Impact of Social and Environmental Practices on SME Business Performance
Abstract
Influence of social and environmental practices in driving business
growth in case of big companies is evident. However for small and medium
enterprises these aspects of business operations are grossly neglected.
SMEs contribute immensely to the economic progress of a country. But a
large percentage of the SMEs fail within few years of incorporation. In
our paper we have tried to develop a model taking a sample of 200 SMEs
from Indian leather and chemical sectors and find out how factors like
collaborative approach of operation at industry level and government
intervention at policy level impact their sustainability performance and
how in turn their improved social and environmental performance help
them to drive sustainable business growth. Empirical results of our
study reveal that both government intervention and collaborative
operation positively influence the firm's sustainability performance and
in turn company's business performance is positively impacted by
enhanced sustainability performance. Company size was found to have a
moderating effect on this relationship