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Cited by 64Corporate Social Responsibility ReportingEnvironmental Sustainability in BusinessSustainable Finance and Green Bonds

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Environmental Sustainability Commitment and Access to Finance by Small and Medium Enterprises: The Role of Financial Performance and Corporate Governance

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Dzomonda, Obey·2022·Sustainability
DOI 10.3390/su14148863
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Abstract

Small and Medium Enterprises in South Africa contribute critically to the economy, yet they face many challenges, such as lack of access to external finance. Thus, applying the stakeholder theory, this study tested the relationship between environmental sustainability commitment and access to finance and whether this relationship was mediated by financial performance. The study further examined the moderating role of corporate governance on the relationship between environmental sustainability commitment and access to finance. Owner/managers of 600 SMEs from three provinces in South Africa were randomly selected using a probability sampling method. Primary data were collected using self-administered questionnaires. The moderated mediation model was tested using PLS-SEM. The findings showed that environmental sustainability commitment significantly predicts access to finance both directly and indirectly through financial performance. Moreover, the results showed that corporate governance positively moderates the link between environmental sustainability commitment and access to finance. This study has several implications. Practically, small unlisted firms can adopt and apply the model developed in this study to enhance their environmental, social, and governance practices to unlock external funding. The novelty of this study is that it proposed and tested a moderated mediation model to understand SMEs’ determinants of access to finance. In addition, this study provides a nuanced understanding of responsible business through green behaviour in the context of SMEs, which has been lacking in the existing literature.

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Metadata

Authors
Dzomonda, O.
Affiliations
University of Limpopo (ZA)
Corresponding author
Dzomonda, Obey
ORCID
Dzomonda, Obey
Venue
Sustainability
Publisher
MDPI AG
Published
2022-07-20
Volume
14
Issue
14
Pages
8863
ISSN
2071-1050 (ISSN-L)
DOI
10.3390/su14148863
OpenAlex
W4286208981
Cited by
64
References
2
Citations by year
2026: 13 · 2025: 22 · 2024: 19 · 2023: 8 · 2022: 2
FWCI
9.52
Type
journal article
Language
en
Open access
Licence
Locations
  • Sustainability (publishedVersion, cc-by)
  • RePEc: Research Papers in Economics (submittedVersion)
  • DOAJ (DOAJ: Directory of Open Access Journals) (submittedVersion, cc-by-sa)
Topics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Social Responsibility Reporting
  • Social Sciences › Business, Management and Accounting › Marketing › Environmental Sustainability in Business
  • Social Sciences › Economics, Econometrics and Finance › Finance › Sustainable Finance and Green Bonds
Keywords
access to finance, small and medium-sized enterprises, financial performance, corporate governance, moderated mediation, stakeholder theory, green behaviour, responsible business, SME financing, South Africa

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Dzomonda, O. (2022). Environmental Sustainability Commitment and Access to Finance by Small and Medium Enterprises: The Role of Financial Performance and Corporate Governance. Sustainability. https://doi.org/10.3390/su14148863