Going further, looking ahead, and with others : how context shapes sustainability-oriented outcomes in start-ups and SMEs

Abstract

Sustainable entrepreneurship has emerged in response to the intersecting crises of environmental degradation, social inequality, and economic instability. Nevertheless, entrepreneurs working to create more sustainable businesses do not act in isolation. Their efforts are shaped by the contexts in which they operate: where, when, and with whom. This dissertation examines how spatial, temporal, and social contexts, as generative structures, influence sustainability-oriented outcomes for start-ups and small and medium-sized enterprises (SMEs). It comprises four studies that examine how context has been empirically conceptualised in the sustainable entrepreneurship literature; how organisational temporal context enables or constrains the implementation of sustainability practices; how geographical distance influences the realisation of impact investments; and how different ways of engaging with stakeholders affect firms’ environmental performance.

The dissertation theorises the role of context by drawing on transaction cost theory, construal level theory, the attention-based view of the firm, and stakeholder theory. It employs a systematic review, matched-sample logistic regression, and structural equation modelling, using original datasets from established SMEs and venture capital deals involving impact investors and start-ups. The findings reveal that context generates various outcomes through distinct mechanisms such as transaction costs economising, construal level effects, attentional orientation, attentional governance, and unidirectional and bidirectional engagement. By theorising context, this dissertation provides a foundation for future research on the dynamic interplay between context and sustainability. It also offers strategic guidance for entrepreneurs, investors, and policymakers. They can design interventions and strategies that not only adapt to context but actively shape it by understanding how context works through specific mechanisms. This shift from reacting to context as a constraint to mobilising it as a resource enables more effective and transformational responses to complex socio-environmental challenges.