What drives responsible innovation in polluting small and medium enterprises?: an appraisal of leather manufacturing sector

Responsible innovation (RI) has always been a major topic in discussions about environmental concerns, such as the depletion of natural resources, economic advancement, climate change, and social responsibility. Still, its incorporation in the business field is in its early stages, particularly among small and medium enterprises (SMEs). This research aims to investigate the influence of internal and external drivers on RI and sustainable competitive advantage (SCA). The hypotheses of the study are examined through the Structural equation modeling (SEM) technique, and data were gathered from 291 owners/managers of leather manufacturing SMEs through simple random sampling. The study found that external drivers significantly and positively impact RI strategies, whereas internal drivers have an insignificant relationship with RI strategies. Furthermore, RI strategies have a significant and positive relationship with SCA. This study adds to the existing literature by focusing on predictors that impact SCA. This initial study examines the influence of external and internal drivers on RI and SCA using dynamic capability theory and institutional theory. On these bases, relevant recommendations have been made to promote RI from the perspective of the government and SMEs.