The influence of local embeddedness on the economic, social, and environmental sustainability practices of regional small firms

ABSTRACT Despite growing research on economic, social, and environmental sustainability, few studies explore all three sustainability pillars and implemented practices, in the context of regional small firms. This study uses a novel integration of two theoretical concepts, local embeddedness, and sustainability embeddedness orientation, to fill this knowledge gap. Using 26 interviews, the study highlights the nuanced interconnectedness of three new theoretical concepts that link local embeddedness and sustainability embeddedness – locally embedded sustainability values, spatially-driven sustainability and locally adapted sustainability. An integrated theoretical framework is provided that uses the three new concepts to explain how and why small firm local embeddedness in regional communities influences their sustainability embeddedness orientations and implementation of sustainability practices. Small firms were found to have an embedded orientation of economic sustainability, as it was core to the firms’ values, strategies, and the practices, and was influenced by the region’s locally embedded sustainability values. The region’s values afforded locally adapted sustainability for all three pillars, where owners decide whether to pursue an embedded or emergent orientation when picking social and environmental sustainability practices to implement. The practical implications of the study are that regional small firms need additional support to encourage further embedding of these sustainability practices.