This study aims to investigate how external resources, specifically social capital and government support, influence sustainable performance in small and medium-sized enterprises (SMEs) in Vietnam, an emerging economy. Drawing on social capital theory (SCT) and dynamic capabilities theory (DCT), the study examines the direct effects of relational and institutional resources on internal capabilities, including absorptive capacity, digital transformation and green innovation that drive sustainable performance.
The study uses survey data collected from 439 SMEs operating in Vietnam’s Southern Key Economic Zone. The proposed research model was analysed using partial least squares structural equation modelling.
The results show that social capital has a significant positive effect on absorptive capacity, digital transformation and sustainable performance. Government support positively influences green innovation and sustainable performance, although it does not directly affect digital transformation. While digital transformation is a powerful driver of sustainability, green innovation shows no significant direct impact, indicating an implementation gap common in transitional markets. Absorptive capacity also significantly promotes green innovation; however, its direct effect on sustainable performance is not statistically significant.
This study offers a novel integrated theoretical explanation of how social capital and government support are transformed into sustainable performance through dynamic capabilities. By combining SCT and DCT in an emerging-economy context, the research provides new insights into the differentiated roles of absorptive capacity, digital transformation and green innovation. It also identifies digital transformation as a key mechanism for achieving sustainability.
