The Role of Knowledge Management in Driving Sustainable Development in Serbia's Green Economy

Abstract

This study develops a conceptual framework to investigate the role of knowledge management in facilitating Green Product and Process Innovations (GPPI) within the broader context of sustainable business development. While existing literature recognizes the strategic importance of knowledge management, it offers limited insight into its specific contribution to achieving sustainability-related outcomes. To address this gap, a cross-sectional research design was employed. Data were collected through a structured survey administered to 300 respondents, comprising lower, middle, and upper-level managers from small, medium, and large manufacturing, service, and hybrid organizations in Serbia. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM)..The results reveal that Knowledge Management (KM) exerts a positive and statistically significant influence on Green Product and Process Innovations. Specifically, key Knowledge Management processes - such as knowledge dissemination and application - emerge as significant drivers of green innovation. These innovations, in turn, positively affect various dimensions of sustainability metrics, including environmental outcomes, economic efficiency, and managerial commitment to environmental protection. The statistical results (β significant at p <0.001) confirm the robustness of these relationships. R² values indicate moderate to high levels of explained variance, while f² and Q² values confirm the predictive relevance of the model. These findings provide empirical support for the theoretical proposition that Knowledge Management plays a pivotal role in promoting green innovation capabilities. The originality of this study lies in its examination of previously underexplored, multidimensional interrelationships among Knowledge Management processes, green innovations, and Sustainable Development (SD). The observed positive correlations between these constructs further reinforce the validity of the proposed conceptual framework.