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

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.