Determinants of environmental, financial, and social sustainable performance of manufacturing SMEs in Malaysia
Sustainable Production and Consumption
School of Business and Law
Discovering the determinants of firm sustainable performance from the Small and Medium-sized Enterprises (SMEs) perspectives is essential. However, few studies have empirically examined all three environmental, financial, and social pillars of sustainable performance into a single research framework in the context of emerging economies like Malaysia. Drawing on the resource-based view and institutional theory, this study identified the determinants of environment, financial, and social sustainable performance of manufacturing SMEs. Data was collected from 209 Malaysian manufacturing firms. A hybrid approach of structural equation modeling (SEM) - artificial neural network (ANN) was used to assess the hypotheses and predict the level of their importance toward sustainable performance. Results showed that green entrepreneurial orientation, green innovation, leadership commitment, stakeholder pressure, and market orientation positively and significantly influenced social performance. Environmental performance was predicted by green entrepreneurial orientation, green innovation, leadership commitment, and market orientation. Green entrepreneurial orientation and market orientation demonstrated a positive influence on financial performance. Results of ANN showed that leadership commitment is the most significant factor influencing environmental and social performance while green entrepreneurial orientation is the first ranked factor predicting financial performance. These findings extend the knowledge by shedding light on the determinants of SMEs' sustainable performance. The study enables SMEs to take proper actions in response to sustainability development. Besides, the findings assist practitioners and policymakers in setting effective plans by giving more attention to leadership commitment and green entrepreneurial orientation as the most significant determinants.
Yadegaridehkordi, E., Foroughi, B., Iranmanesh, M., Nilashi, M., & Ghobakhloo, M. (2023). Determinants of environmental, financial, and social sustainable performance of manufacturing SMEs in Malaysia. Sustainable Production and Consumption, 35, 129-140. https://doi.org/10.1016/j.spc.2022.10.026