A Literature Review on Factors Influencing the Green Innovation Adoption and Future Research Directions

Green innovation (GI) has become a critical strategy for enhancing sustainability and competitiveness among Small and Medium-sized Enterprises (SMEs). This study conducts a systematic literature review of 47 peer-reviewed articles published between 2020 and 2025 to synthesize current knowledge on the drivers, barriers, and contextual factors influencing GI adoption in SMEs. Guided by the PRISMA 2020 protocol, the review integrates bibliometric analysis using VOSviewer to map research trends and disciplinary directions. Findings reveal five major categories of determinants: organizational capabilities, external institutional pressures, technological readiness, stakeholder influence, and resource availability. Despite growing attention to GI, significant gaps remain, particularly in theoretical integration, SME-specific evidence from developing economies, and the use of advanced longitudinal and mixed-method approaches. Methodologically, PLS-SEM dominates empirical studies, complemented by econometric models and emerging hybrid techniques such as SEM–ANN. The review highlights the need for deeper exploration of GI as a mediating mechanism, stronger contextual diversification, and broader performance measurements beyond self-reported indicators. This study contributes a comprehensive conceptual framework and outlines future research directions to strengthen the understanding of GI adoption in SMEs.