Pathways linking green digital transformation to sustainable development through knowledge sharing and dynamic capabilities

Abstract This study explores how Green Digital Transformation (GDT) affects Sustainable Development Performance (SDP), with a particular focus on the mediating roles of Green Knowledge Sharing (GKS) and Green Dynamic Capabilities (GDC). Drawing upon the Natural Resource-Based View (NRBV) and Knowledge-Based View (KBV), the research develops and empirically tests an integrative model using data from 386 SMEs in the UAE’s innovation-driven industries. Findings from Partial Least Squares-Structural Equation Modeling (PLS-SEM) reveal that GDT significantly improves SDP, both directly and through the mediating influences of GKS and GDC. GKS acts as a key enabler, transforming digital investments into innovation and capability enhancement, while GDC supports strategic reconfiguration to drive eco-innovation. These results emphasize the importance of integrating digital, knowledge, and capability strategies to achieve sustainability goals, offering theoretical contributions and practical guidance for managers and policymakers engaged in ESG transformation.