A systematic literature review of internal capabilities for enhancing eco-innovation performance of manufacturing firms

Abstract

Abstract Establishing an effective eco-innovation strategy requires the firms to embrace changes and adapt to a dynamic environment, thus contributing to a competitive advantage. In this case, internal factors have a greater influence in forming a fit and effective business model. Nevertheless, internal factors can only be adapted with efficient capabilities responding to changes in the business environment. This situation rationalises why the internal capabilities of a firm need to be deeply explored and comprehensively developed. Literature indicates that most previous reviews concentrated on broad internal factors. Thus, this study complements the papers by specifying the particular capabilities on top of the wide factors. Through a systematic literature review, this study aims to present the lack of current research regarding the internal capabilities of manufacturing firms in enhancing eco-innovation. The literature was classified accordingly, presenting a framework with recommendations for future research. The results show that further study on internal eco-innovation capabilities is necessary by providing more attention to organisational culture and structure dimensions, specifically on the most crucial capabilities, dynamic, and integration. The findings also suggest that there is a need to measure the social, product development, and environmental performance. The situation presents an opportunity to investigate further internal capabilities that provide values to firms in managing resources and strengthening their ability to enhance eco-innovation performance.