The Nexus of Sustainability Innovation, Knowledge Application, and Entrepreneurial Success: Exploring the Role of Environmental Awareness

Small and medium-sized enterprises (SMEs) are pivotal in driving economic growth and sustainability, necessitating a strategic focus on innovation and knowledge application to navigate dynamic markets effectively. Grounded in the Natural Resource-Based View (NRBV) and Knowledge-Based View (KBV) theories, this study investigates the interplay between sustainability innovation, knowledge application, environmental awareness, and entrepreneurial success among SMEs in Turkey. The research adopts a cross-sectional design, using purposive sampling to survey 402 SME owners and managers from Istanbul and Ankara. Data were collected via electronic surveys and analyzed using SPSS and AMOS to validate the measurement model and test hypotheses through the PROCESS macro for mediation and moderated mediation analysis. The findings reveal that sustainability innovation significantly enhances entrepreneurial success by allowing businesses to develop products and services that address environmental and social concerns. Essentially, by integrating sustainability innovation, entrepreneurs create a growing market demand for eco-conscious solutions. Moreover, knowledge application positively influences entrepreneurial success and mediates the relationship between sustainability innovation and entrepreneurial success. Environmental awareness moderates this mediation, with the indirect effect being stronger for SMEs with higher environmental awareness. These results underscore the critical role of integrating sustainability and knowledge-driven strategies in achieving entrepreneurial success. Practical implications include fostering eco-innovation, enhancing knowledge-sharing practices, and promoting environmental awareness to achieve sustainable business growth and competitiveness in resource-constrained environments. This research provides actionable insights for policymakers and practitioners to support sustainable entrepreneurship.