Green innovation in hard-to-abate sectors: A conceptual model of green dynamic capabilities.

Abstract

Achieving net-zero emissions is a global priority, but hard-to-abate sectors, particularly heavy manufacturing industries, face extreme difficulties in their green transition. Unlike light-asset firms, these sectors suffer from severe physical and cognitive asset lock-ins. High sunk costs in old machinery and rigid management thinking prevent them from adopting green technologies. While existing research often focuses on external pressures like government regulations, this paper shifts the focus to the internal organizational level by using the Dynamic Capability View. To address this gap, this paper builds a conceptual model to explain how these firms can achieve green innovation through green dynamic capabilities. The framework divides these capabilities into three clear stages. First, green sensing allows firms to identify environmental trends and new technologies. Second, green seizing enables management to make concrete green investment decisions. Third, green reconfiguring helps firms physically transform their old production lines. From this logical structure, we develop several theoretical propositions. We argue that these three capabilities are the necessary internal tools to break asset lock-ins and turn external environmental pressures into real green innovation performance. Finally, this paper provides a clear theoretical map for future empirical research.