SME Sustainability Performance Through Digital Transformation: The Roles of FinTech Adoption, Digital Resources, Sustainability Orientation, and Green Innovation

Abstract

Achieving sustainability performance has become a strategic imperative for small and medium-sized enterprises (SMEs) as they strive to balance economic competitiveness with environmental stewardship and social responsibility in an increasingly dynamic business environment. Although Fintech adoption is widely associated with improved operational efficiency and financial accessibility, its role in sustainability performance remains insufficiently understood. This study examines the relationship between fintech adoption and digital resources and their contribution to sustainability performance in Malaysian SMEs through the mediating roles of commitment to sustainability orientation and green innovation. Drawing on the Resource-Based View and Dynamic Capabilities Theory, data were collected from 250 SMEs and analysed using a hybrid Partial Least Squares Structural Equation Modelling (PLS-SEM) and Artificial Neural Network (ANN) approach. The PLS-SEM results reveal that fintech adoption and digital resources are not directly associated with sustainability performance; instead, their relationships with sustainability performance are fully mediated by commitment to sustainability orientation and green innovation, with green innovation representing the stronger mediating mechanism. The ANN analysis corroborates the PLS-SEM findings and further demonstrates that digital resources are the strongest predictor of commitment to sustainability orientation, Fintech adoption is the most influential predictor of green innovation, and green innovation is the primary predictor of sustainability performance. These findings support the resource–capability–performance perspective by indicating that the sustainability value associated with digital-financial resources depends on their alignment with organizational capabilities. The study contributes to the fintech and SME sustainability literature by integrating explanatory and predictive analytical approaches to provide a more comprehensive understanding of digital transformation and sustainability. Practically, the findings suggest that SME managers and policymakers should complement digital technology adoption with sustainability-oriented strategies and green innovation initiatives to support long-term sustainability performance.