Business Model Innovation and Sustainable Small and Medium Enterprises Performance in Developing Economies: A Systematic Review

Abstract

The pursuit of sustainable performance among small and medium-sized enterprises (SMEs) has become increasingly important in developing economies that face persistent institutional constraints, yet existing evidence on the relationship between business model innovation (BMI) and sustainable performance remains fragmented and inconsistent. Drawing on Dynamic Capabilities Theory and Stakeholder Theory, this study synthesises the empirical literature to clarify how, and under what conditions, BMI contributes to the sustainable performance of SMEs. Adopting the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) framework, peer-reviewed articles published between 2014 and 2026 were identified from Scopus, Web of Science, and Google Scholar, yielding 37 empirical studies for thematic synthesis. The synthesis identified five dominant themes: BMI as a driver of sustainable performance; sustainable performance as a multidimensional construct; the mediating role of green and eco-innovation; digital transformation as a facilitator of BMI; and the transition toward integrated, sustainability-focused business models. Digital transformation and green innovation emerged as key mediating mechanisms, while access to finance, institutional support, and technological capability operated as significant contextual moderators. The findings indicate that BMI enhances financial, environmental, and social performance by reconfiguring value creation, delivery, and capture, but that this relationship is context-dependent and contingent on the alignment between internal dynamic capabilities and external stakeholder expectations. Because the reviewed evidence is geographically concentrated in Nigeria, generalisability remains limited. The review contributes an integrated, theory-grounded synthesis that maps context-specific pathways for sustainable BMI adoption, with practical implications for managers and policymakers in developing economies.