Do sustainability innovation and firm competitiveness help improve firm performance? Evidence from the SME sector in vietnam
28/12/21 04:30PM
Thanh Tiep Le, and Muhammad Ikram. Sustainable Production and Consumption, 29: 588-99, 2022.
Abstract:
This study unfolds the nexus between sustainability innovation, firm
performance of small- and medium-sized enterprises (SMEs) by exploring
the mediating role of firm competitiveness in the context of an emerging
market. This study adopts a systematic literature review approach which
results in arguing that this relationship is not explored in-depth in
current literature. This is especially more critical for emerging
economies as current literature shows a lack of empirical research in
this research topic. A well-structured questionnaire was administrated
for data collection. A total of 435 valid responses from top executives,
managers, and experts were received and used for data analysis.
Structural equation modeling (SEM) was used to investigate the
relationships between constructs and latent variables. Our findings
reveal that there is a significant and positive relationship among
sustainability innovation and firm competitiveness. Firm competitiveness
has a positive and significant relationship with financial,
environmental, and operational performance. Moreover, sustainability
innovation had an indirect positive and significant effect on financial
performance. The statistical results indicate that the indirect effects
are all significant (sig. < 0.05) and the order of these indirect
effects is consistent with those of direct effects of firm
competitiveness on firm performance dimensions. Stakeholder theory is
applied to check how firm competitiveness helps improve the performance
of SMEs. To the best of our knowledge this study is the first that
explores the mediating role of firm competitiveness between
sustainability innovation and SMEs’ performance. Based on the context of
the influence of the COVID-19 pandemic, this study presents
implications for entrepreneurs and top management with respect to
strategic perspectives to drive their businesses in a sustainable
direction.
