Determinants of environmental, financial, and social sustainable performance of manufacturing SMEs in Malaysia

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, finan-cial, 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 impor-tance 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 inno-vation, leadership commitment, and market orientation. Green entrepreneurial orientation and market orienta-tion 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 entre-preneurial 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 entrepre-neurial orientation as the most significant determinants.Crown Copyright (c) 2022 Published by Elsevier Ltd on behalf of Institution of Chemical Engineers. All rights reserved.