Abstract

Although sustainable development is increasingly prioritised, many entrepreneurs remain skeptical about the appropriateness of sustainable practices for small and medium enterprises (SMEs), questioning the value of adopting green initiatives. Grounded in the resource-based view, this study investigates the mediating role of sustainable development practices in linking entrepreneurial and international orientations and business performance in SMEs. Data were gathered from 105 SME owners and senior managers across multiple sectors using the drop-off and pick-up method and analysed using partial least squares (PLS) path modelling. The findings reveal that sustainable practices play a critical mediating role in enhancing business performance. Specifically, entrepreneurial orientation positively influences business performance indirectly through engagement in sustainable development practices, while international orientation does not produce a similar effect. This highlights the importance of aligning entrepreneurial traits, such as innovation, proactiveness, and risk-taking, with sustainability-oriented strategies. Additionally, the model’s predictive capability was assessed, and the study provides both theoretical insights into the mediating mechanisms of sustainability and practical recommendations for SMEs aiming to adopt sustainable business practices.