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Abstract Frugal innovation through frugal functionality, frugal cost, and frugal ecosystems that reduce goods to their essential features has emerged as a highly effective method to improve sustainable development across societies, in developed countries as well as in developing countries. Drawing on social exchange theory and effectuation theory, this study examines the indirect effect of diversified knowledge sharing on the relationship of sustainability-oriented leadership with frugal innovation and the conditional role of entrepreneurial bricolage. The study utilized data collected from 223 representatives of small and medium enterprises in Poland. Partial least squares structural equation modelling was used to test the proposed hypotheses. The results confirmed that sustainability-oriented leadership indirectly and significantly affects frugal functionality and costs through both internal and external diversified knowledge sharing. Yet, internal diversified knowledge sharing does not mediate the sustainability-oriented leadership–frugal ecosystem relationship. The findings show that the sustainability-oriented leadership–external diversified knowledge sharing relationship amplifies with increasing values of entrepreneurial bricolage. However, the sustainability-oriented leadership–internal diversified knowledge sharing relationship does not change in the presence of entrepreneurial bricolage. This pioneering study explores the interactions between sustainability-oriented leadership, entrepreneurial bricolage, and internal as well as external diversified knowledge sharing with regards to frugal innovation. It uncovers the underlying processes of frugal innovation and improved frugal innovation performance, facilitates the integration of knowledge, recognises successful approaches to leadership, creates initiatives for leadership development, and offers actionable insights for organisations aiming to cultivate frugal innovation.
Iqbal et al. (Wed,) studied this question.