Manufacturing organizations have a pivotal role in reducing the adverse impact of global warming by adopting sustainable practices and producing environmentally-friendly products. Organizations are engaged in environmental corporate social responsibility (ECSR) and emphasize green intellectual capital (GIC), green innovative products and support for business sustainability (BUS). The current study aims to analyze the impact of organizational ECSR and GIC on green innovation (GIN) and BUS. The data for 237 participants from the manufacturing firms were analyzed via partial least square structural equation modelling (PLS-SEM). The study results revealed that ECSR and GIC are crucial for GIN and BUS. The study’s findings revealed that ECSR positively and significantly impacts green relational capital (GRC) and green structural capital (GSC). However, ECSR’s positive impact on green human capital (GHC) was insignificant. Further, the results of the mediation analysis show that GIN serves as a full mediator between GIC’s two components, GRC and GSC and a partial mediator between GHC and BUS. This study extends the environmental management literature and suggests measures for practitioners to enhance organizational capabilities in order to address environmental issues through innovative green initiatives.

The expansion of government size will have dual effects on a country’s green innovation. An appropriately sized government size increases marginal productivity and stimulates the development of green innovation by increasing government expenditure. On the contrary, an excessively sized government creates a huge administrative agency, which not only increases the tax burden but also damages social welfare by excessive intervention. Therefore, the effect of government size on green innovation is not linear. In order to prove this proposition, this study examines the impact of government size on green innovation in 166 countries between 1995 and 2018, using a two-way fixed effects model. The results reveal an inverted U-shaped relationship between government size and the level of green innovation, indicating that optimal government size may maximize a country’s green innovation output. The results further suggest that this inverted U-shaped relationship is mainly influenced by environmental regulations and financial support. Finally, our heterogeneity analysis demonstrates that the inverted U-shaped relationship is more pronounced for countries with high organizational inertia and more R&D expenditure than for those with low organizational inertia and less R&D expenditure. This finding makes up for the research gap between government size and green innovation and provides a reference for countries to formulate the optimal government size to improve the level of green innovation.