This research examines the linkage between entrepreneurial orientation and sustainable innovation. Research shows that the effects of entrepreneurial orientation on the exploitation and exploration of sustainable innovation are significantly positive, whereby absorptive capacity acts in a significant mediating role. The interaction between entrepreneurial orientation and absorptive capacity helps organizations overcome organizational inertia and strengthen the sustainability of innovation. By introducing the absorptive capacity theory and the view of organizational inertia, we have conducted empirical research on 392 Chinese environmentally friendly companies that have passed China’s national high-tech enterprise certification. We verified the relevant hypotheses in our framework in a structural model analysis using Mplus. To further look at the interaction terms of potential and realized absorptive capacity, we used PROCESS in SPSS to evaluate the conditional effects of absorptive capacity on coefficient paths between entrepreneurial orientation and the two types of innovation. The results show that entrepreneurial orientation improves the absorptive capacity of organizations, thereby promoting their sustainable innovation. Furthermore, based on the theory of sustainable innovation, we proved the positive impact of realized and potential absorptive capacity on the exploitation and exploration of sustainable innovation. Organizations could balance exploitation and exploration to implement sustainable innovation by adjusting their potential and realized absorptive capacities. Our results can help environmentally friendly organizations adjust the combination of entrepreneurial orientation and absorptive capacity to overcome organizational inertia, manage exploitation and exploration, and implement sustainable innovation.

This study explores how local political turnover affects corporate R&D investment and innovation performance in an emerging economy like China. Based on the panel data of 956 listed firms in China, we found that local officials’ turnover has a direct negative effect on both R&D investment leap and corporate innovation performance. Furthermore, local officials’ turnover inhibits innovation performance provided the new officials are transferred from other places but improves innovation performance provided the old officials are dismissed for corruption or other violations. Finally, R&D investment leap positively moderate the relationship between local officials’ turnover and corporate innovation performance. These findings contribute to the literature on how political uncertainty at the regional level affects R&D and innovation activities at the firm level and provide significant guidance for both the government and manufacturers in China.