INVESTIGATING THE IMPACT OF DYNAMIC CAPABILITY AND KNOWLEDGE MANAGEMENT ON GREEN INNOVATION IN THE UPSTREAM OIL AND GAS SECTOR

Abstract

Upstream sector refers to both exploration and production stages in oil and gas industry. The sector remains unconnected with the end-user consumer and oil and gas supply chain. Despite its over-dependence on knowledge management and dynamic capabilities of oil and gas companies, it faces the biggest challenge of controlling hydrocarbon production the pressure to adopt eco-friendly, sustainable green innovation techniques. This study explores the nexus between knowledge management and dynamic capabilities in enhancing green innovation within the oil and gas industry. The data was collected randomly from 105 participants working in the upstream oil and gas sector in Indonesia. It utilized Partial Least Squares Structural Equation Modeling to examine such factors and mediating devices that facilitate the adoption of green innovation. The study pursues the premise that knowledge management can directly influence green product and process innovation, with dynamic capabilities playing a mediating role. The results reveal that knowledge management alone does not have a substantial effect on green innovation but the presence of dynamic capability is required to play a moderating role. This study offers a unique and valuable insight into the concept of green innovation in the oil and gas sector. It suggests that the difficulty of implementing sustainable practices is affected by the interplay between knowledge management and dynamic capacities.