Relationship between sustainable development indicators and SMEs’ development indicators: Evidence from the EU countries

This study aims to identify whether achieving sustainable development goals influences SMEs’ development and assess its degree. The dataset on SMEs’ development indicators and SDGs 2, 8, 9, 12, and 13 for the panel of EU-27 countries in 2011–2020 was collected using Eurostat and OECD datasets. Breusch and Pagan Lagrangian multiplier test for pooled OLS/panel data random effects and Hausman test for fixed/random effects were utilized. The results were in favor of random effect GLS regression for SDG2 models, SDG9 models, and SDG12-13 (Model 1) and fixed effect GLS regression for SDG8 models and SDG12-13 (Model 2), respectively. Based on bibliometric analyses using VOSViewer 14 and a comprehensive literature review, 19 independent variables have been selected from the “Sustainable development indicators” catalog covering five sustainable development goals; SMEs’ turnover and SMEs’ employees employed are used as the dependent variables to reflect SMEs’ development. The empirical evidence suggests a significant relationship between individual sustainable development and SMEs’ development indicators. It was found that all seven sustainable development indicators of SDG 2 (Zero hunger) and SDG 12 (Responsible consumption and production) have a significant relationship with the indicators of SMEs’ development. Instead, only a part (8 out of 13) of the sustainable development indicators of SDG 8 (Decent work and economic growth), SDG 9 (Industry, innovation and infrastructure), and SDG 13 (Climate action) have a significant relationship with two or one of the SMEs’ development indicators. Therefore, achieving sustainability goals stimulates the development of SMEs itself. AcknowledgmentThis study is supported by the British Academy’s Researchers at Risk Fellowships Program (Award Reference: RaR\100673).