Impact of Sustainability Pressure on SME Performance: The Mediating Role of Sustainable Leadership, Triple Bottom Line, and Sustainable Procurement

Dien Dinasty Widyasari and Anjar Priyono
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Dien Dinasty Widyasari: Department of Management, Universitas Islam, Yogyakarta, Indonesia.
Anjar Priyono: Department of Management, Universitas Islam, Yogyakarta, Indonesia.

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Abstract: This study examines how sustainable leadership and competitive pressure relate to SME performance through triple bottom line (TBL) performance and sustainable procurement in the Special Region of Yogyakarta, Indonesia. Using a quantitative explanatory design, data from SME owners and managers were analysed using partial least squares structural equation modelling (PLS-SEM). The findings indicate that sustainable leadership positively influences TBL performance and shows a marginal positive relationship with sustainable procurement. Competitive pressure positively influences TBL performance but does not have a statistically significant direct effect on sustainable procurement. TBL performance positively influences sustainable procurement, and sustainable procurement positively influences SME performance. Mediation analysis shows that sustainable procurement significantly mediates the relationships between competitive pressure and SME performance and between TBL performance and SME performance. However, it does not significantly mediate the relationship between sustainable leadership and SME performance. These findings suggest that sustainable procurement functions as an important operational mechanism through which sustainability-related conditions may be translated into SME performance, although its mediating role differs across antecedents. The study contributes to the sustainability and SME literature by integrating internal leadership orientation, external competitive pressure, multidimensional sustainability performance, and procurement practices within a single empirical framework. The results also indicate that sustainability-related drivers should not be assumed to influence SME performance through identical operational pathways.

Date: 2026-10-07
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Published in Journal of Global Economics, Management and Business Research, 2026, 18 (3), pp.463-483

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05786217

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