the results were equal to as per the desired consequences as well as the
results validate all the hypotheses.

4.4. Mediation analysis

According to Hypotheses 5a, 5b, 6a, and 6b, variables GKS, GPTI, and GPSI mediate the relationship between GHRM and GCA. The
stated path analysis (see Table 6) revealed that GHRM has a particular indirect effect on GPTI (β = 0.249, t = 3.814, p < .01) from GKS
given that these hypotheses meet the mediation conditions [89], according to the required path analysis in hypothesis 5a. So, this
mediation (GHRM→GKS→GPTI) was also highly significant and positive. The necessary path analysis in hypothesis 5b shows that
GHRM has a distinct indirect effect on GPSI through GKS (β = 0.255, t = 3.829, p < .01), according to hypothesis 5b.
According to the path analysis presented (see Table 6), GKS influences GCA indirectly (β = 0.183, t = 3.325, p < .01) from GPTI,
according to the required path analysis in hypothesis 6a. So, this mediation (GKS→GPTI→GCA) was highly significant and positive as
well. GKS is affected indirectly by GPSI on GCA (β = 0.252, t = 4.231, p.01), according to the required path analysis in hypothesis 6b.
Hence, this mediation (GKS→GPSI→GCA) was also highly significant and positive. These results suggested that GKS, GPTI and GPSI
were acting as partial mediators. As a result, hypotheses 5a, 5b, 6a and 6b were found to be validated.

Table 4
Heterotrait-monotrait ratio (HTMT).
GHRM GKS GPTI GPSI GCA GHC

GHRM
GKS 0.562
GPTI 0.646 0.751
GPSI 0.682 0.755 0.959
GCA 0.652 0.757 0.818 0.849
GHC 0.635 0.635 0.762 0.600 0.610

Note: GHRM = Green HRM practices, GKS = Green knowledge sharing, GPTI = Green product innovation, GPSI = Green process innovation, GCA =
Green competitive advantage, GHC = Green human capital.

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K. Mustafa et al. Heliyon 9 (2023) e21830

Table 5
Path coefficients (direct and specific indirect effects).
β SD t- Statistics p-Values

GHRM → GCA 0.206** 0.063 3.262 0.001

GHRM → GKS 0.400*** 0.099 4.021 0.000
GKS → GPTI 0.623*** 0.045 13.764 0.000
GKS → GPSI 0.637*** 0.035 18.058 0.000
GPTI → GCA 0.294** 0.085 3.452 0.001
GPSI → GCA 0.395*** 0.087 4.524 0.000
GHRM → GKS → GPTI 0.249*** 0.065 3.814 0.000
GHRM → GKS → GPSI 0.255*** 0.067 3.829 0.000
GKS → GPTI → GCA 0.183** 0.055 3.325 0.001
GKS → GPSI → GCA 0.252*** 0.059 4.231 0.000
Moderation (GHRM£GHC) → GKS 0.152** 0.053 2.873 0.004

Note: n = 223, SD = standard deviation, **p < .01, ***p < .001, GHRM = Green HRM practices, GKS = Green knowledge sharing, GPTI = Green
product innovation, GPSI = Green process innovation, GCA = Green competitive advantage, GHC = Green human capital..

Fig. 4. Simple slope analysis of moderation.

4.5. Moderation analysis

Hypothesis 7 states that GHC positively and strongly moderates the relationships between GHRM and GKS. The path analysis
results showed that GHC (β = 0.410, t = 5.430, p < .01) significantly contributed to GKS, and its moderation (GHRM × GHC) on GKS (β
= 0.152, t = 2.873, p < .01) was positive, highly significant, and extremely strong, assisting and inferring that the relationship between
GHRM and GKS strengthens with increasing levels of GHC.
Moderation was analyzed with simple slope analysis. The centered curve has without any effect of moderation, indicating GHC at
mean. The analyses indicated that when the moderating effect (GHRM × GHC) was stronger (at +1 SD), the curve became steeper
showing the vigorous positive impact on GKS (Fig. 4). Moreover, when the moderating effect (GHRM × GHC) was weaker (at − 1 SD),
the curve became flatter decreasing the impact on GKS. Hence, these analyses resulted that there is a highly significant positive

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Table 6
Path analysis and hypotheses Testing.
Overall Impact (t- Statistics) p-Values Hypothesis Outcome
Path

GHRM → GCA 0.380*** (4.968) 0.000 H1 Supported

GHRM → GKS 0.400*** (4.021) 0.000 H2 Supported
GKS → GPTI 0.623*** (13.764) 0.000 H3a Supported
GKS → GPSI 0.637*** (18.058) 0.000 H3b Supported
GPTI → GCA 0.294** (3.452) 0.001 H4a Supported
GPSI → GCA 0.395*** (4.524) 0.000 H4b Supported
GHRM → GKS → GPTI 0.249*** (3.814) 0.000 H5a Supported
GHRM → GKS → GPSI 0.255*** (3.829) 0.000 H5b Supported
GKS → GPTI → GCA 0.183** (3.325) 0.001 H6a Supported
GKS → GPSI → GCA 0.252*** (4.231) 0.000 H6b Supported
(GHRM × GHC) → GKS 0.152** (2.873) 0.004 H7 Supported

Note: n = 223, **p < .01, ***p < .001, GHRM = Green HRM practices, GKS = Green knowledge sharing, GPTI = Green product innovation, GPSI =
Green process innovation, GCA = Green competitive advantage, GHC = Green human capital.

moderation (GHRM × GHC→GKS) was present in the relationship, validating hypothesis 7.

5. Discussion

In complex and evolving settings, although, just gathering assets is lacking to hold a GCA. To adapt to a changing environment,
resources must be quickly integrated and reconfigured into dynamic capabilities [90]. These dynamic capabilities lead to GCA and are
in the form of Green HRM practices which was verified in the hypothesis 1. Information is also a significant key asset that has a high
proclivity for producing GCA [91].
Enhancing staff efficiency [92] and determining innovative enactment, organizations should construct information-based unique
abilities like information procurement, incorporation, and blend [93]. Information arranged experts would better energize Green HRM
practices and GKS, by liking employees for insight, skills, familiarity, and commitments about GI during production. This was validated
in hypothesis 2.
Manufacturing organizations should hire the staff with green recruitment and selection, training and development, performance
appraisals, rewards and promotions, according to AMO theory. This all may be achieved by setting green goals for them also. Hence,
cultivate a group philosophy that encourages the improvement of green knowledge-based unique capacities, bringing about better
degrees of innovation achievement and, surprisingly, a GCA. Hence, this was validated in hypotheses 3a, 3b, 4a and 4b.
The PLS path model demonstrated the solid affirmative connection of variables, as anticipated. This study implies that in order to
stimulate GKS during the social and job ranks, GHC should incorporate knowledge orientation with the help of Green HRM practices.
This will increase colleagues’ ability to share knowledge and expertise with one another so that it may benefit to employees and
organizations as well.
Performance appraisals and rewards help out to motivate the employees towards the green goals. In this way, employees may
improve their contributions, competencies, service qualities and degrees of teamwork to protect the environment, in order to turn it to
GHC. This strategy would foster GI and generate knowledge-based dynamic skills for achieving GCA in footings of organizational
triumph, organizational job efficiency, and the whole show. Hence, the strong AMO framework application adds fuel to the NRBV
framework according to this study. It also works on the firm’s green status. Therefore, hypotheses 5a, 5b, 6a and 6b are accepted and
verified the mediators.
This exploration’s aim is a demonstration of GHC highly significant affects over GKS in SMMEs. This research found that this has a
moderate positively and high significance impact on GKS, which supports hypothesis 7. Previous research, such as Ref. [94] has found
that an organization’s inside asset based human resources is a deciding component of complex performance in the organization.
Moreover, this study found that assuming an organization’s way of life is creative and solid, GHC advances toward increments and
impacts organizational learning and information efficiency simultaneously. Because industry practices are constant across cities and
countries, all SMMEs can be regarded similar in terms of working culture and management.

5.1. Theoretical contributions

The study contributed towards AMO theory and NRBV by uniting these in order to get GCA. Green HRM practices have added that
organizations may set green goals for the employees and provide them the way out in the form of training and development [95]. This
research adds to the knowledge that organizations may include green behaviors for performance appraisals, rewards and promotions
[23]. This will motivate the employees in order to articulate GKS as an opportunity.
The main contribution of this study is to introduce the GHC as a moderator. This concept explains that if there are already available
environment-friendly and skilled employees then they may share their green knowledge with newly recruited employees in order to gel
as united workforce. This behavior may rush towards the GPTI and GPSI more aggressively rather with the absence of GHC. Hence,
these GI dimensions lead to GCA according to NRBV [7].
The most significant contribution of this study is to join AMO framework with NRBV framework [95]. Organizations may

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implement this model in order to earn green repute in the customers and this may bring positive impact on the turnover [96].
Moreover, it may cut costs in order to make innovations about the product or process. This study provides the breakthrough in the form
of novel concept of GCA [97]. Organizations may gather this advantage by putting this study’s model into action. When employees
begin to share the green information with one another then the result may lead to GI dimensions, which is a mediator of GCA in this
study. Hence, this is the first study that provides Green HRM practices as the high-performance work practices [21] in order to
implement GCA from the NRBV framework.
This investigation improves the green knowledge of the organizations that in order to develop the employees cost-efficient and
innovative, these may give suggestions about the materials that produce the least amount of pollution or energy consumption [7].
Moreover, this study suggests to the organizations that the products contain the lowest amounts of resources by implementing the
recycling process with their productions. This allows the organizations to develop the eco-friendly design of the products in order to
achieve the green position with respect to competitors which may difficult to imitate.

5.2. Managerial Implications

A organization’s GHC is the underlying leverage resource required to receive the possible rewards like GKS [98]. As a result of these
findings, managers should focus more on developing a strong GKS culture and developing appropriate techniques to cultivate an
organizational innovation climate about the environment that supports employee ideas, resulting in a GCA. As a result, organizational
GIs can assist businesses in meeting legislative criteria for environmental protection. It is additionally basic for SMMEs to recruit
employees who are enthusiastic regarding environmental protection. Different checks may be created for this reason at the hour of
recruiting. The current study proposes that executives ought to keep up with green discipline by rebuffing or refining employees who
do not follow manufacturing environmental strategies.
The analysis recommends that investing in environmental management can help an organization earn a positive reputation among
stakeholders, who are increasingly demanding and pressuring businesses to make strides toward environmental friendliness in every
one of their cycles, products, and managements. The modern production to claim knowledge as the primary source of production
processes, replacing land, labor, money, machinery, and other organization fixed assets [99]. AMO theory explains knowledge sharing
as opportunity for the organization to affect modification. The concepts like high-performance work systems like Green HRM practices
in AMO theory and product stewardship as well as pollution prevention of NRBV framework may help to achieve the technology
enhancement in the organizations. Because this study only sampled from one geographic location in Pakistan, the findings may not be
entirely generalizable in other geographical, social, and economic contexts. These findings, however, provide managers with
important insights to solve their business and environmental challenges.

5.3. Limitations and future research directions

The study design was longitudinal time-lagging, and the specialist accepts that future examination ought to use a cross-sectional
study to allow for more flexible investigation of mediating effects over a single time. Furthermore, the findings inspire academics to
take a gander at other likely conditions, for example, the study suggested that future research take into account organizational
characteristics like green strategy and transformational leadership, which could lead to some fascinating findings.
The study should probe deeper into the component of this relationship, as well as consider other captivating builds like envi­
ronmental knowledge, investor pressure, favorable to natural qualities, and green organizational culture. Moreover, future research
should consider the industrial sector as well to verify the results at the larger scale. The sample for this study was chosen from a
particular region (Punjab province) in Pakistan; therefore, these findings may not be fully generalized to other local and international
geographical, social, and economic contexts due to cultural and environmental variations. Future research should consider a more
diverse and a larger sample to gain more generalizable outcomes. Similar studies can be conducted in western cultural environment
including newly industrialized countries with environmental concerns, such as South Korea or Singapore. Future examination might
also adopt a mixed-method approach to concentrate on the connection between the variables of this research model.

5.4. Conclusion

Green HRM practices predict GCA for SMMEs. This phenomenon is the result of a moderated mediation process. In a sequential
development, the green HRM practices promote GKS that lead to green product and GPSIs, which in turn contribute to GCA. Green
human capital plays the role of a moderating variable in the process. It interacts with the green HRM practices, enhances GKS, and thus
boosts GCA by increasing green product and process innovations. These findings are well supported by the AMO and NRBV theories
and have significant relevance for the SMMEs seeking a green edge over their industrial competitors.

Data availability statement

Data will be made available on request.

CRediT authorship contribution statement

Khurram Mustafa: Writing – original draft, Investigation, Formal analysis, Conceptualization. Md Billal Hossain: Visualization,

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K. Mustafa et al. Heliyon 9 (2023) e21830

Funding acquisition, Methodology, Supervision. Farooq Ahmad: Methodology, Formal analysis, Conceptualization, Visualization.
Faisal Ejaz: Data curation, Methodology, Writing - review & editing. Hafiz Ghufran Ali Khan: Validation, Data curation, Software,
Visualization. Anna Dunay: Validation, Resources, Methodology, Funding acquisition, Conceptualization, Project administration.

Declaration of competing interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to
influence the work reported in this paper.

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