Network and government intervention influencing sustainability and business growth of SMEs: a study with Indian MSMEs

Abstract

The role of corporate sustainability in driving business performance has been well researched in case of big corporations for developed nations. But in the case of small and medium enterprises (SMEs) very limited research has been conducted to explore the business benefit derived out of sustainable business practices. In spite of their contribution to the economy, most of the SMEs fail to maintain a sustainable growth path in the long run. The current paper tries to estimate how effective utilisation of their business network and government intervention influences the growth of SMEs through their sustainability performance. A self-administered questionnaire was developed and responses were collected from 200 SMEs in and around Kolkata. The data was analysed using partial least square techniques of structural equation modelling in SPSS. Results showed that both government intervention and network utilisation positively influence business growth of SMEs through their social and environmental sustainability. Also, the size of capital investment has a moderating effect on the strength of this relationship. The practical implication of the model in the Indian context has also been discussed along with future research possibilities.