Servant Leadership and Sustainability: A Mediated-Moderated Model in the Context of Pakistani SMEs

Ethe Raj. P

doi:10.69565/jems.v4i2.419

Authors

Ethe Raj. P Putra Business School, Senior Lecturer, Malaysia

DOI:

https://doi.org/10.69565/jems.v4i2.419

Keywords:

Servant Leadership, Environmental Performance, Green Absorptive Capacity, Sustainability, SMEs, Pakistan, Green Knowledge Assimilation, Structural Equation Modelling (SEM)

Abstract

This study explores the impact of servant leadership on environmental performance in Pakistani small and medium-sized enterprises (SMEs), with green absorptive capacity (GAC) as a mediator and the regulatory framework as a moderator. Grounded in the resource-based view (RBV) and institutional theory, the study positions servant leadership as a key enabler of sustainability through the acquisition and application of green knowledge. Data were collected from 148 SMEs and analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). Results show that servant leadership significantly enhances environmental performance, partially mediated by GAC. Moreover, the regulatory framework strengthens this relationship, indicating that well-enforced environmental policies amplify leadership-driven sustainability outcomes. The study addresses critical gaps in emerging economy contexts, where SMEs often lack formal environmental systems and institutional support. It contributes to the literature by integrating leadership behaviour, knowledge capabilities, and regulatory influence into a cohesive framework. The findings offer practical implications for SME managers and policymakers seeking to align leadership development with green strategy under resource-constrained conditions.

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