The Impact of Proactive Environmental Strategies on Business Model Innovation and SME Performance

ABSTRACT Past research on the impact of environmentally proactive strategy on SME performance found a positive and significant relationship but the underlying mechanism of this relationship is not yet fully understood. In this study, we adopt a natural resource‐based view (NRBV) logic and argue that business model innovation (BMI) is the overlooked mechanism underlying the relationship between pro‐environmental strategies (PES) and SME economic performance. We test our hypotheses on a sample of 363 Polish SMEs, using structural equation modelling. We find support for the positive relationship between PES and performance via BMI. Moreover, we find that competitive intensity moderates this relationship. Our study contributes to the literature by highlighting that SMEs can benefit from the adoption of PES as a way of boosting their image, competitiveness, and performance, but specifically by innovating their business model.