Is sustainability a competitive advantage for small businesses? An empirical analysis of possible mediators in the sustainability–financial performance relationship

Is sustainability a competitive advantage for small businesses? An empirical analysis of possible... The contribution of a single firm to sustainable development is largely dependent on the firm's perceptions of the advantages of sustainability strategies and consequent practices. The relationship between corporate social performance and corporate financial performance has been heavily debated, with mixed results.Our research is aimed at defining a model in which sustainability practices affect firm financial performance via strategic drivers or antecedents of firm success. We used structural equation modeling on data collected via survey of 348 Italian manufacturing small and medium-sized enterprises. We included four constructs dedicated to sustainability, a construct dedicated to financial performance and four constructs measuring the possible mediators in the sustainability-financial performance relationship.We found that the social, economic and formal practices dimensions of sustainability positively affect competitive advantage, mediated by corporate reputation, customer satisfaction and organisational commitment. We also found competitive advantage to be a second-stage mediator that positively contributes to financial performance.The contribution of our study lies in having tested a new model of the sustainability-financial performance relationship, considering each dimension of sustainability and a path through different mediators in an under-explored context—that of manufacturing small businesses in a European country. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Cleaner Production Elsevier

Is sustainability a competitive advantage for small businesses? An empirical analysis of possible mediators in the sustainability–financial performance relationship

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Publisher
Elsevier
Copyright
Copyright © 2018 Elsevier Ltd
ISSN
0959-6526
D.O.I.
10.1016/j.jclepro.2018.02.016
Publisher site
See Article on Publisher Site

Abstract

The contribution of a single firm to sustainable development is largely dependent on the firm's perceptions of the advantages of sustainability strategies and consequent practices. The relationship between corporate social performance and corporate financial performance has been heavily debated, with mixed results.Our research is aimed at defining a model in which sustainability practices affect firm financial performance via strategic drivers or antecedents of firm success. We used structural equation modeling on data collected via survey of 348 Italian manufacturing small and medium-sized enterprises. We included four constructs dedicated to sustainability, a construct dedicated to financial performance and four constructs measuring the possible mediators in the sustainability-financial performance relationship.We found that the social, economic and formal practices dimensions of sustainability positively affect competitive advantage, mediated by corporate reputation, customer satisfaction and organisational commitment. We also found competitive advantage to be a second-stage mediator that positively contributes to financial performance.The contribution of our study lies in having tested a new model of the sustainability-financial performance relationship, considering each dimension of sustainability and a path through different mediators in an under-explored context—that of manufacturing small businesses in a European country.

Journal

Journal of Cleaner ProductionElsevier

Published: May 1, 2018

References

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