Does Corporate Social Responsibility Drive Financial Performance? Exploring the Significance of Green Innovation, Green Dynamic Capabilities, and Perceived Environmental Volatility

Environmental success can only become a reality when the financial goals of firms\r\nare not compromised. Based on this proposition, the study aimed to investigate four\r\nrelationships, including the effect of corporate social responsibility (CSR) on financial\r\nperformance, mediation of green dynamic capabilities (GDCs) between CSR and\r\ngreen innovation (GI), mediation of GI between CSR and financial performance, and\r\nmoderation of perceived environmental volatility in GI and financial performance\r\nnexus. A sample of 655 manufacturing firms was collected from Pakistan to test the\r\nproposed hypotheses, and structural equation modeling was conducted. The results\r\ndemonstrate a positive significant influence of CSR on financial performance. In addition,\r\nthe mediation of GDCs and GI has also been confirmed. Furthermore, the\r\nresults demonstrate that high environmental volatility weakens the GI and financial\r\nperformance nexus. The study results offer unique contributions to the literature and\r\ninteresting suggestions for practicing emerging economy managers.