<![CDATA[Purpose – This study examines how green innovation can be translated into a competitive advantage for micro, small and medium-sized enterprises (MSMEs) through the institutionalisation of sustainable practices. This study is motivated by the continuing conceptual overlap between green innovation and sustainable practices, as well as a tendency in the literature to describe the relationship between the two as one of influence or mediation without this always being supported by appropriate research designs. Design/methodology/approach – The study employs a qualitative approach using library research. Data were obtained from scientific journal articles, academic books, and relevant publications from the period 2015–2026 that discuss green innovation, sustainable practices, competitive advantage, MSMEs, and the Natural-Resource-Based View (NRBV). The data were analysed using thematic analysis through identification, categorisation, comparison, and conceptual synthesis. Findings/Results– The research findings indicate that green innovation acts as a catalyst for change, whilst sustainable practices serve to routinise and institutionalise that change. This process has the potential to build capabilities in pollution prevention, product stewardship and sustainable development, which in turn support cost efficiency, differentiation, reputation, learning and market access. Originality/Value – This study presents a conceptual framework comprising green innovation, sustainable practices, environmental capabilities and competitive advantage. This framework clarifies the boundaries between these constructs and provides a basis for further empirical testing amongst Indonesian MSMEs.]]>
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