Journal of Sustainable Marketing

Theoretical Foundations

This study draws on an integrative theoretical framework grounded in Dynamic Capability Theory, the Natural Resource-Based View (NRBV), Sustainable Business Model Innovation (SBMI), and Green Marketing Theory. Together, these perspectives explain how firms develop internal capabilities, respond to external pressures, and communicate sustainability commitments in ways that enable strategic transformation and long-term value creation in culturally embedded markets such as Muslimah fashion.

Dynamic capabilities refer to a firm’s capacity to sense environmental changes, seize emerging opportunities, and reconfigure internal and external resources to remain competitive under uncertainty (Chaudhuri et al., 2024). In small and medium-sized fashion enterprises, particularly within the Muslimah fashion sector, dynamic capabilities enable firms to identify shifts in consumer values toward ethical and environmentally responsible products, adopt new design and production practices, and realign organizational routines accordingly. These capabilities are especially critical in industries transitioning from fast fashion toward more responsible models such as slow fashion, zero-waste design, and circular production systems.

Complementing this perspective, the Natural Resource-Based View extends the resource-based logic by emphasizing that competitive advantage can be derived from environmentally valuable, rare, inimitable, and non-substitutable resources (Liu, 2025). In the fashion context, such resources may include access to eco-friendly materials, long-term relationships with ethical suppliers, and capabilities for waste minimization and cleaner production. When embedded in core business processes, these environmentally oriented resources contribute not only to reduced ecological impact but also to differentiation and legitimacy in increasingly sustainability-conscious markets.

Sustainable Business Model Innovation refers to redesigning a firm's value creation, delivery, and capture mechanisms to integrate environmental and social objectives alongside economic performance (Chabowski et al., 2025). Unlike isolated sustainability initiatives, SBMI involves systemic change that embeds sustainability into the logic of how the business operates. In Muslimah fashion businesses, SBMI may involve reconfiguring value propositions to balance Islamic ethical principles with ecological responsibility, adopting alternative sourcing and production models, leveraging digital channels to promote sustainable products, and reshaping customer engagement practices to support long-term sustainability goals.

It is important to distinguish sustainability-oriented practices from green marketing activities. Sustainability encompasses substantive changes in design, production, and organizational processes aimed at reducing environmental impact and enhancing social responsibility. Green marketing, by contrast, refers specifically to how firms communicate environmental and ethical attributes of their products and practices to external audiences (Deshmukh & Tare, 2023). Green marketing includes promotional messages, labeling, storytelling, and transparency initiatives that signal a firm’s sustainability orientation. While effective green marketing can build trust, differentiate brands, and strengthen customer loyalty, its credibility depends on alignment with genuine sustainability practices. In contexts where greenwashing is a concern, inconsistencies between communication and actual practices can undermine consumer trust and damage brand reputation (Apostolopoulos et al., 2025; Wang et al., 2025).

Together, these theoretical lenses provide a coherent foundation for understanding how internal capabilities, environmentally oriented resources, and strategic communication interact to shape sustainable business model innovation and performance outcomes. They allow this study to examine not only whether Muslimah fashion businesses adopt sustainability practices, but how sustainability is operationalized through internal transformation, external engagement, and credible market communication.

Dynamic Capabilities and Sustainable Strategic Practices

Dynamic capabilities refer to a firm's ability to purposefully adapt, integrate, and reconfigure its internal and external resources in response to environmental change (Cavusgil & Deligonul, 2025). These capabilities are especially important in dynamic industries such as fashion, where shifts in consumer preferences, regulatory landscapes, and environmental demands require businesses to innovate and continuously realign their strategies. For small Muslimah fashion businesses, dynamic capabilities can serve as the foundational mechanism to adopt sustainability practices that align with both Islamic values and global environmental expectations.

Two critical areas where dynamic capabilities are expected to play a central role are sustainable design strategy and green marketing practices. Sustainable design refers to integrating ecological principles such as durability, waste reduction, ethical material use, and long product lifespans into product development (Alzaydi, 2024). Firms with strong dynamic capabilities, especially sensing and reconfiguring, are better equipped to identify sustainability trends, understand environmental risks, and restructure production processes accordingly (Zheng et al., 2024). For example, a business that can sense consumer interest in slow fashion or zero-waste practices will be more likely to introduce eco-conscious product lines and design strategies. Reconfiguring internal processes such as switching to biodegradable materials or redesigning cutting patterns also reflects the operational flexibility that dynamic capabilities enable.

In parallel, dynamic capabilities also enhance a firm’s ability to adopt and execute green marketing strategies. These strategies involve communicating the environmental benefits of products or operations in ways that build trust, reflect authenticity, and differentiate the brand (Mehta, 2024). The seizing dimension of dynamic capabilities is particularly relevant here, as it enables firms to craft timely and relevant green value propositions and deliver them to the right audiences through effective marketing channels. Firms with strong dynamic capabilities are also more likely to keep marketing messages aligned with actual sustainability practices, reducing reputational risk (Mohammed et al., 2025; Santos et al., 2024).

In the context of Muslimah fashion, dynamic capabilities help businesses navigate the dual expectations of modesty and environmental responsibility. For example, a boutique that senses increased demand for faith-aligned yet eco-friendly clothing may reconfigure its product offerings and develop promotional narratives that emphasize ethical sourcing, zero-waste design, and halal-certified materials.

Thus, based on both theoretical and empirical evidence, this study argues that dynamic capabilities are critical enablers of two interrelated strategic practices: sustainable design and green marketing.

H1: Dynamic capabilities positively influence the implementation of sustainable design strategies in Muslimah fashion businesses.

H2: Dynamic capabilities positively influence the implementation of green marketing practices in Muslimah fashion businesses.

Consumer Sustainability Expectations and Green Marketing Practices

Consumer behavior in the fashion industry is increasingly influenced by environmental and ethical concerns (Schiaroli et al., 2024; Upadhyay & Kamble, 2025). A growing body of evidence shows that modern consumers, particularly younger and more educated segments, expect fashion brands to demonstrate clear commitments to sustainability, including responsible sourcing, fair labor practices, and ecological production methods (Kamgang et al., 2023). These expectations extend beyond product quality to how businesses communicate their environmental values, a domain known as green marketing.

Green marketing refers to creating, communicating, and delivering environmentally responsible value propositions to customers (Zhang et al., 2024). It involves not only promoting eco-friendly attributes of products but also reflecting a company’s broader sustainability commitments through brand narratives, labeling, certifications, and public engagement. However, green marketing effectiveness depends on its credibility and relevance to the target audience.

For Muslimah fashion consumers, sustainability expectations often intersect with religious values such as modesty, ethical consumption, and stewardship (Manzoor et al., 2024). This unique consumer profile is highly sensitive to authenticity, integrity, and social responsibility. Consequently, businesses in the Muslimah fashion sector face increasing pressure to demonstrate their environmental values in ways that align with faith-based consumer expectations.

Recent studies confirm the link between consumer expectations and green marketing adoption. Camel et al. (2024), in their empirical study of sustainable fashion brands, found that brands that engaged with sustainability-conscious consumers were more likely to adopt transparent, proactive green marketing strategies. Furthermore, Widjajanti et al. (2025) emphasized that consumer-driven green orientation serves as a critical external factor shaping firms' marketing agendas.

In small Muslimah fashion businesses, where customer loyalty and community reputation are essential, meeting consumer sustainability expectations through green marketing becomes a strategic imperative. Firms that recognize and respond to these expectations are better positioned to gain trust, build brand equity, and sustain market relevance.

H3: Consumer sustainability expectations positively influence the use of green marketing practices in Muslimah fashion businesses.

Institutional Stakeholder Pressure and Sustainable Design Strategy

Stakeholder theory posits that businesses do not operate in isolation. Rather, firms are embedded in a broader network of actors that can influence organizational behavior and strategic decision-making. In sustainability contexts, these actors may include regulators, suppliers, industry associations, civil society organizations, religious authorities, and local communities, all of whom may exert expectations regarding environmental responsibility, ethical sourcing, waste reduction, and transparency (Bankins et al., 2024). In this study, stakeholder pressure refers specifically to institutional stakeholder pressure, while consumer-related expectations are treated separately through the construct of consumer sustainability expectations in H3. This distinction matters because consumers represent a distinct market-based source of sustainability demand, whereas H4 focuses on broader institutional, social, and community-based pressures that encourage firms to adopt environmentally responsible design practices.

In the context of environmental sustainability, institutional stakeholders increasingly expect businesses to minimize their ecological footprint, adopt socially responsible practices, and improve transparency in production and sourcing processes (Deshmukh & Tare, 2023). These external pressures are particularly relevant in the fashion industry, which is widely associated with textile waste, chemical use, excessive resource consumption, and unsustainable supply chain practices. For small and medium-sized fashion enterprises, stakeholder pressure may serve as an important external trigger that encourages firms to reassess production practices and adopt more sustainable alternatives.

Sustainable design strategy, defined as integrating environmental considerations into product development and production processes, is one of the key areas in which businesses respond to stakeholder pressure (Mengistu et al., 2024). This strategy includes selecting eco-friendly materials, applying zero-waste principles, designing long-lasting products, reducing textile waste, and minimizing production-related emissions and resource use (Rahaman et al., 2024). Empirical research shows a consistent relationship between stakeholder pressure and the adoption of environmentally responsible product design. For example, Agyabeng-Mensah et al. (2024) found that external pressure from institutional actors, civil society organizations, and industry partners significantly influenced circular design initiatives among fashion firms. Such pressures often act as catalysts that push businesses, especially small and medium-sized enterprises, to adopt sustainable design practices even when internal motivation or resources remain limited.

In the context of Muslimah fashion businesses in Makassar, institutional stakeholder pressure can take several forms. Regulatory bodies may encourage compliance with environmental standards, suppliers may influence material choices and production processes, industry associations may promote sustainability norms, religious authorities may encourage ethical sourcing consistent with Islamic values, and local communities may expect businesses to contribute to broader social and ecological goals. This sociocultural and institutional context increases the salience of stakeholder demands and motivates businesses to embed sustainability considerations into product design and production decisions.

Therefore, when institutional stakeholder pressure is perceived as strong and legitimate, Muslimah fashion businesses are more likely to adopt sustainable design strategies to gain legitimacy, meet institutional and community expectations, and maintain competitive relevance.

H4: Institutional stakeholder pressure positively influences the adoption of sustainable design strategies in Muslimah fashion businesses.

Sustainable Design Strategy and Sustainable Business Model Innovation

Sustainable design strategy in the fashion industry refers to deliberately integrating environmental and ethical considerations into the product development process (Mengistu et al., 2024). This includes using eco-friendly materials, minimizing waste through design efficiency, extending product life cycles, and aligning production with social responsibility standards (Siwiec et al., 2024). These strategies reflect a departure from conventional fast fashion practices and are central to the slow fashion and zero-waste movements.

Implementing sustainable design strategies not only transforms product characteristics but also has broader implications for how businesses create, deliver, and capture value, elements that define a business model (Jorzik et al., 2024). When fashion businesses adopt eco-conscious design approaches, they often must adapt other components of their business models, such as sourcing, production, distribution, pricing, and customer engagement (Bhandari et al., 2022). For instance, designing long-lasting clothing with minimal environmental impact may require forming new supplier relationships, revising cost structures, or educating customers, all of which contribute to sustainable business model innovation.

Sustainable business model innovation (SBMI) refers to redesigning business models to incorporate sustainability goals alongside economic performance. It involves creating systemic change by embedding sustainability in core business logic rather than treating it as an add-on (Boons & Lüdeke-Freund, 2013). In fashion, this includes shifting from linear to circular models, adopting pre-order systems to minimize overproduction, or engaging in product-service systems (e.g., rental, repair, reuse).

Empirical studies support the link between sustainable design and SBMI. For example, D'Itria et al. (2024) and Lit et al. (2024) found that sustainable product design choices in fashion businesses are closely linked with broader innovations in their business models. By prioritizing environmentally responsible design, firms signal long-term commitment to sustainability, which in turn requires and stimulates innovation across their value chain.

In the context of Muslimah fashion boutiques, where product design reflects both modesty norms and growing environmental consciousness, sustainable design becomes a strategic entry point for rethinking the entire business model. It provides both the necessity and the opportunity to move toward a sustainable, value-driven business architecture.

H5: Sustainable design strategies positively influence sustainable business model innovation in Muslimah fashion businesses.

Green Marketing Practices and Sustainable Business Model Innovation

Green marketing practices refer to strategies businesses use to promote the environmental attributes of their products and operations while also communicating broader sustainability commitments (Pattanaik, 2024). These practices may include labeling, storytelling, eco-certifications, transparency in sourcing, and educational campaigns. In fashion, green marketing has become a vital tool for brand differentiation and trust-building, particularly among consumers who value ethical and environmentally conscious consumption.

However, green marketing is not merely a communication function; it often reflects and reinforces deeper transformations within a business (Sohaib et al., 2025). Businesses that implement credible green marketing strategies often need to adjust other parts of their operations to align external messages with internal practices. This need for internal coherence often leads to sustainable business model innovation (SBMI), where firms reconfigure their value proposition, supply chain, and stakeholder relationships to support environmental goals (Norris et al., 2021).

SBMI involves rethinking the business logic to integrate sustainability at its core, rather than treating it as a peripheral or compliance-driven concern (Chabowski et al., 2025). In the fashion sector, especially among smaller niche brands, this may include shifting to made-to-order models, investing in local and ethical production, or engaging in community-based marketing and circular economy practices.

Empirical studies support the proposition that green marketing can catalyze SBMI. Singh (2024) describes how marketing efforts centered on environmental transparency require corresponding innovation in operations, logistics, and supplier selection. Similarly, Vehbi et al. (2025) found that fashion companies engaged in circular business models often relied on green marketing not only to educate consumers but also to drive internal innovation and alignment.

In the context of Muslimah fashion businesses, where customers are sensitive to both moral and environmental values, green marketing bridges the brand and its consumers' values. To avoid greenwashing and maintain credibility in this values-driven segment, businesses must ensure their green marketing is underpinned by structural changes in how the business operates, encouraging innovation in the business model itself.

H6: Green marketing practices positively influence sustainable business model innovation in Muslimah fashion businesses.

Sustainable Business Model Innovation and Business Outcomes

Sustainable Business Model Innovation (SBMI) refers to a firm's ability to redesign its core value creation, delivery, and capture mechanisms to generate not only economic value but also positive environmental and social value (Maselli et al., 2024). Within the context of Muslimah fashion businesses, SBMI may involve adopting circular production, integrating ethical sourcing aligned with Islamic values, and minimizing waste through zero-waste design or slow fashion principles. Implementing SBMI is expected to generate a range of business outcomes that support long-term sustainability and competitiveness.

One of the most immediate outcomes of SBMI is improved environmental performance. Firms that integrate sustainability into their core business model by redesigning products to be biodegradable, selecting low-impact materials, or rethinking manufacturing processes tend to reduce their environmental footprint. Das et al. (2025) highlight how business models that embrace eco-design and circular production significantly reduce textile waste and emissions. Similarly, De Felice et al. (2025) found that sustainable business model changes in Italian textile SMEs resulted in measurable reductions in energy use and raw material consumption.

Beyond environmental outcomes, SBMI contributes to operational resilience, defined as a firm’s capacity to withstand and recover from external disruptions (Agu et al., 2024). Resilient businesses can quickly adapt to supply chain interruptions, market volatility, and policy changes. Ortiz-Avram et al. (2024) argue that dynamic, sustainability-oriented models enable firms to respond more effectively to uncertainty by fostering flexibility and stakeholder collaboration. Imran et al. (2024) support this, showing that fashion firms with sustainable business models were better able to adjust their operations during crisis periods, such as the COVID-19 pandemic. For Muslimah fashion SMEs, which often operate in highly competitive and resource-constrained environments, this resilience is critical for continuity and growth.

SBMI also enhances brand credibility and market positioning. As consumers become more environmentally and ethically conscious, they demand authenticity and transparency in brand communication. Agu et al. (2024) argue that brands that integrate sustainability into their core identity rather than merely using it as a marketing tool build stronger consumer trust and loyalty. In the modest fashion sector, Beta (2021) found that Muslimah fashion entrepreneurs who embedded sustainability into their value proposition experienced improved customer retention, particularly among younger, values-driven segments. SBMI enables these firms to differentiate themselves by aligning with dual consumer values: modesty and environmental stewardship.

Taken together, SBMI provides a foundation for Muslimah fashion businesses to not only comply with sustainability norms but also to gain strategic advantage through improved environmental impact, greater organizational adaptability, and enhanced brand legitimacy.

H7: Sustainable business model innovation positively influences the environmental performance of Muslimah fashion businesses.

H8: Sustainable business model innovation positively influences the operational resilience of Muslimah fashion businesses.

H9: Sustainable business model innovation positively enhances the brand credibility and market positioning of Muslimah fashion businesses.

Figure 1 illustrates the research conceptual model.

Source: Authors’ own elaboration.

Descriptive Statistics and Correlations.

Table 2 presents the descriptive statistics and correlations among the study constructs. Mean scores ranged from 4.30 to 5.20 on a seven-point Likert scale, indicating moderately high agreement among respondents regarding sustainability-related practices in Muslimah fashion businesses.

Brand Credibility and Market Positioning recorded the highest mean value, M = 5.20, SD = .90, suggesting that respondents perceived their brands as relatively credible and well positioned in the market. Consumer Sustainability Expectations also showed a relatively high mean value, M = 5.10, SD = 1.00, reflecting strong perceived customer demand for sustainability-related values, transparency, and responsible fashion practices.

Institutional Stakeholder Pressure recorded the lowest mean value, M = 4.30, SD = 1.20, indicating that respondents perceived external institutional pressure for sustainability as moderate rather than strong. Nevertheless, Sustainable Design Strategy (M = 4.80, SD = 1.10) and Green Marketing Practices (M = 4.70, SD = 1.00) showed that firms actively implemented sustainability-oriented initiatives in both product development and market communication.

The standard deviations ranged from .90 to 1.20, suggesting reasonable variability in respondent perceptions. The correlations among constructs were positive and theoretically consistent, indicating that the relationships among the study variables followed the expected direction without suggesting excessive multicollinearity. Overall, the descriptive results suggest that while consumer expectations and brand credibility are relatively strong, institutional stakeholder pressure and environmental performance remain areas where sustainability adoption could be further strengthened.

Common Method Bias

The common latent factor (see Table 3) test results show that the unmeasured method factor accounted for 17.5 percent of the variance, well below the recommended threshold of 25 percent. This indicates that common method variance is not a serious concern in this study. In other words, systematic response bias is unlikely to inflate the relationships among constructs. The procedural remedies employed during survey design, such as assuring respondent anonymity and randomizing item order, combined with this statistical test, provide strong evidence that the findings are robust against common method bias.

Multivariate Normality Assessment

Before estimating the measurement and structural models, we assessed multivariate normality to determine whether the assumptions underlying covariance-based structural equation modeling were met. We used Mardia’s multivariate skewness and kurtosis statistics for this assessment. The results indicated that the data did not fully satisfy the assumption of multivariate normality. Specifically, Mardia’s multivariate skewness was significant (${\chi }^2=1,286.47$, ), and Mardia’s multivariate kurtosis was 164.38, with a critical ratio of 12.74. Because the critical ratio exceeded the recommended threshold, the data were considered non-normal.

Given this result, we re-estimated both the confirmatory factor analysis and the structural model using a bootstrap procedure with 2,000 resamples. We used bias-corrected bootstrap confidence intervals to assess the stability and statistical significance of the measurement and structural estimates. The bootstrapped CFA results showed that all standardized factor loadings remained significant and exceeded the recommended threshold of .70, indicating that the measurement model was robust to potential nonnormality. Similarly, the bootstrapped structural model produced results that were consistent with the original maximum likelihood estimates. All hypothesized paths remained statistically significant, and no confidence interval included zero. These findings indicate that the results are robust to violations of multivariate normality and provide additional confidence in the validity of the measurement and structural models.

Measurement Model

The measurement model was evaluated by examining indicator reliability, internal consistency reliability, convergent validity, discriminant validity, and overall model fit. The results indicated satisfactory reliability and convergent validity. All standardized factor loadings exceeded the recommended threshold of .70, ranging from .75 to .90, which indicates strong indicator reliability. Cronbach's $\alpha$ values ranged from .83 to .91. In contrast, composite reliability values ranged from .86 to .93, both exceeding the recommended threshold of .70. The average variance extracted values ranged from .60 to .74, surpassing the minimum criterion of .50. These results indicate that all constructs demonstrated adequate internal consistency reliability and convergent validity.

Discriminant validity was also supported. The square root of the average variance extracted for each construct exceeded its correlations with other constructs, satisfying the Fornell and Larcker criterion. For example, the square root of the average variance extracted for Sustainable Business Model Innovation was .849, which was higher than its correlations with Green Marketing Practice (.68) and Sustainable Design Strategy (.55). This indicates that each construct shared more variance with its own indicators than with other constructs. In addition, the Heterotrait Monotrait ratios ranged from .45 to .82, all below the conservative threshold of .85. For instance, the Heterotrait Monotrait ratio between Consumer Sustainability Expectations and Green Marketing Practice was .79, while the highest observed ratio, between Sustainable Business Model Innovation and Environmental Performance, was .82. These results confirm that the constructs were empirically distinct.

The measurement model also demonstrated acceptable fit to the data. Although the ${\chi }^2$ statistic was significant (${\chi }^2=512.34$, $df=248$, ), this result is expected in models with moderate sample sizes and multiple observed indicators. Therefore, we also examined alternative fit indices. The ${\chi }^2$-to-degrees-of-freedom ratio was 2.06, below the recommended threshold of 3.00. The Root Mean Square Error of Approximation was .049, indicating a close approximate fit. Incremental fit indices were also satisfactory, with Comparative Fit Index = .952 and Tucker-Lewis Index = .944, both exceeding the commonly recommended threshold of .90. The Standardized Root Mean Square Residual was .046, indicating low residual variance. Taken together, these fit indices support the measurement model’s adequacy for subsequent structural testing.

Because the multivariate normality assessment indicated deviation from normality, the measurement model was also evaluated using bootstrapping with 2,000 resamples and bias-corrected confidence intervals. The bootstrapped results confirmed the measurement model's robustness. All standardized factor loadings remained statistically significant, and no confidence interval included zero. These results indicate that the measurement model remained stable under bootstrapping and was not substantially affected by potential nonnormality in the data.

Structural Model

Before examining the hypothesized relationships, we assessed the overall fit of the structural model. The structural model demonstrated acceptable fit to the data, ${\chi }^2=548.72$, df = 263, p < .001, ${\chi }^2$/df = 2.09, RMSEA = .051, CFI = .946, TLI = .938, and SRMR = .052. Although the $\chi$-square statistic was significant, this result is common in SEM models with moderate sample sizes and multiple observed indicators. Therefore, we used alternative fit indices to evaluate model adequacy. The $\chi$-square to degrees of freedom ratio was below the recommended threshold of 3.00, the RMSEA and SRMR values indicated acceptable residual error, and the CFI and TLI values exceeded the commonly accepted threshold of .90. These results indicate that the hypothesized structural model provided an adequate representation of the observed data and was suitable for hypothesis testing.

The structural model results provided strong empirical support for the proposed hypotheses. Dynamic capabilities had significant positive effects on both sustainable design strategy (β= 0.38, CR = 6.21, p = 0.001) and green marketing practice (β= 0.35, CR = 5.87, p = 0.001), indicating that firms with stronger adaptive abilities are more likely to embed sustainability in both design and marketing practices. Consumer sustainability expectations exerted a particularly strong effect on green marketing practice (β= 0.62, CR = 9.84, p = 0.001), the most influential path among the antecedents and underscoring the critical role of consumer demand in shaping sustainability communication in Muslimah fashion businesses. Institutional stakeholder pressure was also positively related to sustainable design strategy (β= 0.55, CR = 8.92, p = 0.001), suggesting that institutional and social expectations significantly drive firms toward environmentally responsible product development.

Both sustainable design strategy and green marketing practice significantly predicted sustainable business model innovation (SBMI). Sustainable design strategy had a positive but weaker effect (β= 0.29, CR = 2.14, p = 0.032), while green marketing practice showed a stronger effect (β= 0.57, CR = 4.65, p = 0.001). This finding highlights the importance of external communication in transforming sustainability practices into business model innovations, complementing internal design efforts. SBMI, in turn, significantly improved all three performance outcomes. The model revealed that SBMI enhanced environmental performance (β= 0.74, CR = 3.91, p = 0.001), strengthened operational resilience (β= 0.81, CR = 3.24, p = 0.001), and bolstered brand credibility (β= 0.79, CR = 2.52, p = 0.012). These findings show that sustainability-rooted business model innovations not only deliver ecological benefits but also support organizational adaptability and consumer trust.

Because the multivariate normality assessment indicated deviation from normality, we further evaluated the structural paths using bias-corrected bootstrap confidence intervals based on 2,000 resamples. As shown in Table 4, all hypothesized paths remained statistically significant, and none of the 95 percent bias-corrected confidence intervals included zero. These results confirm that the hypothesized relationships are robust to potential nonnormality in the data.

The model's explanatory power was moderate to substantial. Sustainable design strategy and green marketing practice were moderately explained by their antecedents, with R² values of 0.46 and 0.58, respectively. Sustainable business model innovation was substantially explained by sustainable design and green marketing, with an R² value of 0.63. The performance outcomes also showed substantial explanatory power, with environmental performance at 0.55, operational resilience at 0.66, and brand credibility at 0.64. These results demonstrate that the model not only fits the data well but also explains meaningful proportions of variance in key sustainability and performance constructs, supporting the robustness of the proposed framework.

Alternative Model Assessment

We estimated an alternative structural model to assess the robustness and parsimony of the hypothesized indirect-effects-only model. Consistent with Zhao et al. (2010), the hypothesized model specified that dynamic capabilities, consumer sustainability expectations, and institutional stakeholder pressure influence organizational outcomes through sustainable design strategy, green marketing practices, and sustainable business model innovation, rather than through direct paths.

The alternative model added selected theoretically plausible direct paths: dynamic capabilities →sustainable business model innovation, institutional stakeholder pressure →environmental performance, consumer sustainability expectations →brand credibility, sustainable design strategy →environmental performance, and green marketing practices →brand credibility. These paths were included to test reasonable competing explanations without estimating a fully saturated model.

Both models demonstrated acceptable fit. The alternative model fit the data adequately, ${\chi }^2$ = 541.16, df = 258, p < .001, ${\chi }^2$/df = 2.10, RMSEA = .052, CFI = .947, TLI = .936, and SRMR = .051. The hypothesized model also showed acceptable fit, ${\chi }^2$ = 548.72, df = 263, p < .001, ${\chi }^2$/df = 2.09, RMSEA = .051, CFI = .946, TLI = .938, and SRMR = .052. Although the alternative model produced a slightly lower $\chi$-square value, the improvement was marginal and required additional direct paths.

As shown in Table 5, information criteria favored the hypothesized model. The hypothesized model produced lower AIC and BIC values, AIC = 684.72 and BIC = 912.34, than the alternative model, AIC = 687.16 and BIC = 931.58. Several added direct paths were also nonsignificant when the mediating variables were included. Thus, the hypothesized indirect-effects-only model was retained because it provided comparable fit with fewer estimated paths and greater parsimony.

This result supports the theoretical position that sustainable design strategy, green marketing practices, and sustainable business model innovation function as key mechanisms through which internal capabilities and external pressures translate into sustainability-related organizational outcomes. Therefore, consistent with Zhao et al. (2010), the findings support an indirect-effects-only interpretation. Dynamic capabilities, consumer sustainability expectations, and institutional stakeholder pressure do not appear to translate directly into environmental performance, operational resilience, or brand credibility. Instead, they influence outcomes through the strategic adoption of sustainable design and green marketing practices, which then translate into sustainable business model innovation and related organizational outcomes.