Abstract
Small- and medium-sized enterprises (SMEs) contribute enormously to a country’s sustainable growth. Developing the pathways that lead to sustainable innovation in SMEs represents an important aspect of the business world and society. The aim of this article is to verify the relations and pathways that lead to sustainable product innovation performance while considering all three pillars of the Triple Bottom Line Approach. This study used a mixed methods approach to identify the antecedents of sustainable product innovation performance. Our approach applied structural equation modeling and fuzzy-set qualitative comparative analysis. The structural equation model was used to measure the effects of the three pillars of the triple bottom line: economic, social, and environmental developments. The structural equation model was also designed to account for the firm’s type (Public Limited Companies vs. General Partnerships). Using the structural equation model, we determined whether a firm’s type moderates the effects of the three pillars. Furthermore, using fuzzy-set qualitative comparative analysis, we identified alternative configurations of conditions and determined those that are likely to lead to sustainable product innovation performance and those that result in its absence. The sample comprises data from 349 Portuguese small and medium enterprises. The findings show that social and environmental developments are two important antecedents for product innovation performance, and they contribute to different pathways that lead to product innovation performance. In addition, in General Partnerships, human resource costs are important for sustainable product innovation performance. Therefore, the results of both the quantitative and qualitative analyses underline the relevance of the triple bottom line approach to product innovation performance.
Highlights
The aim of this study is to answer three research questions: How are economic, social, and environmental aspects balanced in innovation activities? What is needed to make the triple bottom line approach more effective? Does a firm’s legal form affect its commitment toward sustainable innovation?
The previous arguments emphasize that more research is needed to fully comprehend the interrelated nature of firms’ innovation dynamics and sustainability
The firm’s organizational structure and its type can affect the adoption of environmental practices and sustainable product innovation performance (PIP)
Summary
These research questions are very interesting to the business world because their answers can facilitate an understanding of the key processes and pathways that allow companies to manage and integrate the three development goals with the most common innovation dynamics, e.g., knowledge search strategies and human resource management. The PRAC of SMEs is significantly different from that of large companies as a result of several peculiarities: owners directly manage most SMEs; they are tightly linked to business partners and the local community; and they have financial, human, and time resource limitations that can hinder the implementation of PRAC commensurate to larger firms [5] For these reasons, this study used a sample of Portuguese SMEs. This study addressed sustainable paths for two SME types: Public Limited Companies (PLC) and General Partnerships (GP)
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