Sustainability competence in small and medium exporters: Determinant and outcomes

Abstract The pursuit of sustainability has become critical for exporting small and medium enterprises (SMEs), driven by stakeholder pressure and international buyer requirements. This poses challenges to their survival and performance in international markets. Drawing on the capabilities perspective, the present research pioneers the study of this issue by proposing and empirically validating a theoretical framework for the determinant and outcomes of sustainability competence in exporting SMEs. Results from 673 SMEs demonstrate that sustainability orientation drives the configuration of sustainability competence, resulting in enhanced environmental and market performance. Market performance (market legitimacy and brand equity) significantly enhances financial performance, emphasizing the importance of customer satisfaction and investor support. Although no direct causal relationship exists between environmental performance and financial performance, a significant positive correlation is observed. This study thus provides avenues for further research on factors, mechanisms, and contingencies influencing the relationship between environmental performance and financial performance in exporting SMEs.