Responsible Innovation, Circular Economy and Organisational Resilience: Investigating Multiple Pathways Towards Sustainability Performance

Say Keat Ooi and Khalid Rasheed Memon

Business Strategy and the Environment, 2025, vol. 34, issue 7, 8966-8982

Abstract: Responsible innovation has gained significant traction as a strategic approach to achieving business sustainability. However, the mechanisms through which responsible innovation influences sustainability performance remain underexplored. To address this gap, this study proposes two serial mediators that link responsible innovation to sustainability performance. Drawing on the integration of the resource‐based view and dynamic capabilities perspective, data were collected from 185 technologically innovative manufacturing firms using a two‐wave, time‐lagged survey. Partial least squares hierarchical component modelling reveals that responsible innovation enhances sustainability performance through circular economy practices and organisational resilience, with circular economy practices demonstrating a stronger effect. To assess and address potential endogeneity, the Gaussian copula approach was applied, confirming no endogeneity concerns and ensuring the robustness and reliability of the findings. Furthermore, an importance–performance map analysis indicates that while responsible innovation is highly important for sustainability outcomes, it shows relatively low performance in practice. These findings offer detailed insights into the pathways linking responsible innovation to sustainability, contributing to theoretical advancement and informing sustainable business strategies.

Date: 2025
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