Green impact: Unveiling the influence of social and environmental values on sustainable entrepreneurship within regulatory boundaries

Abstract

Amid rising global concerns around social inequality and environmental degradation, this study examines the impact of social entrepreneurship orientation (SEO) and environmental orientation (EO) on sustainability outcomes among firms in Ecuador—an emerging economy with a progressive regulatory framework. Drawing on data from 474 Ecuadorian firms across multiple sectors, this study investigates the influence of distinct dimensions of SEO-social innovativeness, risk-taking, proactiveness, and socialness on social performance, as well as the impact of internal and external dimensions of EO on green innovation performance (GIP). Based on partial least squares structural equation modelling, the findings reveal that among SEO dimensions, socialness, defined as the centrality of social mission, exerts the strongest positive influence on social performance. External EO, reflecting responsiveness to stakeholders and regulatory pressures, significantly predicts GIP, whereas internal EO demonstrates no significant effect. Furthermore, regulatory forces positively influence both social performance and GIP and function as critical institutional drivers in shaping sustainable business practices. Moreover, social performance significantly enhances green innovation outcomes, reinforcing the interconnectedness of social and environmental priorities in corporate sustainability. By integrating strategic orientations and institutional pressures, this study advances the understanding of how sustainable entrepreneurship unfolds in emerging markets and provides practical implications for firms and policymakers seeking to align profit, purpose, and environmental responsibility.