Transformational leadership dimensions impact on sustainable performance of manufacturing SMEs in developing countries: Environmental performance as a mediator
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Yahya Ali Al-Dhobee 1 * , Safwan Ali Al-Dhobee 2 , Ali Yahya Al-Oleki 2 , Majid Goaill 3 , Mohammed Almakradi 2
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1 Center of Business Administration, Sana’a University, YEMEN2 Department of Financial and Banking Sciences, Thamar University, Thamar, YEMEN3 Department of Marketing Sciences, Thamar University, Thamar, YEMEN* Corresponding Author
Abstract
Sustainable development has emerged as a strategic priority globally, with environmental responsibility increasingly linked to business competitiveness. For manufacturing small and medium-sized enterprises (SMEs), aligning economic and environmental objectives is essential for long-term viability. Grounded in the Resource-Based View (RBV), this study examines how transformational leadership (TL) dimensions—Charisma, Inspirational Motivation, Intellectual Stimulation, and Individualized Consideration—affect both Environmental Performance (EP) and Economic Performance (ECONP), and explores EP’s mediating role in these relationships. Survey data from 199 SME owners and managers in Yemen were analyzed using partial least squares structural equation modeling (PLS-SEM) via SmartPLS. The results reveal that TL dimensions exert differentiated effects on EP and ECONP, with EP significantly mediating these pathways. These findings underscore the contextual nature of leadership’s impact on sustainable performance and highlight the strategic value of environmental initiatives in enhancing profitability. The study offers actionable insights for SME leaders and policymakers, advocating for context-sensitive leadership practices and targeted policy interventions to strengthen SMEs’ contributions to sustainable development.
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Article Type: Research Article
EUR J SUSTAIN DEV RES, Volume 10, Issue 2, 2026, Article No: em0372
https://doi.org/10.29333/ejosdr/17840
Publication date: 01 Apr 2026
Online publication date: 03 Feb 2026
Article Views: 37
Article Downloads: 17
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How to cite this article
APA
Al-Dhobee, Y. A., Al-Dhobee, S. A., Al-Oleki, A. Y., Goaill, M., & Almakradi, M. (2026). Transformational leadership dimensions impact on sustainable performance of manufacturing SMEs in developing countries: Environmental performance as a mediator. European Journal of Sustainable Development Research, 10(2), em0372. https://doi.org/10.29333/ejosdr/17840
Vancouver
Al-Dhobee YA, Al-Dhobee SA, Al-Oleki AY, Goaill M, Almakradi M. Transformational leadership dimensions impact on sustainable performance of manufacturing SMEs in developing countries: Environmental performance as a mediator. EUR J SUSTAIN DEV RES. 2026;10(2):em0372. https://doi.org/10.29333/ejosdr/17840
AMA
Al-Dhobee YA, Al-Dhobee SA, Al-Oleki AY, Goaill M, Almakradi M. Transformational leadership dimensions impact on sustainable performance of manufacturing SMEs in developing countries: Environmental performance as a mediator. EUR J SUSTAIN DEV RES. 2026;10(2), em0372. https://doi.org/10.29333/ejosdr/17840
Chicago
Al-Dhobee, Yahya Ali, Safwan Ali Al-Dhobee, Ali Yahya Al-Oleki, Majid Goaill, and Mohammed Almakradi. "Transformational leadership dimensions impact on sustainable performance of manufacturing SMEs in developing countries: Environmental performance as a mediator". European Journal of Sustainable Development Research 2026 10 no. 2 (2026): em0372. https://doi.org/10.29333/ejosdr/17840
Harvard
Al-Dhobee, Y. A., Al-Dhobee, S. A., Al-Oleki, A. Y., Goaill, M., and Almakradi, M. (2026). Transformational leadership dimensions impact on sustainable performance of manufacturing SMEs in developing countries: Environmental performance as a mediator. European Journal of Sustainable Development Research, 10(2), em0372. https://doi.org/10.29333/ejosdr/17840
MLA
Al-Dhobee, Yahya Ali et al. "Transformational leadership dimensions impact on sustainable performance of manufacturing SMEs in developing countries: Environmental performance as a mediator". European Journal of Sustainable Development Research, vol. 10, no. 2, 2026, em0372. https://doi.org/10.29333/ejosdr/17840