IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i18p8458-d1754167.html
   My bibliography  Save this article

Internal and External Drivers That Foster Sustainability—Integrated Innovation Management of Micro and SME Suppliers: A Focus on Corporate Entrepreneurship

Author

Listed:
  • Su-Yol Lee

    (College of Business Administration, Chonnam National University, Gwangju 61186, Republic of Korea)

  • Seho Jung

    (Department of Science and Technology Convergence, Chosun University, Gwangju 61452, Republic of Korea)

Abstract

Environmental, social, and governance (ESG) has increasingly received attention for its expected capacity to simultaneously enhance sustainability performance and mitigate risks among micro, small, and medium-sized enterprises (MSMEs) in supply chains. This study examines how external drivers, particularly the influences of buying firms and governments, as well as corporate entrepreneurship as an internal driver, foster MSME suppliers’ sustainability innovation management. A survey of the automobile industry in a Republic of Korea context indicates that buying firms and corporate entrepreneurship play critical roles in enhancing MSME suppliers’ sustainability innovation management. This study also reveals that corporate entrepreneurship accentuates the effects of external drivers on MSME suppliers’ sustainability innovation. Although a relationship between sustainability innovation management and operational performance was unconfirmed, this study demonstrates that corporate entrepreneurship enhances operational performance. As one of the first to explore the topic of MSME suppliers’ sustainability innovation from a corporate entrepreneurship perspective, this study has significant implications for academics, practitioners, and policymakers.

Suggested Citation

  • Su-Yol Lee & Seho Jung, 2025. "Internal and External Drivers That Foster Sustainability—Integrated Innovation Management of Micro and SME Suppliers: A Focus on Corporate Entrepreneurship," Sustainability, MDPI, vol. 17(18), pages 1-18, September.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:18:p:8458-:d:1754167
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/18/8458/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/18/8458/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Susanne Durst & Wolfgang Gerstlberger, 2020. "Financing Responsible Small- and Medium-Sized Enterprises: An International Overview of Policies and Support Programmes," JRFM, MDPI, vol. 14(1), pages 1-23, December.
    2. Sakis Kotsantonis & Chris Pinney & George Serafeim, 2016. "ESG Integration in Investment Management: Myths and Realities," Journal of Applied Corporate Finance, Morgan Stanley, vol. 28(2), pages 10-16, June.
    3. Andrea Revell & David Stokes & Hsin Chen, 2010. "Small businesses and the environment: turning over a new leaf?," Business Strategy and the Environment, Wiley Blackwell, vol. 19(5), pages 273-288, July.
    4. Samuel Drempetic & Christian Klein & Bernhard Zwergel, 2020. "The Influence of Firm Size on the ESG Score: Corporate Sustainability Ratings Under Review," Journal of Business Ethics, Springer, vol. 167(2), pages 333-360, November.
    5. Smith, Hannah & Discetti, Roberta & Bellucci, Marco & Acuti, Diletta, 2022. "SMEs engagement with the Sustainable Development Goals: A power perspective," Journal of Business Research, Elsevier, vol. 149(C), pages 112-122.
    6. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Post-Print halshs-02007374, HAL.
    7. Uma Shankar Yadav & Indrajit Ghosal & Anupam Pareek & Kritika Khandelwal & Ajay Kumar yadav & Chandra Chakraborty, 2024. "Impact of entrepreneurial orientation and ESG on environmental performance: moderating impact of digital transformation and technological innovation as a mediating construct using Sobel test," Journal of Innovation and Entrepreneurship, Springer, vol. 13(1), pages 1-41, December.
    8. Renzo Junior & Peter Best & Julie Cotter, 2014. "Sustainability Reporting and Assurance: A Historical Analysis on a World-Wide Phenomenon," Journal of Business Ethics, Springer, vol. 120(1), pages 1-11, March.
    9. Jinsung Kim & Minseok Kim & Sehyeuk Im & Donghyun Choi, 2021. "Competitiveness of E Commerce Firms through ESG Logistics," Sustainability, MDPI, vol. 13(20), pages 1-15, October.
    10. Crane, Alan D. & Koch, Andrew & Michenaud, Sébastien, 2019. "Institutional investor cliques and governance," Journal of Financial Economics, Elsevier, vol. 133(1), pages 175-197.
    11. Kaisu Puumalainen & Helena Sjögrén & Juha Soininen & Pasi Syrjä & Sascha Kraus, 2023. "Crisis response strategies and entrepreneurial orientation of SMEs: A configurational analysis on performance impacts," International Entrepreneurship and Management Journal, Springer, vol. 19(4), pages 1527-1559, December.
    12. Jeremy Galbreath, 2013. "ESG in Focus: The Australian Evidence," Journal of Business Ethics, Springer, vol. 118(3), pages 529-541, December.
    13. Amir Amel-Zadeh & George Serafeim, 2018. "Why and How Investors Use ESG Information: Evidence from a Global Survey," Financial Analysts Journal, Taylor & Francis Journals, vol. 74(3), pages 87-103, July.
    14. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Journal of Business Ethics, Springer, vol. 151(4), pages 1027-1047, September.
    15. Mojtaba Hosseini & Hossein Dadfar & Staffan Brege, 2018. "Firm-level entrepreneurship and international performance: A simultaneous examination of orientation and action," Journal of International Entrepreneurship, Springer, vol. 16(3), pages 338-368, September.
    16. Gustavo Dambiski Gomes de Carvalho & Luis Mauricio Martins de Resende & Joseane Pontes & Hélio Gomes de Carvalho & Leozenir Mendes Betim, 2021. "Innovation and Management in MSMEs: A Literature Review of Highly Cited Papers," SAGE Open, , vol. 11(4), pages 21582440211, October.
    17. Ali Saleh Alshebami, 2025. "Purpose-Driven Resilience: A Blueprint for Sustainable Growth in Micro- and Small Enterprises in Turbulent Contexts," Sustainability, MDPI, vol. 17(5), pages 1-19, March.
    18. Rory Sullivan & Andy Gouldson, 2017. "The Governance of Corporate Responses to Climate Change: An International Comparison," Business Strategy and the Environment, Wiley Blackwell, vol. 26(4), pages 413-425, May.
    19. Adelaide Martins & Manuel Castelo Branco & Pedro Novo Melo & Carolina Machado, 2022. "Sustainability in Small and Medium-Sized Enterprises: A Systematic Literature Review and Future Research Agenda," Sustainability, MDPI, vol. 14(11), pages 1-26, May.
    20. Zahra, Shaker A., 1993. "Environment, corporate entrepreneurship, and financial performance: A taxonomic approach," Journal of Business Venturing, Elsevier, vol. 8(4), pages 319-340, July.
    21. Armando Castro & Maria Gradillas Garcia, 2022. "Insights into Successful ESG Implementation in Organizations," Journal of Financial Transformation, Capco Institute, vol. 56, pages 168-176.
    22. Lee, Su-Yol & Klassen, Robert D. & Furlan, Andrea & Vinelli, Andrea, 2014. "The green bullwhip effect: Transferring environmental requirements along a supply chain," International Journal of Production Economics, Elsevier, vol. 156(C), pages 39-51.
    23. Victoria B. Nakku & Frank W. Agbola & Morgan P. Miles & Amir Mahmood, 2020. "The interrelationship between SME government support programs, entrepreneurial orientation, and performance: A developing economy perspective," Journal of Small Business Management, Taylor & Francis Journals, vol. 58(1), pages 2-31, January.
    24. Su-Yol Lee & Young-Hoon Kim, 2015. "Antecedents and Consequences of Firms’ Climate Change Management Practices: Stakeholder and Synergistic Approach," Sustainability, MDPI, vol. 7(11), pages 1-16, October.
    25. Jeffrey G. Covin & Morgan P. Miles, 1999. "Corporate Entrepreneurship and the Pursuit of Competitive Advantage," Entrepreneurship Theory and Practice, , vol. 23(3), pages 47-63, April.
    26. R. Duane Ireland & Jeffrey G. Covin & Donald F. Kuratko, 2009. "Conceptualizing Corporate Entrepreneurship Strategy," Entrepreneurship Theory and Practice, , vol. 33(1), pages 19-46, January.
    27. Robert A. Burgelman, 1983. "Corporate Entrepreneurship and Strategic Management: Insights from a Process Study," Management Science, INFORMS, vol. 29(12), pages 1349-1364, December.
    28. Tang, Jinghua & Wang, Xiaoming & Liu, Qigui, 2023. "The spillover effect of customers' ESG to suppliers," Pacific-Basin Finance Journal, Elsevier, vol. 78(C).
    29. Fahimnia, Behnam & Sarkis, Joseph & Davarzani, Hoda, 2015. "Green supply chain management: A review and bibliometric analysis," International Journal of Production Economics, Elsevier, vol. 162(C), pages 101-114.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rachana Manoj Lunawat & Mahmoud Elmarzouky & Doaa Shohaieb, 2025. "Integrating Environmental, Social, and Governance (ESG) Factors into the Investment Returns of American Companies," Sustainability, MDPI, vol. 17(19), pages 1-20, September.
    2. Liu, Xukang & Ma, Chao-Qun & Ren, Yi-Shuai, 2025. "ESG reactions to fintech: The role of cross-border capital flows," Research in International Business and Finance, Elsevier, vol. 76(C).
    3. Xiaoya Chen & Yue Song & Xueqin Hu & Guangfan Sun, 2025. "Sustainability Uncertainty and Digital Transformation: Evidence from Corporate ESG Rating Divergence in China," Sustainability, MDPI, vol. 17(14), pages 1-17, July.
    4. Hye Lim Lee & Jin Ho Hwang & Do Yeol Ryu & Jong Woo Kim, 2025. "Open‐Source Data‐Driven Prediction of Environmental, Social, and Governance (ESG) Ratings Using Deep Learning Techniques," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 32(1), March.
    5. Lennart Burger & Ivana Blažková, 2020. "Internal Determinants Promoting Corporate Entrepreneurship in Established Organizations: A Systematic Literature Review," Central European Business Review, Prague University of Economics and Business, vol. 2020(2), pages 19-45.
    6. Luo, Runmei & Ye, Yong, 2024. "Do firms listen to the ESG voices of minority investors? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    7. Hung Manh Pham & Nham Linh Vuong & Dung Viet Tran & Minh Thi Hai Ngo & Trung Tien Le, 2025. "Does environmental, social, and governance disclosure affect financial performance? An empirical study of Southeast and East Asia commercial banks," Asia-Pacific Journal of Regional Science, Springer, vol. 9(1), pages 1-26, March.
    8. Rajesh, R. & Rajeev, A. & Rajendran, Chandrasekharan, 2022. "Corporate social performances of firms in select developed economies: A comparative study," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    9. Swen Nadkarni & Reinhard Prügl, 2021. "Digital transformation: a review, synthesis and opportunities for future research," Management Review Quarterly, Springer, vol. 71(2), pages 233-341, April.
    10. Mohamed Rashwan & Nardin Farouk & Rania Pasha, 2025. "Can ESG Strategies Drive Firm Value Growth in the MENA Region?," Sustainability, MDPI, vol. 17(17), pages 1-30, September.
    11. Blomkvist, Katarina & Engzell, Jeanette & Kappen, Philip & Zander, Ivo, 2024. "How organizational conditions affect employees’ intentions to engage in intrapreneurial new venturing," Technovation, Elsevier, vol. 135(C).
    12. Stefano D’Angelo & Angelo Cavallo & Antonio Ghezzi & Francesco Di Lorenzo, 2024. "Understanding corporate entrepreneurship in the digital age: a review and research agenda," Review of Managerial Science, Springer, vol. 18(12), pages 3719-3774, December.
    13. Pruthiranjan Dwibedi & Debasis Pahi & Antarjyami Sahu, 2024. "Mapping the landscape of environmental, social and governance research: A bibliometric analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 3745-3767, September.
    14. Natalia Semenova, 2021. "Management control systems in response to social and environmental risk in large Nordic companies," International Journal of Corporate Social Responsibility, Springer, vol. 6(1), pages 1-11, December.
    15. Tan, Yafei & Zhu, Zhaohui, 2022. "The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness," Technology in Society, Elsevier, vol. 68(C).
    16. Adam Arian & John Sands & Stuart Tooley, 2023. "Industry and Stakeholder Impacts on Corporate Social Responsibility (CSR) and Financial Performance: Consumer vs. Industrial Sectors," Sustainability, MDPI, vol. 15(16), pages 1-21, August.
    17. Donald F. Kuratko & R. Duane Ireland & Jeffrey G. Covin & Jeffrey S. Hornsby, 2005. "A Model of Middle–Level Managers’ Entrepreneurial Behavior," Entrepreneurship Theory and Practice, , vol. 29(6), pages 699-716, November.
    18. Maria de Lurdes Calisto & Soumodip Sarkar, 2017. "Innovation and corporate entrepreneurship in service businesses," Service Business, Springer;Pan-Pacific Business Association, vol. 11(3), pages 581-600, September.
    19. Arthur, Joseph & Bilson Darku, Francis & Owusu, Abena Fosua, 2025. "Does corporate ESG news impact firm productivity?," Finance Research Letters, Elsevier, vol. 75(C).
    20. Bolognesi, Enrica & Burchi, Alberto & Goodell, John W. & Paltrinieri, Andrea, 2025. "Stakeholders and regulatory pressure on ESG disclosure," International Review of Financial Analysis, Elsevier, vol. 103(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:18:p:8458-:d:1754167. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.