Government Support and SME Sustainability: The Interplay of Financial and Green Dimensions

Document Type : Original Article

Authors

1 Assistant Professor of Accounting, Payame Noor University, Tehran, Iran.

2 Department of Accounting, National University of Skill, Tehran, Iran

3 Master degree, Department of Management, Payame Noor University, Tehran, Iran

Abstract

This study investigates the relationship between government support and organizational sustainability through dual financial and green lenses. While government interventions—such as financial aid, training, tax incentives, and advisory services—are widely recognized as enablers of small and medium enterprise (SME) resilience, their nuanced roles in fostering both financial viability and environmental stewardship remain underexplored. Drawing on a descriptive-correlational design, the research employs a quantitative field survey targeting 384 employees of executive agencies in Kerman Province, Iran, selected via Cochran’s formula. Data were collected using a validated questionnaire (adapted from Islam et al., 2024) with a 5-point Likert scale and analyzed through structural equation modeling in Smart PLS and SPSS. Findings reveal that government support significantly enhances organizational sustainability, mediated by financial literacy and green value co-creation. Specifically, financial literacy strengthens organizations’ capacity to interpret and utilize public support effectively, thereby improving long-term economic stability. Similarly, government-backed initiatives that encourage green practices foster shared environmental and social value, reinforcing sustainability outcomes. Notably, while access to financial resources was positively influenced by government support, it did not directly mediate sustainability—suggesting that mere availability of capital is insufficient without strategic financial competence. The study corroborates prior work by Arshad et al. (2020) and Yeh & Kulatong (2019) but challenges conclusions by Beck & Demirguç-Kunt (2006), highlighting context-dependent dynamics in public support efficacy. Theoretically, the research integrates sustainability, resource-based, and stakeholder perspectives to demonstrate how policy-driven support, when coupled with internal capabilities (e.g., financial literacy) and collaborative green innovation, can drive holistic organizational sustainability. Practically, findings urge policymakers to design integrated support programs that simultaneously build financial acumen and incentivize eco-innovation. For organizations, investing in financial education and green co-creation with stakeholders emerges as a strategic pathway to resilience. This study contributes to the growing discourse on sustainable development by empirically linking public policy, financial behavior, and environmental responsibility in emerging economies.

Keywords

Main Subjects

References

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Green Development Management Studies
Volume 4, Special Issue
November 2025
Pages 127-144

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History

  • Receive Date: 09 April 2025
  • Revise Date: 29 April 2025
  • Accept Date: 15 October 2025

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