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Sustainable development in Asian manufacturing SMEs: Progress and directions
Journal Pre-proof Sustainable Development in Asian Manufacturing SMEs: Progress and Directions
Ana Beatriz Lopes de Sousa Jabbour, Nelson Oly Ndubisi, Bruno Michel Roman Pais Seles PII:
S0925-5273(19)30410-4
DOI:
https://doi.org/10.1016/j.ijpe.2019.107567
Reference:
PROECO 107567
To appear in:
International Journal of Production Economics
Received Date:
11 July 2019
Accepted Date:
29 November 2019
Please cite this article as: Ana Beatriz Lopes de Sousa Jabbour, Nelson Oly Ndubisi, Bruno Michel Roman Pais Seles, Sustainable Development in Asian Manufacturing SMEs: Progress and Directions, International Journal of Production Economics (2019), https://doi.org/10.1016/j.ijpe. 2019.107567
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Journal Pre-proof Sustainable Development in Asian Manufacturing SMEs: Progress and Directions
Ana Beatriz Lopes de Sousa Jabbour* (corresponding author) Montpellier Business School 2300, Avenue des Moulins. 34185 Montpellier Cedex 4 – France E-mail: [email protected] Prof. Nelson Oly Ndubisi College of Business & Economics Qatar University Qatar Email: [email protected]
Bruno Michel Roman Pais Seles Sao Paulo State University Av. Eng. Luiz Edmundo C. Coube 14-01. 17033-360 – Bauru/São Paulo E-mail: [email protected]
Journal Pre-proof Sustainable Development in Asian Manufacturing SMEs: Progress and Directions Abstract This article identifies the factors that influence the environmental, social and financial performance of small and medium-sized enterprises (SMEs) in the manufacturing sector in Asia. Asian SMEs play an important role in both economic growth and the achievement of the region’s sustainable development goals. For example, SMEs are key to employment creation and income distribution, and crucial to the growth of Asian exports. However, SMEs are also responsible for a large part of the world’s consumption of resources, air and water pollution, and waste generation. Therefore, this article identifies and discusses the factors which contribute to Asian manufacturing SMEs’ pursuit of sustainable development. An integrative literature review is conducted, and identifies that innovation and entrepreneurial orientation, governmental actions, and lean manufacturing systems are some of the prominent factors which drive Asian SMEs’ financial, social and environmental performance. In addition, this article outlines future research avenues which could support Asian SMEs to move towards fully functioning sustainable development performance. Keywords: Sustainability, Sustainable performance, Small and medium manufacturing enterprises, SMEs, Asia. 1. Introduction As Asian countries have increasingly come to prominence in the global economy, small and medium-sized enterprises (SMEs), in particular, are playing an important role in increasing the economic performance of these countries (Harvie and Lee, 2002; Budhwar et al., 2016). According to the Organization for Economic Co-operation and Development (OECD, 2005), SMEs are non-subsidiary independent enterprises, where the salient features are number of employees and extent of financial assets. SMEs are distinguished from larger enterprises by their “reactive, fire-fighting mentality, resource limitations, informal strategies, and flexible structures” (Terziovski, 2010, p892). Despite these characteristics SMEs are fundamental for achieving and sustaining growth and performance across Asian countries and are key to the competitive capacity of these countries. They directly contribute to employment creation and income
Journal Pre-proof distribution, reducing poverty which in turn improves sustainable development in developing countries in Asia SME manufacturers are crucial to the growth of Asian exports (Harvie and Lee, 2002; Harvie and Lee, 2005, Tambunan, 2009; Budhwar et al., 2016). Furthermore, Asian manufacturing SMEs offer cheaper products than their counterparts in other countries (Terziovski, 2010). However, it has been documented that SMEs in the manufacturing sector are responsible for a large part of the world’s consumption of resources, air and water pollution, and waste generation (Ndubisi et al. 2019). According to Ndubisi et al. (2019), the aggregate environmental damage caused manufacturing SMEs in some sectors exceeds that of their larger counterparts, even though their individual environmental footprint may relatively be low. Therefore, SMEs “must use resources efficiently and economic growth must be done in harmony with the environment” (Ndubisi, 2008, p164) in order to achieve sustainable development. SMEs must therefore address the issue of corporate sustainability (Morsing and Perrini, 2009). Across Asia, local and national governments are promoting environmental programs and policies in order to reduce waste, tackle air pollution and increase the use of renewable energy sources (Tseng et al., 2013). One recent example is the ban on plastic bags introduced by several Asian governments, including Bangladesh, China, Israel, Western India, Malaysia, Taiwan, and Singapore (Sterbentz, 2008). Such decisions are based on the evidence that these bags end up in landfill, or in one of the Pacific gyres (circular systems of ocean currents comprising a substantial part of the Pacific Ocean). Nevertheless, according to the Asian Development Bank (2017), some countries across the Asia-Pacific region still face difficulties in achieving sustainable development goals, in terms of responsible consumption and production. For example, this region uses twice the amount of raw materials to produce one unit of GDP in comparison with other regions, which has severe environmental repercussions and leads to a scarcity of natural resources. Private businesses contribute both positively and negatively to the achievement of Asian SME sustainable development goals (United Nations, 2017). Hofmann et al. (2012) state that technological and relational capabilities play an important role in supporting SMEs to pursue corporate sustainability. As SMEs tend to be entrepreneurial, they are generally engaged in environmental sustainability practices and, as a consequence, have a sustainable competitive advantage (Roxas, et al., 2017). Thus, considering the importance of SMEs to the Asian economy, and the pivotal role of
Journal Pre-proof private businesses in achieving sustainable development, it is vital to analyze their performance characteristics, such as sustainability performance. Considering the above, this article proposes the following research question:
According to the current literature, which factors influence the environmental, social and financial performance of small and mediumsized manufacturing firms in Asia?
Consequently, the research objective of this study is:
To analyze the factors that influence the environmental, social and financial performance of small and medium-sized manufacture firms in Asia.
To achieve this objective, an integrative literature review has been adopted as the research method for this study (Huisingh, 2012). The main contribution of this work is its identification and examination of the factors that may, positively or negatively, influence the environmental, social and financial performance of small and medium sized manufacturing enterprises in Asia. This article highlights that these factors are related both to the firms’ internal characteristics and to external factors related to the institutional environment. The article is structured as follows. The next section presents the theoretical background. The research method is outlined in Section 3, and Section 4 presents the results of the integrative literature review. Finally, Section 5 gives the research analysis and conclusions. 2. Theoretical Background: Asian SMEs and Sustainable Development Many Asian countries are important players in the global economy, and their influence on the world economy has increased over recent years (Budhwar et al., 2016). SMEs have expanded rapidly in Asia over the past twenty years. However, as this region is remarkable for its economic diversity, these SMEs exist in different stages of development, and differ in their contributions to the region’s economy (Harvie and Lee, 2002). According to the Organization for Economic Cooperation and Development’s (OECD) 2016 report, SMEs are the predominant form of enterprise, comprising approximately 99% of all firms. Across developing countries in Asia, SMEs play an important role, contributing to employment creation, income distribution, poverty reduction and the growth of manufactured exports, as well as the development of
Journal Pre-proof entrepreneurship, manufacturing industry, and rural economy (Tambunan, 2009). For example, SMEs account for over half of all employment (IFC, 2010). According to the literature, in some sub-regions SMEs contribute to achieving and sustaining growth and performance in their economies, and are fundamental to the competitive edge of some Asian economies in the global market (Harvie and Lee, 2005). Considering the importance of SMEs to the Asian economy, it has never been more important to analyze their performance characteristics, sustainability performance in particular. According to the Asian Development Bank (2017), financial support for SMEs could help tackle climate breakdown in Asia. Due to a series of severe environmental accidents and the consequent emergence of strict environmental legislation, the period from the late 1960s to the 1980s was marked by an increased concern for the preservation of natural resources (McAloone and Pigosso, 2017; Skanavis et al., 2005). As a consequence, organizations started to integrate sustainability into their business practices, and to move towards sustainable development. In terms of sustainability, businesses tend to move from a reactive phase to a more proactive one (McAloone and Pigosso, 2017). The sustainability performance of a firm includes financial performance, social performance and environmental performance. A firm’s financial performance reflects its profitability and can be affected by diverse factors, such as concentration and growth, or firm size (Capon et al., 1990). Social and environmental performance are related to social practices and initiatives, driven by corporate social responsibility or adoption of environmentallyfriendly practices (Zhu and Sarkis, 2004; González-Benito and González-Benito, 2006; Muñoz-Villamizar et al., 2018). In the case of corporate social responsibility, firms not only have economic and legal obligations, but also ethical and discretionary responsibilities (Carroll, 1999); social performance is based on the fulfillment of these responsibilities. Environmental performance is based on the reduction of resource consumption, as well as the reduction of solid and water waste, environmental accidents and polluting emissions (Zhu and Sarkis, 2004; González-Benito and González-Benito, 2006). Observing and recording the environmental performance of Asian manufacturing SMEs is imperative, and in light of recent evidence, monitoring of the two largest countries in the region (China and India) is particularly crucial. For example, a study in India documents cases of tanner effluent being released by manufacturing SMEs engaged in leather goods production, which created serious problems for local neighborhoods
Journal Pre-proof (Shanker, 2001). A similar record of poor environmental performance is reported in relation to the textile bleaching industry (Ndubisi, 2008). In China, the foundry industry, comprising a large number of SMEs, is considered a ‘red category’ (highly polluting) industry, with very high smoke and dust particle emissions (Ndubisi, 2008, p 8). Mining is another industry of concern, with some 20,000 small mines, coke and steel mills having been closed by the Chinese government (Hu et al., 2008) due to their negative environmental impact. Consequently, some Asian governments have enacted laws such as the Cleaner Production Law, the Law on the Prevention of Radioactive Pollution, and the Environmental Impact Assessment Law. 3. Research Method The research method adopted in this article is an integrative literature review (Huisingh, 2012). This method was applied by Junior and Filho (2010), and other studies have used a similar approach; for instance, Jabbour (2013), Mariano et al. (2015) and Seuring and Muller (2012), with an in-depth examination provided by Gaur and Kumar (2018). The steps followed in this integrative literature review are outlined in Figure 1. All the steps presented in Figure 1 are explained in the following subsections. Figure 1 – Steps followed in the integrative literature review
Step 1 – Definition of the research question
Step 2 – Definition of the general and specific objectives
Step 4 – Definition of the combinations of keywords and searching of databases
Step 3 – Definition of the Inclusion Criteria (IC)
Step 5 – Definition of the Search Filters (SF1 and SF2)
Step 6 – Article selection by reading the title, keywords and abstracts
Step 8 – Development and adoption of a classification system
Step 7 – Article selection by full reading
Step 9 – Data extraction from the selected articles
Step 10 – Data analysis
Journal Pre-proof The integrative literature review follows this sequence: search for articles; selection of articles; data extraction and analysis. 3.1 The Search for Articles First, the research question was defined, and the objectives were outlined, following which the inclusion criteria (IC) were established. The inclusion criteria were defined based on the research question and objectives (as shown in Section 1). Four inclusion criteria were established:
IC1: To include papers that illustrate the factors which influence environmental, social and financial performance.
IC2: To include papers that use quantitative methods (in line with IJPE’s most common or popular research method).
IC3: To include only papers within the Asian context.
IC4: To include only papers that examine Asian small and medium sized manufacturing firms. The inclusion criteria aided in the selection of articles, and only articles that met
all these criteria were selected. Next, the combinations of keywords used the database searches were established (see Chart 1). These combinations were intended to identify articles that presented or discussed factors that positively or negatively influence the environmental, social and financial performance of Asian small and medium sized manufacturing firms. To guarantee the accuracy of the search, some keywords were used to limit the results; country names were included for this reason. The search was also limited by document type – only published articles and articles in press were considered. In terms of method applied, only articles which used a quantitative approach were included. Quantitative research methods are those which capture the complexity of real-life situations and processes and their causal relationships and trade-offs, as well as features of sustainability (Brandenburg et al., 2014). As a journal focused on the interface between engineering and management, IJPE is renowned for publishing cutting-edge quantitative research papers, and in keeping with this tradition, we limited our analysis to articles which applied quantitative techniques. The search was carried out in the Scopus database and, in this case, Scopus’ advanced search tool was utilized. The Scopus database is advantageous as it indexes
Journal Pre-proof approximately 70% more sources than similar alternatives such as the Web of Science database (Brzezinski, 2015) and, according to Harzing and Alakangas (2016), provides a more comprehensive coverage of the latest literature. Chart 1 – Combination of Keywords Search Combination of keywords
( TITLE-ABS-KEY ( "SMEs" ) OR TITLE-ABS-KEY ( "small and medium enterprises" ) AND TITLE-ABS-KEY ( "manufacturing" ) AND TITLE-ABS-KEY ( "performance" ) AND ( TITLE-ABS-KEY ( "Asia" ) OR TITLE-ABS-KEY ( "China" ) OR TITLEABS-KEY ( "India" ) OR TITLE-ABS-KEY ( "Indonesia" ) OR TITLE-ABS-KEY ( "Pakistan" ) OR TITLE-ABS-KEY ( "Bangladesh" ) OR TITLE-ABS-KEY ( "Japan" ) OR TITLE-ABS-KEY ( "Philippines" ) OR TITLE-ABS-KEY ( "Vietnam" ) OR TITLE-ABS-KEY ( "Iran" ) OR TITLE-ABS-KEY ( "Turkey" ) OR TITLE-ABS-KEY ( "Thailand" ) OR TITLE-ABS-KEY ( "Myanmar" ) OR TITLE-ABS-KEY ( "South Korea" ) OR TITLE-ABS-KEY ( "Iraq" ) OR TITLE-ABS-KEY ( "Afghanistan" ) OR TITLE-ABS-KEY ( "Saudi Arabia" ) OR TITLE-ABS-KEY ( "Uzbekistan" ) OR TITLE-ABS-KEY ( "Malaysia" ) OR TITLE-ABS-KEY ( "Nepal" ) OR TITLE-ABSKEY ( "Yemen" ) OR TITLE-ABS-KEY ( "North Korea" ) OR TITLE-ABS-KEY ( "Sri Lanka" ) OR TITLE-ABS-KEY ( "Kazakhstan" ) OR TITLE-ABS-KEY ( "Syria" ) OR TITLE-ABS-KEY ( "Cambodia" ) OR TITLE-ABS-KEY ( "Azerbaijan" ) OR TITLEABS-KEY ( "Jordan" ) OR TITLE-ABS-KEY ( "United Arab Emirates" ) OR TITLEABS-KEY ( "Tajikistan" ) OR TITLE-ABS-KEY ( "Israel" ) OR TITLE-ABS-KEY ( "Laos" ) OR TITLE-ABS-KEY ( "Kyrgyzstan" ) OR TITLE-ABS-KEY ( "Lebanon" ) OR TITLE-ABS-KEY ( "Turkmenistan" ) OR TITLE-ABS-KEY ( "Singapore" ) OR TITLE-ABS-KEY ( "Palestine" ) OR TITLE-ABS-KEY ( "Oman" ) OR TITLE-ABSKEY ( "Kuwait" ) OR TITLE-ABS-KEY ( "Georgia" ) OR TITLE-ABS-KEY ( "Mongolia" ) OR TITLE-ABS-KEY ( "Armenia" ) OR TITLE-ABS-KEY ( "Qatar" ) OR TITLE-ABS-KEY ( "Bahrain" ) OR TITLE-ABS-KEY ( "Timor-Leste" ) OR TITLE-ABS-KEY ( "Cyprus" ) OR TITLE-ABS-KEY ( "Bhutan" ) OR TITLE-ABSKEY ( "Maldives" ) OR TITLE-ABS-KEY ( "Brunei" ) OR TITLE-ABS-KEY ( "Taiwan" ) OR TITLE-ABS-KEY ( "Hong Kong" ) OR TITLE-ABS-KEY ( "Macao" ) ) ) AND ( LIMIT-TO ( DOCTYPE , "ar" ) OR LIMIT-TO ( DOCTYPE , "ip" ) )
Using this combination of keywords to search, 236 articles were identified. The search of the Scopus database was conducted in March 2019. 3.2 Selection of Articles Following this initial search, the Search Filters (SF1 and SF2) were defined and applied. All 236 articles were submitted to SF1, which involved reading the title, abstract, and keywords. Articles passed SF1 only if they demonstrated potential for meeting the four inclusion criteria (IC1, IC2, IC3 and IC4). Of the 236 articles, only 68 met these criteria. These 68 articles were then submitted to SF2, which involved a full reading of the articles. As with SF1, only those that met the four inclusion criteria (IC1, IC2, IC3 and IC4) passed SF2. Of the 68 articles, 36 fully met all the IC (see Table 1).
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Table 1 – Final article selection Analysis Criteria
Result (No. of articles)
Total no. of articles identified in database & refined by document type.
236
Articles selected after reading title, abstract, and keywords (SF1)
68
Articles selected after full reading (SF2)
36
Final number of selected articles
36
3.3 Data Extraction The final stages of the integrative literature review were the development and adoption of a classification system, data extraction and analysis. All 36 articles were systematized in detail and their contents were classified according to the following nine dimensions:
Context: the articles were classified into three groups according to the economic context of the country under study. The categories were developing country, developed country and not applicable.
Asian sub-region: the articles were classified according to the sub-region of Asia upon which they focused. The sub-regions considered were Eastern Asia, South-Eastern Asia, Southern Asia, and Western Asia.
Focus: the articles were classified into the following categories based on their content – environmental/social performance, financial performance, and financial and environmental/social performance.
Base theory: this factor examines whether the articles used an organizational theory as a basis for their arguments and analysis. The studies were categorized according to the theoretical classification presented in Sarkis et al. (2011).
Application of quantitative method: articles were classified according to the quantitative method applied in the analysis.
Factors that positively influence environmental/social performance in Asian SMEs: articles were classified according to the positive factors they presented in relation to environmental/social performance.
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Factors that positively influence financial performance in Asian SMEs: articles were classified according to the positive factors they presented in relation to financial performance.
Factors that negatively influence environmental/social performance in Asian SMEs: articles were classified according to the negative factors they presented in relation to environmental/social performance.
Factors that negatively influence financial performance in Asian SMEs: articles were classified according to the negative factors they presented in relation to financial performance.
In the following section, the articles are analyzed in light of the dimensions outlined above. 4. Results 4.1 Bibliometric Analysis: Bibliographical Relations and Most Cited Terms Table 2 shows the 36 analyzed articles and the number of citations for each article in the Google Scholar database. The article with the highest number of citations is Demirbag et al. (2006), with 469 citations, followed by Lin and Chen (2007) (409 citations), and Agan et al. (2013) (153 citations). Demirbag et al. (2006) examine the relationship between total quality management and organizational performance in SMEs located in Turkey, while Lin and Chen (2007) analyze the practices of innovation within SMES in Taiwan. The context of SMEs is an important topic within Asian studies. Table 2 – No. of citations per article. Author/Article Demirbag et al. (2006) Lin and Chen (2007) Agan et al. (2013) Valmohammadi (2011) Zeng et al. (2011) Huang et al. (2013) Nguyen et al (2013) Chao and Spillan (2010) Herzallah et al. (2014) Tuanmat and Smith (2011) Amin et al. (2016) Vu et al. (2018) Hung et al. (2015) Anwar (2018) Singh et al (2016b)
Citation Count (Google Scholar) 469 409 153 143 95 88 86 76 53 50 40 36 30 23 14
Journal Pre-proof Dut (2015) Kaur et al. (2017) Ngui et al. (2008) Tang et al. (2016) Aghajari and Senin (2014) Hughes et al. (2018) Chang and Cheng (2019) Sajan et al. (2017) Yadav et al. (2019) Singh et al. (2016a) Sahoo and Yadav (2018) Batra and Sharma (2017) Jaaffar et al. (2017) Saeidi et al (2018) Saqib et al (2018) Hernandez (2018) Nguyen et al (2018) Jaiswal and Kumar (2018) Siriphattrasophon (2018) Muafi (2016) Mantok et al. (2019)
14 14 11 10 8 7 5 5 4 4 4 2 2 2 1 1 0 0 0 0 0
Figure 2 shows that the year with the highest number of articles published is 2018, with 10 in total. 2016 saw a significant increase in published articles focusing on the factors which influence the financial and environmental/social performance of firms. One reason for this increase in publications on the topic of SMEs and sustainable development may be the establishment of global sustainable development goals and the 2030 Agenda in 2015, and the Paris agreement in 2016. Figure 2 – Timeline of Publications 12 10
10 8 6 5 4
4 3
3
3 2
2 1
1
1
2
1
0 2006 2007 2008 2010 2011 2013 2014 2015 2016 2017 2018 2019
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The articles’ bibliographies and key terms were also analyzed. Figure 3 shows the relationships between the bibliographical sources and the authors’ network, while Figure 4 outlines the density. The figures show that the relationships are decentralized. However, some authors, such as Nezal Aghajari, are more prominent, as demonstrated by their central position in Figure 4. Aghajari, Aslan, Amat and Senin’s article “Drivers of environmental processes and their impact on performance: a study of Turkish SMEs”, as seen in Table 2, has had eight citations since 2014, its year of publication. Tuyen, Quang and Tran also stand out as important authors within the networks, as shown in Figure 3. This highlights the importance of these authors, and their relevance to the themes under analysis in this study. Figure 3 – Analysis of bibliographical relations
Journal Pre-proof Figure 4 – Analysis of bibliographical relations based on density
Figure 5 presents the most cited terms in the articles and the relationships between them. The terms with the highest density are “organizational performance”, “financial performance”, “organizational learning”, “entrepreneurial orientation”, and “India”. This result shows that the majority of the articles explore some of the factors that influence the three elements of sustainability performance, focusing predominantly on the financial pillar. Additionally, the results show that India is one of the most studied countries in this context. However, it is important to note that this analysis is based on the occurrence of the terms in the articles studied, so it is impossible to generalize the analysis without considering the context in which each term is applied. Figure 5 – Analysis of the bibliographical relations based on density
Journal Pre-proof Figure 6 identifies India as the most studied country, with a total of 9 articles focusing on this region. The second most studied country is Malaysia, with 6 articles, followed by Taiwan with 5 and Vietnam with 4. Overall, 36% of the articles focused on countries in South-Eastern Asia, and 33% studied countries in Southern Asia (see Figure 7). Figure 6 – Articles per country India
9
Malaysia
6 5
Taiwan 4
Vietnam Turkey
2
Iran
2
China
2
State of Palestine
1
Indonesia
1
Philippines
1
Thailand
1
Oman
1
Pakistan
1 0
1
2
3
4
5
6
7
8
9
Developing country
Figure 7 – The most studied Asian regions
14%
6%
11% 36%
33%
Eastern Asia
South-Eastern Asia
Southern Asia
Western Asia
Eastern Asia
10
Journal Pre-proof Figures 6 and 7 demonstrate that Eastern Asia is underrepresented in the literature, and future studies should focus on east Asian countries, as the characteristics of this region could enable advances in this research field. 4.2 Theoretical Basis and Research Method The majority of the articles examined – 29 articles – did not use theories to build a theoretical background or to support their analysis, discussions or conclusions. Only seven articles adopted such a theory. Of these articles, two used the Resource-Based View Theory, while another two employed Institutional Theory. The Resource-Based View states that organizational resources and capabilities vary between firms, and play a key role as a differentiating factor that can support performance and competitive advantage (Barney, 1991). Institutional Theory focuses on firms’ external environments and shows how pressures from this environment can influence the adoption of practices and actions (DiMaggio and Powell, 1983; Hirsch, 1975; Meyer and Rowan, 1977). These two theories are vital to understanding the internal and external factors that can influence firms’ performance; for this reason, they could be more widely applied in these kinds of studies. Other theories which were applied in only one of the articles include: Diffusion of Innovation Theory (Rogers, 1976; 2003), which describes a product’s innovation life cycle, and different stages which the innovation may go through to gain market acceptance among five different user groups; Ecological Modernization Theory (Huber, 1982; Weale, 1992), which deals with the role of technological innovations, states, and ‘the market’ in environmental reforms; and Other Orientation Theory (Meglino and Korsgaard, 2004), which relates to having higher ‘other orientation’ and lower selfconcern. See Table 3 for a breakdown of theories used in the articles. Table 3 – Theories applied in the articles Theories
Count
Not applied Resource-Based View Theory Institutional Theory Theory of Diffusion of Innovation Ecological Modernization Theory Other Orientation Theory
29 2 2 1 1 1
Total
36
Journal Pre-proof In terms of the quantitative methods adopted to analyze the results, the majority of the articles adopted some variety of structural equation modeling. Structural equation modeling is used to examine the relationships between dependent, multiple variables (Hair Jr et al., 2009). This statistical model is broadly used in the literature and can be useful in analyzing factors that affect performance. The techniques adopted in the articles can be seen below, in Table 4. Table 4 – Quantitative methods applied in the articles Quantitative method
Count
Structural Equation Modeling Regression (including Multiple, and Hierarchical) Dynamic Model Approach Correlation Panel Data Fuzzy Delphi Method
22 7 3 2 1 1
Total
36
4.3 Performance and Sustainable Economic Development in Asian SMEs The articles examined in this work were classified according to their focus in relation to the research question and objectives outlined in Section 1. Table 5 demonstrates how the articles relate to the three focuses of financial performance, environmental/social performance, and financial and environmental/social performance. Of the 36 articles analyzed, 28 include some factor that affects the financial performance of manufacturing firms in Asia. Meanwhile, 5 include factors that influence environmental/social performance, while only 3 present factors which influence both financial and environmental/social performance of firms. Sustainability is based on the synergy and balanced relationships of the social, environmental and financial dimensions. Few studies explored these three pillars simultaneously. Therefore, future studies exploring the complexities of these relationships in Asian manufacturing SMEs are vital. Table 5 – Article focus Author Agan et al. (2013) Aghajari and Senin (2014) Amin et al. (2016) Anwar (2018)
Financial Performance 1 1 1 1
Environmental/Social Performance
Financial and Environmental/Social Performance
Journal Pre-proof Batra and Sharma (2017) Chang and Cheng (2019) Chao and Spillan (2010) Demirbag et al. (2006) Dut (2015) Hernandez (2018) Herzallah et al. (2014) Huang et al. (2013) Hughes et al. (2018) Hung et al. (2015) Jaaffar et al. (2017) Jaiswal and Kumar (2018)
1 1 1 1 1 1 1 1 1 1 1 1
Kaur et al. (2017) Lin and Chen (2007) Mantok et al. (2019) Muafi (2016) Ngui et al. (2008) Nguyen et al (2013) Nguyen et al (2018) Saeidi et al (2018) Sahoo and Yadav (2018) Sajan et al. (2017) Saqib et al (2018) Singh et al (2016b) Singh et al. (2016a) Siriphattrasophon (2018) Tang et al. (2016) Tuanmat and Smith (2011) Valmohammadi (2011) Vu et al. (2018) Yadav et al. (2019) Zeng et al. (2011)
1 1 1
Total
28
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 5
3
Table 5 also demonstrates that the majority of the articles included some factors that influence the financial performance of SMEs in the Asian manufacturing industry. The articles tend to focus more on the factors that positively affect financial performance than those with a negative effect. Figure 8 outlines all the factors that positively (see Table 6, in the Appendix) and negatively (see Table 7, in the Appendix) affect financial performance. The variety of factors identified in the literature were classified into internal and external factors. It is therefore possible to see that the majority of authors describe internal
Journal Pre-proof factors as being the most important for achieving positive financial performance. Conversely, factors that may threaten this performance receive less attention. ********INSERT TABLE 6, 7 and 8 HERE************ The most commonly cited factors that positively influence the financial performance of manufacturing SMEs are innovation and entrepreneurial orientation. Innovation is the most cited factor in relation to firms improving their financial performance (see Table 6 in the Appendix). Business model innovation and open innovation are both relevant types of organizational change (Anwar, 2018; Huang et al., 2013). Anwar (2018), for example, shows that an innovative business model is related to profitability in SMEs in the manufacturing industries of Pakistan and Southern Asia. According to Jaffar et al. (2017), product and administrative innovation are also important factors for improving financial performance. Furthermore, an innovative mindset in managers (Lin and Chen, 2007; Amin et al., 2016) and green organizational innovation (Singh et al., 2016b) are positive factors for financial performance. Another driving factor for improving the financial performance of Asian manufacturing SMEs in Asia is entrepreneurial orientation. Entrepreneurial orientation is an overall strategic stance toward entrepreneurship (Mantok et al, 2019; Hughes et al., 2018; Siriphattrasophon, 2018; Jaaffar et al., 2017; Tang et al., 2016). The entrepreneurial orientation (EO) literature argues that EO’s five competencies, namely innovativeness, proactiveness, risk-taking (Miller, 1983), autonomy, and competitive aggressiveness (Lumpkin and Dess, 1996), when effectively applied in dynamic organizational and environmental conditions, culminate in enhanced firm performance. Moreover, where a firm has successfully adopted an entrepreneurial orientation, it is necessary that they dedicate time and resources to creating and maintaining a conducive learning environment (Mantok et al., 2019). According to Mantok et al. (2019), organizational learning mediates the relationship between entrepreneurial orientation and some metrics of financial performance. Absorptive capacity also mediates this relationship (Hughes et al., 2018). Absorptive capacity is an intervening factor in effective entrepreneurial orientation and improved financial performance (Hughes et al., 2018). The main external factor which positively affects financial performance is government support (see Figure 8). While government support is an important factor to
Journal Pre-proof achieving positive financial performance, the effect of this support varies depending on the type of subsidy (Nguyen et al., 2018). Figure 8 – Factors that positively influence the financial performance of manufacturing SMEs in Asia
To a lesser extent, the articles studied explore factors related to environmental/social performance. Based on Table 8, (see Appendix) it is possible to note the importance of the adoption of lean practices (Sajan et al., 2017; Sahoo and Yadav, 2018; Jaiswal and Kumar, 2018; Yadav et al., 2019). According to Jaiswal and Kumar (2018), lean manufacturing and green manufacturing are based on a philosophy of continuous waste elimination, which is focused on customer and environmental perspectives. An integrated lean green manufacturing system can benefit firms, customers and the natural environment. In summary, innovation, entrepreneurial orientation and governmental support are all important financial drivers of manufacturing SMEs in Asia, while lean manufacturing as a manufacturing approach plays a vital role in environmental/social performance.
Journal Pre-proof 5. Analysis and Conclusions 5.1 Discussion This research topic has gained momentum in recent years, and this increase is notable, because Asian SMEs play vital roles in both economic growth and the achievement of sustainable development goals. This study identifies the internal and external factors which influence financial, social and environmental performance. In terms of financial performance, SME manufacturers in Asia need to invest in innovation in the form of green organizational innovation and open innovation, as well as fostering managers’ innovative capabilities. Furthermore, these SMEs should invest in entrepreneurial orientation, improving on organizational learning, absorptive capacity, market orientation and collective capability. These innovation and entrepreneurial orientation are crucial internal factors for achieving improved financial performance. Another factor which has a direct influence on the financial performance of Asian SMEs is government support. Government support is crucial for SMEs, as they are more fragile than larger enterprises. SMEs need incentives and specific programs to enable them to gain access to credit with appropriate taxes, for example, or to improve their management practices or the capacity of their work force. Some of the internal factors cited above require government support for implementation. Environmental and social performance is also positively influenced by internal and external factors. For example, lean green manufacturing systems have been identified as a factor which positively influences environmental and social performance, making it an important investment for organizations. Green information technologies and the reduction of greenhouse gas emissions are also positively related to improved environmental and social performance. These kinds of practices have a direct impact on environmental performance, as they are applied directly to the production process. Externally, social and market forces drive firms to adopt more sustainable approaches which positively impacts on environmental and social performance. This situation is reflected in the need for an external fit. As in the case of financial performance, SMEs require governmental support and incentives to enable them to move towards more socially and environmentally responsible practices. 5.2 Contributions of the Research Two specific regions in Asia lead the research on sustainable development in SMEs: South-Eastern and Southern Asia. There is thus scope for research on how other
Journal Pre-proof Asian regions are dealing with sustainable development. Given that Asia’s multifaceted governmental policies are drivers of corporate sustainability, this would make an interesting topic for future research. Research on sustainable development in manufacturing SMEs in Asia requires further theoretical development in order to build ideas in a rigorously scientific manner. Taking into account the government’s role in driving sustainable initiatives in Asia, as well as the role of innovation and entrepreneurial orientation to support transactions within SMEs, theories such as Institutional theory, Ecological Modernization, Social Networks and Organizational Learning can help researchers shape and analyze new constructs. Quantitative methods based on analytical modeling, mathematical programming and simulations could also improve this area of research, as these methods can capture the complexity of the triple bottom line perspective; that is, the integration and the trade-offs between economic, environmental and social performance measures. There are a few publications on sustainable development in manufacturing SMEs in Asia that analyze sustainability performance, most of these studies focus on financial performance rather than sustainability performance. In this sense, the use of quantitative research models aligned with operations research could be applied in order to integrate economic, environmental and social performance as a whole. Lean manufacturing systems are a means of helping manufacturing SMEs in Asia to achieve improved environmental/social performance. There is scope for investigation into other sustainable operations management practices that may also contribute to firms’ corporate sustainability. In addition, an exploration of factors that simultaneously improve environmental/social performance and financial performance would also be of benefit. For example, it has been shown that green organizational innovation and green information technologies both boost environmental/social performance and financial performance. This article contributes to the debate on sustainable development in manufacturing SMEs in Asia by identifying the factors that can influence their environmental/social and financial performance. By and large, innovation and entrepreneurial orientation, governmental policy and support, and lean manufacturing systems are among the important factors which drive manufacturing SMEs in Asia towards improved financial and social/environmental performance. In addition, this article presents possible avenues for future research.
Journal Pre-proof 5. 3 Research Agenda Based on the findings discussed, it is possible to suggest some areas of future research in the field of sustainable development in manufacturing SMEs in Asia.
Future research should be built on theory-driven research utilizing the following theories: Institutional Theory, Ecological Modernization Theory, Social Networks Theory, and Organizational Learning Theory.
The use of quantitative research methods in operational research could help capture the complex concept of the triple bottom line, furthering our understanding of Asian manufacturing SMEs’ journey towards sustainable development performance.
Few studies explore the three pillars of sustainability simultaneously. It is imperative that future studies explore this relationship.
Technological and relational capabilities are important for SMEs wishing to pursue corporate sustainability; therefore, there is scope for examining the use of digital and virtual technologies to integrate Asian SMEs, supporting management of resource flow across supply chains. SMEs are distinct from large enterprises; for example, they have more resource limitations. Therefore, it would be interesting to investigate the technological and relational capabilities needed to pursue corporate sustainability, considering SMEs’ particular characteristics.
There are sustainable operations management approaches, such as sustainable supply chains and circular economy, which could be analyzed as potential pathways for manufacturing SMEs in Asia to achieve sustainable performance.
The multifaceted local and national environmental and financial policies in Asia could be analyzed as a means of manufacturing SMEs pursuing sustainable development goals.
5.4 Limitations of the Study This article has certain inherent limitations; in particular, factors related to the selection of keywords, as expressed in the keyword combinations presented in Chart 1, in the search for articles in the Scopus database, and the cognitive process used to identify and analyze content from the articles selected. These limitations should be noted by scholars as they continue to investigate this important and timely topic, the
Journal Pre-proof aforementioned future research directions, and the various themes listed in the call for papers for this special edition of IJPE.
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APPENDIX
TOTAL
Sahoo and Yadav (2018)
Saeidi et al (2018)
Nguyen et al (2018)
Nguyen et al (2013)
Ngui et al. (2008)
Muafi (2016)
Mantok et al. (2019)
Lin and Chen (2007)
Kaur et al. (2017)
Jaiswal and Kumar (2018)
Jaaffar et al. (2017)
Hung et al. (2015)
Hughes et al. (2018)
Huang et al. (2013)
Herzallah et al. (2014)
Hernandez (2018)
Dut (2015)
Demirbag et al. (2006)
Chao and Spillan (2010)
Chang and Cheng (2019)
Batra and Sharma (2017)
Anwar (2018)
Amin et al. (2016)
Aghajari and Senin (2014)
Factors (Positive effect on financial performance)
Agan et al. (2013)
Table 6 – Factors with positive effects on the financial performance of manufacturing SMEs in Asia
Internal factors Manufacturing technology
1
Organizational strategy Environmental Management System
X
3
X
1
Entrepreneurial orientation
X
Absorptive capacity
X
X
X
5 1
Flexibility of components of manufacturing system
X
1
Exportation
X
Green IT
1
X
1
Green process
1
Green organizational innovation
1
Innovation Collective capability Market orientation practice Integrated lean green manufacturing system (LGMS)
X
X
X
X
X
X
X X
X
8 1
X
2 X
1
Adoption of lean practices
X
Firm's readiness for Internationalization Organizational identity
2 1
X
1
Organizational Learning Capability Organizational Sustainability
X
X
2 1
Total Quality Management Practices
X
X
Quality and flexibility priorities
3 X
1
External factors Government Reforms and support
X
X
Market
3 1
Strategic Alliances
X
1
Competitive Environment None
X
1 X
X
4
Factors (Negative effect on financial performance)
None X X X X X X X
High level of bribery
X X X X X X X X X X X X X
Cancellation of subsidies from government
X X
Corruption X
Social forces X
X
TOTAL
Sahoo and Yadav (2018)
Saeidi et al (2018)
Nguyen et al (2018)
Nguyen et al (2013)
Ngui et al. (2008)
Muafi (2016)
Mantok et al. (2019)
Lin and Chen (2007)
Kaur et al. (2017)
Jaiswal and Kumar (2018)
Jaaffar et al. (2017)
Hung et al. (2015)
Hughes et al. (2018)
Huang et al. (2013)
Herzallah et al. (2014)
Hernandez (2018)
Dut (2015)
Demirbag et al. (2006)
Chao and Spillan (2010)
Chang and Cheng (2019)
Batra and Sharma (2017)
Anwar (2018)
Amin et al. (2016)
Aghajari and Senin (2014)
Agan et al. (2013)
Table 7 – Factors with negative effects on the financial performance of manufacturing SMEs in Asia
1
1
1
1
32
Factors (Positive effect on environmental/social performance)
None X X X X
Lean green manufacturing systems Green information technologies Reduction of greenhouse gas emissions
X X X X X X X X X X X
External fit
X X X X
Internal factors
X
X
X
X X
TOTAL
Lean practices Sahoo and Yadav (2018)
Saeidi et al (2018)
Nguyen et al (2018)
Nguyen et al (2013)
Ngui et al. (2008)
Muafi (2016)
Mantok et al. (2019)
Lin and Chen (2007)
Kaur et al. (2017)
Jaiswal and Kumar (2018)
Jaaffar et al. (2017)
Hung et al. (2015)
Hughes et al. (2018)
Huang et al. (2013)
Herzallah et al. (2014)
Hernandez (2018)
Dut (2015)
Demirbag et al. (2006)
Chao and Spillan (2010)
Chang and Cheng (2019)
Batra and Sharma (2017)
Anwar (2018)
Amin et al. (2016)
Aghajari and Senin (2014)
Agan et al. (2013)
Table 8 – Factors with positive effects on the environmental/social performance of manufacturing SMEs in Asia
X 3
1
1
1
Social and market forces External factors
1
Government support 1
1
28
Ana Beatriz Lopes de Sousa Jabbour, Nelson Oly Ndubisi, Bruno Michel Roman Pais Seles PII:
S0925-5273(19)30410-4
DOI:
https://doi.org/10.1016/j.ijpe.2019.107567
Reference:
PROECO 107567
To appear in:
International Journal of Production Economics
Received Date:
11 July 2019
Accepted Date:
29 November 2019
Please cite this article as: Ana Beatriz Lopes de Sousa Jabbour, Nelson Oly Ndubisi, Bruno Michel Roman Pais Seles, Sustainable Development in Asian Manufacturing SMEs: Progress and Directions, International Journal of Production Economics (2019), https://doi.org/10.1016/j.ijpe. 2019.107567
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Journal Pre-proof Sustainable Development in Asian Manufacturing SMEs: Progress and Directions
Ana Beatriz Lopes de Sousa Jabbour* (corresponding author) Montpellier Business School 2300, Avenue des Moulins. 34185 Montpellier Cedex 4 – France E-mail: [email protected] Prof. Nelson Oly Ndubisi College of Business & Economics Qatar University Qatar Email: [email protected]
Bruno Michel Roman Pais Seles Sao Paulo State University Av. Eng. Luiz Edmundo C. Coube 14-01. 17033-360 – Bauru/São Paulo E-mail: [email protected]
Journal Pre-proof Sustainable Development in Asian Manufacturing SMEs: Progress and Directions Abstract This article identifies the factors that influence the environmental, social and financial performance of small and medium-sized enterprises (SMEs) in the manufacturing sector in Asia. Asian SMEs play an important role in both economic growth and the achievement of the region’s sustainable development goals. For example, SMEs are key to employment creation and income distribution, and crucial to the growth of Asian exports. However, SMEs are also responsible for a large part of the world’s consumption of resources, air and water pollution, and waste generation. Therefore, this article identifies and discusses the factors which contribute to Asian manufacturing SMEs’ pursuit of sustainable development. An integrative literature review is conducted, and identifies that innovation and entrepreneurial orientation, governmental actions, and lean manufacturing systems are some of the prominent factors which drive Asian SMEs’ financial, social and environmental performance. In addition, this article outlines future research avenues which could support Asian SMEs to move towards fully functioning sustainable development performance. Keywords: Sustainability, Sustainable performance, Small and medium manufacturing enterprises, SMEs, Asia. 1. Introduction As Asian countries have increasingly come to prominence in the global economy, small and medium-sized enterprises (SMEs), in particular, are playing an important role in increasing the economic performance of these countries (Harvie and Lee, 2002; Budhwar et al., 2016). According to the Organization for Economic Co-operation and Development (OECD, 2005), SMEs are non-subsidiary independent enterprises, where the salient features are number of employees and extent of financial assets. SMEs are distinguished from larger enterprises by their “reactive, fire-fighting mentality, resource limitations, informal strategies, and flexible structures” (Terziovski, 2010, p892). Despite these characteristics SMEs are fundamental for achieving and sustaining growth and performance across Asian countries and are key to the competitive capacity of these countries. They directly contribute to employment creation and income
Journal Pre-proof distribution, reducing poverty which in turn improves sustainable development in developing countries in Asia SME manufacturers are crucial to the growth of Asian exports (Harvie and Lee, 2002; Harvie and Lee, 2005, Tambunan, 2009; Budhwar et al., 2016). Furthermore, Asian manufacturing SMEs offer cheaper products than their counterparts in other countries (Terziovski, 2010). However, it has been documented that SMEs in the manufacturing sector are responsible for a large part of the world’s consumption of resources, air and water pollution, and waste generation (Ndubisi et al. 2019). According to Ndubisi et al. (2019), the aggregate environmental damage caused manufacturing SMEs in some sectors exceeds that of their larger counterparts, even though their individual environmental footprint may relatively be low. Therefore, SMEs “must use resources efficiently and economic growth must be done in harmony with the environment” (Ndubisi, 2008, p164) in order to achieve sustainable development. SMEs must therefore address the issue of corporate sustainability (Morsing and Perrini, 2009). Across Asia, local and national governments are promoting environmental programs and policies in order to reduce waste, tackle air pollution and increase the use of renewable energy sources (Tseng et al., 2013). One recent example is the ban on plastic bags introduced by several Asian governments, including Bangladesh, China, Israel, Western India, Malaysia, Taiwan, and Singapore (Sterbentz, 2008). Such decisions are based on the evidence that these bags end up in landfill, or in one of the Pacific gyres (circular systems of ocean currents comprising a substantial part of the Pacific Ocean). Nevertheless, according to the Asian Development Bank (2017), some countries across the Asia-Pacific region still face difficulties in achieving sustainable development goals, in terms of responsible consumption and production. For example, this region uses twice the amount of raw materials to produce one unit of GDP in comparison with other regions, which has severe environmental repercussions and leads to a scarcity of natural resources. Private businesses contribute both positively and negatively to the achievement of Asian SME sustainable development goals (United Nations, 2017). Hofmann et al. (2012) state that technological and relational capabilities play an important role in supporting SMEs to pursue corporate sustainability. As SMEs tend to be entrepreneurial, they are generally engaged in environmental sustainability practices and, as a consequence, have a sustainable competitive advantage (Roxas, et al., 2017). Thus, considering the importance of SMEs to the Asian economy, and the pivotal role of
Journal Pre-proof private businesses in achieving sustainable development, it is vital to analyze their performance characteristics, such as sustainability performance. Considering the above, this article proposes the following research question:
According to the current literature, which factors influence the environmental, social and financial performance of small and mediumsized manufacturing firms in Asia?
Consequently, the research objective of this study is:
To analyze the factors that influence the environmental, social and financial performance of small and medium-sized manufacture firms in Asia.
To achieve this objective, an integrative literature review has been adopted as the research method for this study (Huisingh, 2012). The main contribution of this work is its identification and examination of the factors that may, positively or negatively, influence the environmental, social and financial performance of small and medium sized manufacturing enterprises in Asia. This article highlights that these factors are related both to the firms’ internal characteristics and to external factors related to the institutional environment. The article is structured as follows. The next section presents the theoretical background. The research method is outlined in Section 3, and Section 4 presents the results of the integrative literature review. Finally, Section 5 gives the research analysis and conclusions. 2. Theoretical Background: Asian SMEs and Sustainable Development Many Asian countries are important players in the global economy, and their influence on the world economy has increased over recent years (Budhwar et al., 2016). SMEs have expanded rapidly in Asia over the past twenty years. However, as this region is remarkable for its economic diversity, these SMEs exist in different stages of development, and differ in their contributions to the region’s economy (Harvie and Lee, 2002). According to the Organization for Economic Cooperation and Development’s (OECD) 2016 report, SMEs are the predominant form of enterprise, comprising approximately 99% of all firms. Across developing countries in Asia, SMEs play an important role, contributing to employment creation, income distribution, poverty reduction and the growth of manufactured exports, as well as the development of
Journal Pre-proof entrepreneurship, manufacturing industry, and rural economy (Tambunan, 2009). For example, SMEs account for over half of all employment (IFC, 2010). According to the literature, in some sub-regions SMEs contribute to achieving and sustaining growth and performance in their economies, and are fundamental to the competitive edge of some Asian economies in the global market (Harvie and Lee, 2005). Considering the importance of SMEs to the Asian economy, it has never been more important to analyze their performance characteristics, sustainability performance in particular. According to the Asian Development Bank (2017), financial support for SMEs could help tackle climate breakdown in Asia. Due to a series of severe environmental accidents and the consequent emergence of strict environmental legislation, the period from the late 1960s to the 1980s was marked by an increased concern for the preservation of natural resources (McAloone and Pigosso, 2017; Skanavis et al., 2005). As a consequence, organizations started to integrate sustainability into their business practices, and to move towards sustainable development. In terms of sustainability, businesses tend to move from a reactive phase to a more proactive one (McAloone and Pigosso, 2017). The sustainability performance of a firm includes financial performance, social performance and environmental performance. A firm’s financial performance reflects its profitability and can be affected by diverse factors, such as concentration and growth, or firm size (Capon et al., 1990). Social and environmental performance are related to social practices and initiatives, driven by corporate social responsibility or adoption of environmentallyfriendly practices (Zhu and Sarkis, 2004; González-Benito and González-Benito, 2006; Muñoz-Villamizar et al., 2018). In the case of corporate social responsibility, firms not only have economic and legal obligations, but also ethical and discretionary responsibilities (Carroll, 1999); social performance is based on the fulfillment of these responsibilities. Environmental performance is based on the reduction of resource consumption, as well as the reduction of solid and water waste, environmental accidents and polluting emissions (Zhu and Sarkis, 2004; González-Benito and González-Benito, 2006). Observing and recording the environmental performance of Asian manufacturing SMEs is imperative, and in light of recent evidence, monitoring of the two largest countries in the region (China and India) is particularly crucial. For example, a study in India documents cases of tanner effluent being released by manufacturing SMEs engaged in leather goods production, which created serious problems for local neighborhoods
Journal Pre-proof (Shanker, 2001). A similar record of poor environmental performance is reported in relation to the textile bleaching industry (Ndubisi, 2008). In China, the foundry industry, comprising a large number of SMEs, is considered a ‘red category’ (highly polluting) industry, with very high smoke and dust particle emissions (Ndubisi, 2008, p 8). Mining is another industry of concern, with some 20,000 small mines, coke and steel mills having been closed by the Chinese government (Hu et al., 2008) due to their negative environmental impact. Consequently, some Asian governments have enacted laws such as the Cleaner Production Law, the Law on the Prevention of Radioactive Pollution, and the Environmental Impact Assessment Law. 3. Research Method The research method adopted in this article is an integrative literature review (Huisingh, 2012). This method was applied by Junior and Filho (2010), and other studies have used a similar approach; for instance, Jabbour (2013), Mariano et al. (2015) and Seuring and Muller (2012), with an in-depth examination provided by Gaur and Kumar (2018). The steps followed in this integrative literature review are outlined in Figure 1. All the steps presented in Figure 1 are explained in the following subsections. Figure 1 – Steps followed in the integrative literature review
Step 1 – Definition of the research question
Step 2 – Definition of the general and specific objectives
Step 4 – Definition of the combinations of keywords and searching of databases
Step 3 – Definition of the Inclusion Criteria (IC)
Step 5 – Definition of the Search Filters (SF1 and SF2)
Step 6 – Article selection by reading the title, keywords and abstracts
Step 8 – Development and adoption of a classification system
Step 7 – Article selection by full reading
Step 9 – Data extraction from the selected articles
Step 10 – Data analysis
Journal Pre-proof The integrative literature review follows this sequence: search for articles; selection of articles; data extraction and analysis. 3.1 The Search for Articles First, the research question was defined, and the objectives were outlined, following which the inclusion criteria (IC) were established. The inclusion criteria were defined based on the research question and objectives (as shown in Section 1). Four inclusion criteria were established:
IC1: To include papers that illustrate the factors which influence environmental, social and financial performance.
IC2: To include papers that use quantitative methods (in line with IJPE’s most common or popular research method).
IC3: To include only papers within the Asian context.
IC4: To include only papers that examine Asian small and medium sized manufacturing firms. The inclusion criteria aided in the selection of articles, and only articles that met
all these criteria were selected. Next, the combinations of keywords used the database searches were established (see Chart 1). These combinations were intended to identify articles that presented or discussed factors that positively or negatively influence the environmental, social and financial performance of Asian small and medium sized manufacturing firms. To guarantee the accuracy of the search, some keywords were used to limit the results; country names were included for this reason. The search was also limited by document type – only published articles and articles in press were considered. In terms of method applied, only articles which used a quantitative approach were included. Quantitative research methods are those which capture the complexity of real-life situations and processes and their causal relationships and trade-offs, as well as features of sustainability (Brandenburg et al., 2014). As a journal focused on the interface between engineering and management, IJPE is renowned for publishing cutting-edge quantitative research papers, and in keeping with this tradition, we limited our analysis to articles which applied quantitative techniques. The search was carried out in the Scopus database and, in this case, Scopus’ advanced search tool was utilized. The Scopus database is advantageous as it indexes
Journal Pre-proof approximately 70% more sources than similar alternatives such as the Web of Science database (Brzezinski, 2015) and, according to Harzing and Alakangas (2016), provides a more comprehensive coverage of the latest literature. Chart 1 – Combination of Keywords Search Combination of keywords
( TITLE-ABS-KEY ( "SMEs" ) OR TITLE-ABS-KEY ( "small and medium enterprises" ) AND TITLE-ABS-KEY ( "manufacturing" ) AND TITLE-ABS-KEY ( "performance" ) AND ( TITLE-ABS-KEY ( "Asia" ) OR TITLE-ABS-KEY ( "China" ) OR TITLEABS-KEY ( "India" ) OR TITLE-ABS-KEY ( "Indonesia" ) OR TITLE-ABS-KEY ( "Pakistan" ) OR TITLE-ABS-KEY ( "Bangladesh" ) OR TITLE-ABS-KEY ( "Japan" ) OR TITLE-ABS-KEY ( "Philippines" ) OR TITLE-ABS-KEY ( "Vietnam" ) OR TITLE-ABS-KEY ( "Iran" ) OR TITLE-ABS-KEY ( "Turkey" ) OR TITLE-ABS-KEY ( "Thailand" ) OR TITLE-ABS-KEY ( "Myanmar" ) OR TITLE-ABS-KEY ( "South Korea" ) OR TITLE-ABS-KEY ( "Iraq" ) OR TITLE-ABS-KEY ( "Afghanistan" ) OR TITLE-ABS-KEY ( "Saudi Arabia" ) OR TITLE-ABS-KEY ( "Uzbekistan" ) OR TITLE-ABS-KEY ( "Malaysia" ) OR TITLE-ABS-KEY ( "Nepal" ) OR TITLE-ABSKEY ( "Yemen" ) OR TITLE-ABS-KEY ( "North Korea" ) OR TITLE-ABS-KEY ( "Sri Lanka" ) OR TITLE-ABS-KEY ( "Kazakhstan" ) OR TITLE-ABS-KEY ( "Syria" ) OR TITLE-ABS-KEY ( "Cambodia" ) OR TITLE-ABS-KEY ( "Azerbaijan" ) OR TITLEABS-KEY ( "Jordan" ) OR TITLE-ABS-KEY ( "United Arab Emirates" ) OR TITLEABS-KEY ( "Tajikistan" ) OR TITLE-ABS-KEY ( "Israel" ) OR TITLE-ABS-KEY ( "Laos" ) OR TITLE-ABS-KEY ( "Kyrgyzstan" ) OR TITLE-ABS-KEY ( "Lebanon" ) OR TITLE-ABS-KEY ( "Turkmenistan" ) OR TITLE-ABS-KEY ( "Singapore" ) OR TITLE-ABS-KEY ( "Palestine" ) OR TITLE-ABS-KEY ( "Oman" ) OR TITLE-ABSKEY ( "Kuwait" ) OR TITLE-ABS-KEY ( "Georgia" ) OR TITLE-ABS-KEY ( "Mongolia" ) OR TITLE-ABS-KEY ( "Armenia" ) OR TITLE-ABS-KEY ( "Qatar" ) OR TITLE-ABS-KEY ( "Bahrain" ) OR TITLE-ABS-KEY ( "Timor-Leste" ) OR TITLE-ABS-KEY ( "Cyprus" ) OR TITLE-ABS-KEY ( "Bhutan" ) OR TITLE-ABSKEY ( "Maldives" ) OR TITLE-ABS-KEY ( "Brunei" ) OR TITLE-ABS-KEY ( "Taiwan" ) OR TITLE-ABS-KEY ( "Hong Kong" ) OR TITLE-ABS-KEY ( "Macao" ) ) ) AND ( LIMIT-TO ( DOCTYPE , "ar" ) OR LIMIT-TO ( DOCTYPE , "ip" ) )
Using this combination of keywords to search, 236 articles were identified. The search of the Scopus database was conducted in March 2019. 3.2 Selection of Articles Following this initial search, the Search Filters (SF1 and SF2) were defined and applied. All 236 articles were submitted to SF1, which involved reading the title, abstract, and keywords. Articles passed SF1 only if they demonstrated potential for meeting the four inclusion criteria (IC1, IC2, IC3 and IC4). Of the 236 articles, only 68 met these criteria. These 68 articles were then submitted to SF2, which involved a full reading of the articles. As with SF1, only those that met the four inclusion criteria (IC1, IC2, IC3 and IC4) passed SF2. Of the 68 articles, 36 fully met all the IC (see Table 1).
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Table 1 – Final article selection Analysis Criteria
Result (No. of articles)
Total no. of articles identified in database & refined by document type.
236
Articles selected after reading title, abstract, and keywords (SF1)
68
Articles selected after full reading (SF2)
36
Final number of selected articles
36
3.3 Data Extraction The final stages of the integrative literature review were the development and adoption of a classification system, data extraction and analysis. All 36 articles were systematized in detail and their contents were classified according to the following nine dimensions:
Context: the articles were classified into three groups according to the economic context of the country under study. The categories were developing country, developed country and not applicable.
Asian sub-region: the articles were classified according to the sub-region of Asia upon which they focused. The sub-regions considered were Eastern Asia, South-Eastern Asia, Southern Asia, and Western Asia.
Focus: the articles were classified into the following categories based on their content – environmental/social performance, financial performance, and financial and environmental/social performance.
Base theory: this factor examines whether the articles used an organizational theory as a basis for their arguments and analysis. The studies were categorized according to the theoretical classification presented in Sarkis et al. (2011).
Application of quantitative method: articles were classified according to the quantitative method applied in the analysis.
Factors that positively influence environmental/social performance in Asian SMEs: articles were classified according to the positive factors they presented in relation to environmental/social performance.
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Factors that positively influence financial performance in Asian SMEs: articles were classified according to the positive factors they presented in relation to financial performance.
Factors that negatively influence environmental/social performance in Asian SMEs: articles were classified according to the negative factors they presented in relation to environmental/social performance.
Factors that negatively influence financial performance in Asian SMEs: articles were classified according to the negative factors they presented in relation to financial performance.
In the following section, the articles are analyzed in light of the dimensions outlined above. 4. Results 4.1 Bibliometric Analysis: Bibliographical Relations and Most Cited Terms Table 2 shows the 36 analyzed articles and the number of citations for each article in the Google Scholar database. The article with the highest number of citations is Demirbag et al. (2006), with 469 citations, followed by Lin and Chen (2007) (409 citations), and Agan et al. (2013) (153 citations). Demirbag et al. (2006) examine the relationship between total quality management and organizational performance in SMEs located in Turkey, while Lin and Chen (2007) analyze the practices of innovation within SMES in Taiwan. The context of SMEs is an important topic within Asian studies. Table 2 – No. of citations per article. Author/Article Demirbag et al. (2006) Lin and Chen (2007) Agan et al. (2013) Valmohammadi (2011) Zeng et al. (2011) Huang et al. (2013) Nguyen et al (2013) Chao and Spillan (2010) Herzallah et al. (2014) Tuanmat and Smith (2011) Amin et al. (2016) Vu et al. (2018) Hung et al. (2015) Anwar (2018) Singh et al (2016b)
Citation Count (Google Scholar) 469 409 153 143 95 88 86 76 53 50 40 36 30 23 14
Journal Pre-proof Dut (2015) Kaur et al. (2017) Ngui et al. (2008) Tang et al. (2016) Aghajari and Senin (2014) Hughes et al. (2018) Chang and Cheng (2019) Sajan et al. (2017) Yadav et al. (2019) Singh et al. (2016a) Sahoo and Yadav (2018) Batra and Sharma (2017) Jaaffar et al. (2017) Saeidi et al (2018) Saqib et al (2018) Hernandez (2018) Nguyen et al (2018) Jaiswal and Kumar (2018) Siriphattrasophon (2018) Muafi (2016) Mantok et al. (2019)
14 14 11 10 8 7 5 5 4 4 4 2 2 2 1 1 0 0 0 0 0
Figure 2 shows that the year with the highest number of articles published is 2018, with 10 in total. 2016 saw a significant increase in published articles focusing on the factors which influence the financial and environmental/social performance of firms. One reason for this increase in publications on the topic of SMEs and sustainable development may be the establishment of global sustainable development goals and the 2030 Agenda in 2015, and the Paris agreement in 2016. Figure 2 – Timeline of Publications 12 10
10 8 6 5 4
4 3
3
3 2
2 1
1
1
2
1
0 2006 2007 2008 2010 2011 2013 2014 2015 2016 2017 2018 2019
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The articles’ bibliographies and key terms were also analyzed. Figure 3 shows the relationships between the bibliographical sources and the authors’ network, while Figure 4 outlines the density. The figures show that the relationships are decentralized. However, some authors, such as Nezal Aghajari, are more prominent, as demonstrated by their central position in Figure 4. Aghajari, Aslan, Amat and Senin’s article “Drivers of environmental processes and their impact on performance: a study of Turkish SMEs”, as seen in Table 2, has had eight citations since 2014, its year of publication. Tuyen, Quang and Tran also stand out as important authors within the networks, as shown in Figure 3. This highlights the importance of these authors, and their relevance to the themes under analysis in this study. Figure 3 – Analysis of bibliographical relations
Journal Pre-proof Figure 4 – Analysis of bibliographical relations based on density
Figure 5 presents the most cited terms in the articles and the relationships between them. The terms with the highest density are “organizational performance”, “financial performance”, “organizational learning”, “entrepreneurial orientation”, and “India”. This result shows that the majority of the articles explore some of the factors that influence the three elements of sustainability performance, focusing predominantly on the financial pillar. Additionally, the results show that India is one of the most studied countries in this context. However, it is important to note that this analysis is based on the occurrence of the terms in the articles studied, so it is impossible to generalize the analysis without considering the context in which each term is applied. Figure 5 – Analysis of the bibliographical relations based on density
Journal Pre-proof Figure 6 identifies India as the most studied country, with a total of 9 articles focusing on this region. The second most studied country is Malaysia, with 6 articles, followed by Taiwan with 5 and Vietnam with 4. Overall, 36% of the articles focused on countries in South-Eastern Asia, and 33% studied countries in Southern Asia (see Figure 7). Figure 6 – Articles per country India
9
Malaysia
6 5
Taiwan 4
Vietnam Turkey
2
Iran
2
China
2
State of Palestine
1
Indonesia
1
Philippines
1
Thailand
1
Oman
1
Pakistan
1 0
1
2
3
4
5
6
7
8
9
Developing country
Figure 7 – The most studied Asian regions
14%
6%
11% 36%
33%
Eastern Asia
South-Eastern Asia
Southern Asia
Western Asia
Eastern Asia
10
Journal Pre-proof Figures 6 and 7 demonstrate that Eastern Asia is underrepresented in the literature, and future studies should focus on east Asian countries, as the characteristics of this region could enable advances in this research field. 4.2 Theoretical Basis and Research Method The majority of the articles examined – 29 articles – did not use theories to build a theoretical background or to support their analysis, discussions or conclusions. Only seven articles adopted such a theory. Of these articles, two used the Resource-Based View Theory, while another two employed Institutional Theory. The Resource-Based View states that organizational resources and capabilities vary between firms, and play a key role as a differentiating factor that can support performance and competitive advantage (Barney, 1991). Institutional Theory focuses on firms’ external environments and shows how pressures from this environment can influence the adoption of practices and actions (DiMaggio and Powell, 1983; Hirsch, 1975; Meyer and Rowan, 1977). These two theories are vital to understanding the internal and external factors that can influence firms’ performance; for this reason, they could be more widely applied in these kinds of studies. Other theories which were applied in only one of the articles include: Diffusion of Innovation Theory (Rogers, 1976; 2003), which describes a product’s innovation life cycle, and different stages which the innovation may go through to gain market acceptance among five different user groups; Ecological Modernization Theory (Huber, 1982; Weale, 1992), which deals with the role of technological innovations, states, and ‘the market’ in environmental reforms; and Other Orientation Theory (Meglino and Korsgaard, 2004), which relates to having higher ‘other orientation’ and lower selfconcern. See Table 3 for a breakdown of theories used in the articles. Table 3 – Theories applied in the articles Theories
Count
Not applied Resource-Based View Theory Institutional Theory Theory of Diffusion of Innovation Ecological Modernization Theory Other Orientation Theory
29 2 2 1 1 1
Total
36
Journal Pre-proof In terms of the quantitative methods adopted to analyze the results, the majority of the articles adopted some variety of structural equation modeling. Structural equation modeling is used to examine the relationships between dependent, multiple variables (Hair Jr et al., 2009). This statistical model is broadly used in the literature and can be useful in analyzing factors that affect performance. The techniques adopted in the articles can be seen below, in Table 4. Table 4 – Quantitative methods applied in the articles Quantitative method
Count
Structural Equation Modeling Regression (including Multiple, and Hierarchical) Dynamic Model Approach Correlation Panel Data Fuzzy Delphi Method
22 7 3 2 1 1
Total
36
4.3 Performance and Sustainable Economic Development in Asian SMEs The articles examined in this work were classified according to their focus in relation to the research question and objectives outlined in Section 1. Table 5 demonstrates how the articles relate to the three focuses of financial performance, environmental/social performance, and financial and environmental/social performance. Of the 36 articles analyzed, 28 include some factor that affects the financial performance of manufacturing firms in Asia. Meanwhile, 5 include factors that influence environmental/social performance, while only 3 present factors which influence both financial and environmental/social performance of firms. Sustainability is based on the synergy and balanced relationships of the social, environmental and financial dimensions. Few studies explored these three pillars simultaneously. Therefore, future studies exploring the complexities of these relationships in Asian manufacturing SMEs are vital. Table 5 – Article focus Author Agan et al. (2013) Aghajari and Senin (2014) Amin et al. (2016) Anwar (2018)
Financial Performance 1 1 1 1
Environmental/Social Performance
Financial and Environmental/Social Performance
Journal Pre-proof Batra and Sharma (2017) Chang and Cheng (2019) Chao and Spillan (2010) Demirbag et al. (2006) Dut (2015) Hernandez (2018) Herzallah et al. (2014) Huang et al. (2013) Hughes et al. (2018) Hung et al. (2015) Jaaffar et al. (2017) Jaiswal and Kumar (2018)
1 1 1 1 1 1 1 1 1 1 1 1
Kaur et al. (2017) Lin and Chen (2007) Mantok et al. (2019) Muafi (2016) Ngui et al. (2008) Nguyen et al (2013) Nguyen et al (2018) Saeidi et al (2018) Sahoo and Yadav (2018) Sajan et al. (2017) Saqib et al (2018) Singh et al (2016b) Singh et al. (2016a) Siriphattrasophon (2018) Tang et al. (2016) Tuanmat and Smith (2011) Valmohammadi (2011) Vu et al. (2018) Yadav et al. (2019) Zeng et al. (2011)
1 1 1
Total
28
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 5
3
Table 5 also demonstrates that the majority of the articles included some factors that influence the financial performance of SMEs in the Asian manufacturing industry. The articles tend to focus more on the factors that positively affect financial performance than those with a negative effect. Figure 8 outlines all the factors that positively (see Table 6, in the Appendix) and negatively (see Table 7, in the Appendix) affect financial performance. The variety of factors identified in the literature were classified into internal and external factors. It is therefore possible to see that the majority of authors describe internal
Journal Pre-proof factors as being the most important for achieving positive financial performance. Conversely, factors that may threaten this performance receive less attention. ********INSERT TABLE 6, 7 and 8 HERE************ The most commonly cited factors that positively influence the financial performance of manufacturing SMEs are innovation and entrepreneurial orientation. Innovation is the most cited factor in relation to firms improving their financial performance (see Table 6 in the Appendix). Business model innovation and open innovation are both relevant types of organizational change (Anwar, 2018; Huang et al., 2013). Anwar (2018), for example, shows that an innovative business model is related to profitability in SMEs in the manufacturing industries of Pakistan and Southern Asia. According to Jaffar et al. (2017), product and administrative innovation are also important factors for improving financial performance. Furthermore, an innovative mindset in managers (Lin and Chen, 2007; Amin et al., 2016) and green organizational innovation (Singh et al., 2016b) are positive factors for financial performance. Another driving factor for improving the financial performance of Asian manufacturing SMEs in Asia is entrepreneurial orientation. Entrepreneurial orientation is an overall strategic stance toward entrepreneurship (Mantok et al, 2019; Hughes et al., 2018; Siriphattrasophon, 2018; Jaaffar et al., 2017; Tang et al., 2016). The entrepreneurial orientation (EO) literature argues that EO’s five competencies, namely innovativeness, proactiveness, risk-taking (Miller, 1983), autonomy, and competitive aggressiveness (Lumpkin and Dess, 1996), when effectively applied in dynamic organizational and environmental conditions, culminate in enhanced firm performance. Moreover, where a firm has successfully adopted an entrepreneurial orientation, it is necessary that they dedicate time and resources to creating and maintaining a conducive learning environment (Mantok et al., 2019). According to Mantok et al. (2019), organizational learning mediates the relationship between entrepreneurial orientation and some metrics of financial performance. Absorptive capacity also mediates this relationship (Hughes et al., 2018). Absorptive capacity is an intervening factor in effective entrepreneurial orientation and improved financial performance (Hughes et al., 2018). The main external factor which positively affects financial performance is government support (see Figure 8). While government support is an important factor to
Journal Pre-proof achieving positive financial performance, the effect of this support varies depending on the type of subsidy (Nguyen et al., 2018). Figure 8 – Factors that positively influence the financial performance of manufacturing SMEs in Asia
To a lesser extent, the articles studied explore factors related to environmental/social performance. Based on Table 8, (see Appendix) it is possible to note the importance of the adoption of lean practices (Sajan et al., 2017; Sahoo and Yadav, 2018; Jaiswal and Kumar, 2018; Yadav et al., 2019). According to Jaiswal and Kumar (2018), lean manufacturing and green manufacturing are based on a philosophy of continuous waste elimination, which is focused on customer and environmental perspectives. An integrated lean green manufacturing system can benefit firms, customers and the natural environment. In summary, innovation, entrepreneurial orientation and governmental support are all important financial drivers of manufacturing SMEs in Asia, while lean manufacturing as a manufacturing approach plays a vital role in environmental/social performance.
Journal Pre-proof 5. Analysis and Conclusions 5.1 Discussion This research topic has gained momentum in recent years, and this increase is notable, because Asian SMEs play vital roles in both economic growth and the achievement of sustainable development goals. This study identifies the internal and external factors which influence financial, social and environmental performance. In terms of financial performance, SME manufacturers in Asia need to invest in innovation in the form of green organizational innovation and open innovation, as well as fostering managers’ innovative capabilities. Furthermore, these SMEs should invest in entrepreneurial orientation, improving on organizational learning, absorptive capacity, market orientation and collective capability. These innovation and entrepreneurial orientation are crucial internal factors for achieving improved financial performance. Another factor which has a direct influence on the financial performance of Asian SMEs is government support. Government support is crucial for SMEs, as they are more fragile than larger enterprises. SMEs need incentives and specific programs to enable them to gain access to credit with appropriate taxes, for example, or to improve their management practices or the capacity of their work force. Some of the internal factors cited above require government support for implementation. Environmental and social performance is also positively influenced by internal and external factors. For example, lean green manufacturing systems have been identified as a factor which positively influences environmental and social performance, making it an important investment for organizations. Green information technologies and the reduction of greenhouse gas emissions are also positively related to improved environmental and social performance. These kinds of practices have a direct impact on environmental performance, as they are applied directly to the production process. Externally, social and market forces drive firms to adopt more sustainable approaches which positively impacts on environmental and social performance. This situation is reflected in the need for an external fit. As in the case of financial performance, SMEs require governmental support and incentives to enable them to move towards more socially and environmentally responsible practices. 5.2 Contributions of the Research Two specific regions in Asia lead the research on sustainable development in SMEs: South-Eastern and Southern Asia. There is thus scope for research on how other
Journal Pre-proof Asian regions are dealing with sustainable development. Given that Asia’s multifaceted governmental policies are drivers of corporate sustainability, this would make an interesting topic for future research. Research on sustainable development in manufacturing SMEs in Asia requires further theoretical development in order to build ideas in a rigorously scientific manner. Taking into account the government’s role in driving sustainable initiatives in Asia, as well as the role of innovation and entrepreneurial orientation to support transactions within SMEs, theories such as Institutional theory, Ecological Modernization, Social Networks and Organizational Learning can help researchers shape and analyze new constructs. Quantitative methods based on analytical modeling, mathematical programming and simulations could also improve this area of research, as these methods can capture the complexity of the triple bottom line perspective; that is, the integration and the trade-offs between economic, environmental and social performance measures. There are a few publications on sustainable development in manufacturing SMEs in Asia that analyze sustainability performance, most of these studies focus on financial performance rather than sustainability performance. In this sense, the use of quantitative research models aligned with operations research could be applied in order to integrate economic, environmental and social performance as a whole. Lean manufacturing systems are a means of helping manufacturing SMEs in Asia to achieve improved environmental/social performance. There is scope for investigation into other sustainable operations management practices that may also contribute to firms’ corporate sustainability. In addition, an exploration of factors that simultaneously improve environmental/social performance and financial performance would also be of benefit. For example, it has been shown that green organizational innovation and green information technologies both boost environmental/social performance and financial performance. This article contributes to the debate on sustainable development in manufacturing SMEs in Asia by identifying the factors that can influence their environmental/social and financial performance. By and large, innovation and entrepreneurial orientation, governmental policy and support, and lean manufacturing systems are among the important factors which drive manufacturing SMEs in Asia towards improved financial and social/environmental performance. In addition, this article presents possible avenues for future research.
Journal Pre-proof 5. 3 Research Agenda Based on the findings discussed, it is possible to suggest some areas of future research in the field of sustainable development in manufacturing SMEs in Asia.
Future research should be built on theory-driven research utilizing the following theories: Institutional Theory, Ecological Modernization Theory, Social Networks Theory, and Organizational Learning Theory.
The use of quantitative research methods in operational research could help capture the complex concept of the triple bottom line, furthering our understanding of Asian manufacturing SMEs’ journey towards sustainable development performance.
Few studies explore the three pillars of sustainability simultaneously. It is imperative that future studies explore this relationship.
Technological and relational capabilities are important for SMEs wishing to pursue corporate sustainability; therefore, there is scope for examining the use of digital and virtual technologies to integrate Asian SMEs, supporting management of resource flow across supply chains. SMEs are distinct from large enterprises; for example, they have more resource limitations. Therefore, it would be interesting to investigate the technological and relational capabilities needed to pursue corporate sustainability, considering SMEs’ particular characteristics.
There are sustainable operations management approaches, such as sustainable supply chains and circular economy, which could be analyzed as potential pathways for manufacturing SMEs in Asia to achieve sustainable performance.
The multifaceted local and national environmental and financial policies in Asia could be analyzed as a means of manufacturing SMEs pursuing sustainable development goals.
5.4 Limitations of the Study This article has certain inherent limitations; in particular, factors related to the selection of keywords, as expressed in the keyword combinations presented in Chart 1, in the search for articles in the Scopus database, and the cognitive process used to identify and analyze content from the articles selected. These limitations should be noted by scholars as they continue to investigate this important and timely topic, the
Journal Pre-proof aforementioned future research directions, and the various themes listed in the call for papers for this special edition of IJPE.
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APPENDIX
TOTAL
Sahoo and Yadav (2018)
Saeidi et al (2018)
Nguyen et al (2018)
Nguyen et al (2013)
Ngui et al. (2008)
Muafi (2016)
Mantok et al. (2019)
Lin and Chen (2007)
Kaur et al. (2017)
Jaiswal and Kumar (2018)
Jaaffar et al. (2017)
Hung et al. (2015)
Hughes et al. (2018)
Huang et al. (2013)
Herzallah et al. (2014)
Hernandez (2018)
Dut (2015)
Demirbag et al. (2006)
Chao and Spillan (2010)
Chang and Cheng (2019)
Batra and Sharma (2017)
Anwar (2018)
Amin et al. (2016)
Aghajari and Senin (2014)
Factors (Positive effect on financial performance)
Agan et al. (2013)
Table 6 – Factors with positive effects on the financial performance of manufacturing SMEs in Asia
Internal factors Manufacturing technology
1
Organizational strategy Environmental Management System
X
3
X
1
Entrepreneurial orientation
X
Absorptive capacity
X
X
X
5 1
Flexibility of components of manufacturing system
X
1
Exportation
X
Green IT
1
X
1
Green process
1
Green organizational innovation
1
Innovation Collective capability Market orientation practice Integrated lean green manufacturing system (LGMS)
X
X
X
X
X
X
X X
X
8 1
X
2 X
1
Adoption of lean practices
X
Firm's readiness for Internationalization Organizational identity
2 1
X
1
Organizational Learning Capability Organizational Sustainability
X
X
2 1
Total Quality Management Practices
X
X
Quality and flexibility priorities
3 X
1
External factors Government Reforms and support
X
X
Market
3 1
Strategic Alliances
X
1
Competitive Environment None
X
1 X
X
4
Factors (Negative effect on financial performance)
None X X X X X X X
High level of bribery
X X X X X X X X X X X X X
Cancellation of subsidies from government
X X
Corruption X
Social forces X
X
TOTAL
Sahoo and Yadav (2018)
Saeidi et al (2018)
Nguyen et al (2018)
Nguyen et al (2013)
Ngui et al. (2008)
Muafi (2016)
Mantok et al. (2019)
Lin and Chen (2007)
Kaur et al. (2017)
Jaiswal and Kumar (2018)
Jaaffar et al. (2017)
Hung et al. (2015)
Hughes et al. (2018)
Huang et al. (2013)
Herzallah et al. (2014)
Hernandez (2018)
Dut (2015)
Demirbag et al. (2006)
Chao and Spillan (2010)
Chang and Cheng (2019)
Batra and Sharma (2017)
Anwar (2018)
Amin et al. (2016)
Aghajari and Senin (2014)
Agan et al. (2013)
Table 7 – Factors with negative effects on the financial performance of manufacturing SMEs in Asia
1
1
1
1
32
Factors (Positive effect on environmental/social performance)
None X X X X
Lean green manufacturing systems Green information technologies Reduction of greenhouse gas emissions
X X X X X X X X X X X
External fit
X X X X
Internal factors
X
X
X
X X
TOTAL
Lean practices Sahoo and Yadav (2018)
Saeidi et al (2018)
Nguyen et al (2018)
Nguyen et al (2013)
Ngui et al. (2008)
Muafi (2016)
Mantok et al. (2019)
Lin and Chen (2007)
Kaur et al. (2017)
Jaiswal and Kumar (2018)
Jaaffar et al. (2017)
Hung et al. (2015)
Hughes et al. (2018)
Huang et al. (2013)
Herzallah et al. (2014)
Hernandez (2018)
Dut (2015)
Demirbag et al. (2006)
Chao and Spillan (2010)
Chang and Cheng (2019)
Batra and Sharma (2017)
Anwar (2018)
Amin et al. (2016)
Aghajari and Senin (2014)
Agan et al. (2013)
Table 8 – Factors with positive effects on the environmental/social performance of manufacturing SMEs in Asia
X 3
1
1
1
Social and market forces External factors
1
Government support 1
1
28