The effect of entrepreneurial leadership traits on corporate sustainable development and firm performance: a resource-based view

Abstract

Purpose

This study aims to empirically assess entrepreneurial leadership skills’ role in Corporate Sustainable Development (CSD) and firm performance (FP). This study considers five specific entrepreneurial traits: innovativeness, creativity, analytical thinking, emotional intelligence and passion and motivation. The motivation for this investigation stems from concerns over micro-firms vulnerabilities and small and medium enterprises (SMEs) lacking proper leadership skills. This study is guided by the resource-based view theory and conducted during the pandemic, offering insights into firms operating under constrained conditions.

Design/methodology/approach

Confirmatory factor analysis and structural equation modeling (SEM), were used on survey responses from 321 Bahraini firms. This study’s data collection occurred under environmental uncertainties due to the pandemic and provides a unique context for understanding CSD and entrepreneurial leadership skills under high business/environmental uncertainty.

Findings

The findings reveal that entrepreneurial leadership skills positively impact CSD and firm performance through creativity, passion and motivation. However, innovativeness negatively affects CSD and FP. Furthermore, CSD positively influences firm performance.

Research limitations/implications

Theoretical and practical implications, plus limitations, are also discussed in this study.

Practical implications

Understanding entrepreneurial leadership skills effect on CSD and firm performance in SMEs is important as SEMs are prone to fail in the early years. This study’s findings and its implications help guide SME leaders in furthering their entrepreneurial leadership skills to foster CSD and firm performance.

Originality/value

This study contributes to comprehending the crucial role of entrepreneurial skills, during uncertain times of the pandemic, for SMEs’ survival. It provides valuable insights for firms operating in competitive environments, offering a unique perspective on the required entrepreneurial skills and their effect on CSD and firm performance.

Citation

Razzaque, A., Lee, I. and Mangalaraj, G. (2024), "The effect of entrepreneurial leadership traits on corporate sustainable development and firm performance: a resource-based view", European Business Review, Vol. 36 No. 2, pp. 177-200. https://doi.org/10.1108/EBR-03-2023-0076