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This study investigates how adaptive, absorptive, and innovative capabilities, grounded in dynamic capabilities theory, foster sustainable development across social, economic, and environmental dimensions in small and medium-sized enterprises (SMEs) in the transportation sector (transportation SMEs). Addressing the dual challenges of resource constraints and sustainability outcomes, the research employs partial least squares structural equation modeling to analyze data from 504 transportation SMEs in Ho Chi Minh City, Vietnam, collected between January and December 2023 through stratified probability sampling. Results indicate that adaptive capability enhances social development, primarily through data-sharing, effective decision making, and proactive resource management. Absorptive and innovative capabilities significantly promote environmental development—absorptive through knowledge integration and managerial support, and innovative through service and brand-oriented innovation. However, neither absorptive nor innovative capability affects social development, and none of the three capabilities significantly influence economic development. This study contributes to the limited empirical literature on dynamic capabilities in developing economies by clarifying the mechanisms through which adaptive capability fosters social development and absorptive and innovative capabilities support environmental outcomes.
Hanh et al. (Fri,) studied this question.