The Triple Bottom Line on Sustainable Product Innovation Performance in SMEs: A Mixed Methods Approach

Abstract

Small- and medium-sized enterprises (SMEs) contribute enormously to a country’s sustainable growth. Developing the pathways that lead to sustainable innovation in SMEs represents an important aspect of the business world and society. The aim of this article is to verify the relations and pathways that lead to sustainable product innovation performance while considering all three pillars of the Triple Bottom Line Approach. This study used a mixed methods approach to identify the antecedents of sustainable product innovation performance. Our approach applied structural equation modeling and fuzzy-set qualitative comparative analysis. The structural equation model was used to measure the effects of the three pillars of the triple bottom line: economic, social, and environmental developments. The structural equation model was also designed to account for the firm’s type (Public Limited Companies vs. General Partnerships). Using the structural equation model, we determined whether a firm’s type moderates the effects of the three pillars. Furthermore, using fuzzy-set qualitative comparative analysis, we identified alternative configurations of conditions and determined those that are likely to lead to sustainable product innovation performance and those that result in its absence. The sample comprises data from 349 Portuguese small and medium enterprises. The findings show that social and environmental developments are two important antecedents for product innovation performance, and they contribute to different pathways that lead to product innovation performance. In addition, in General Partnerships, human resource costs are important for sustainable product innovation performance. Therefore, the results of both the quantitative and qualitative analyses underline the relevance of the triple bottom line approach to product innovation performance.