Beyond Linear Paths: Configurations of Networks, Knowledge, and Dynamic Capabilities for Sustainable MSMEs

ABSTRACT Despite extensive research on entrepreneurial business networks (EBNs), knowledge management (KM), and dynamic capabilities (DC), three questions remain theoretically underdeveloped and empirically unexplored in resource‐constrained MSMEs. These concern the integrative mechanisms through which EBN and KM jointly cultivate DC, the differential mediation logic of DC across sustainability outcome types, and the configurational pathways through which these constructs collectively produce sustainability outcomes. Using PLS‐SEM and fsQCA on data from 316 manufacturing MSMEs in Uttar Pradesh, India, this study finds that DC fully mediates the effects of EBN and KM on sustainable competitiveness (SComP), whereas sustainable performance (SP) retains direct network and knowledge effects, reflecting its operational proximity to resource inputs. The necessity analysis confirms no single condition is individually necessary for high SP, and fsQCA reveals nine equifinal configurations, showing that high SP is achievable through multiple strategic routes. These findings offer actionable insights for managers and policymakers in emerging‐economy contexts.