Corporate Sustainability Orientation, Sustainable Development Practices, and Firm Performance of MSMEs in Malaysia.

Abstract

Over the past two years, the Covid 19 pandemic was the greatest communicable outbreak that has upended almost every aspect of our lives. Despite this, the progress in realizing sustainable development remains as a challenge in the global perspective and yet it should be eliminated. The world is facing a pragmatic threat of climate change which potentially damage the Earth’s ecosystems. There is a need for all relevant parties to cooperatively care for the environment in decreasing the environmental degradation and climate change in achieving sustainability to leave no one left behind. Our study highlights the perception of the firm at firm-level that can link environmental sustainability practices and firm performance, especifically in the Micro, Small and Medium Enterprises (MSMEs). Hence, in this study, we will examine how corporate sustainability orientation influences firm performance, and how corporate sustainability orientation influences firm performance through environmental practices with the use of the Natural Resource-based View (NRBV) theory and Stakeholder theory. This study uses a judgmental sampling method with a set of criteria to have an accurate result for the study. A total of 219 responses were collected and this study uses a Partial Least Squares – Structural Equation Modeling (PLS-SEM) approach in data analysis. From the analysis, both corporate sustainability orientation and environmental practices were found significant, while the relationship between corporate sustainability orientation and firm performance was found significant through the indirect effect. For future studies, this study suggests researcher to explore corporate sustainability orientation in the perspective of firm-level and individual-level to have a comparison in terms of perception towards sustainability practices and how it impacts the firm performance.