Institutions and Sustainability Entrepreneurship in SMEs: A Conceptual Model

The government has integrated sustainability management into its agenda to rectify environmental degradation. A new study called “sustainability entrepreneurship”, which relates sustainability management with entrepreneurial endeavors has also been established. Sustainability management is crucial because it allows small and medium enterprises (SMEs) to develop competitive advantages by fulfilling customers’ demand for sustainable products. However, the participation of SMEs in sustainability management is low and many of them fail to disclose their environmental information. This phenomenon has caused problems in encouraging sustainability management commitment among SMEs and failure in achieving 17 Sustainable Development Goals (SDGs). Therefore, this paper aims to unravel the relationships of institutional elements on proclivity on sustainability entrepreneurship among SMEs. Based on a review of existing literature on Institutional factors, a proposed model was developed to assess proclivity towards sustainability entrepreneurship among SMEs. The result of this study would be useful to create the knowledge of institutional theory and the actual behavior of proclivity of sustainability entrepreneurship, to create new knowledge in the future. This research contributes to universities, policymakers and business practitioners. As for universities, it helps to develop a new model to enrich the literature in entrepreneurship studies. In terms of policymakers and business practitioners, it helps to identify important factors in developing true sustainability entrepreneurs among SMEs.