Digital Marketing Capabilities and MSME Performance: Implications for Environmental Sustainability — Evidence from MSMEs in Uttarakhand, India

Abstract

Digital technologies are revolutionizing business operations of Micro, Small and Medium Enterprises (MSMEs) in particular among the businesses with emerging economy settings that are characterized by infrastructural and resource limitations. This paper analyses the effects of digital marketing capabilities on the performance of MSMEs and its consequences on environmental sustainability using the evidence of MSMEs in Uttarakhand, India. Based on the Resource-Based View (RBV), and the Balanced Scorecard (BSC), the research uses the Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine the primary data of 293 MSMEs. The findings reveal that digital marketing capabilities significantly enhance MSME performance (β = 0.765, p < 0.001). MSME performance further drives environmental sustainability outcomes, including resource efficiency, waste reduction, and eco-friendly practices. The results confirm a mediation mechanism, indicating that digital marketing contributes to sustainability indirectly through performance improvements. This study points out that digital marketing is not only a performance-enhancing activity, but also a pathway to sustainable business practices. The results have significant implication to MSMEs and policy makers in the emerging economy regions.