Antecedents of Urban Sustainability and Firm Performance: Moderating Role of Conservation Innovation

Abstract

This study examines into how conservation innovation affects the relationship between firm performance and urban sustainability in Sri Lankan SMEs. Given the growing emphasis on environmental sustainability around the world, this study aims to comprehend how sustainability affects the performance of enterprises focusing to gain a competitive advantage. A structured questionnaire was circulated to mid-level and senior managers of 16 small and medium-sized enterprises in Sri Lanka, and 315 responses were obtained for analysis as part of the quantitative study design. The study examined the suggested hypotheses based on resource-based theory using SmartPLS 3.0 for data analysis. The results show a strong positive relationship between firm performance and urban sustainability, underscoring the need of incorporating urban sustainability. However, the relationship between urban sustainability and performance outcomes is greatly moderated by conservation innovation, even if it has a direct impact on firm performance. These results imply that, even in the absence of a moderating influence from conservation innovation, SMEs in Sri Lanka can enhance performance by embracing urban sustainability. In order to serve the larger objective of urban sustainability in Sri Lanka, the study ends by providing practical suggestions for business professionals and politicians to promote firm urban sustainability.