Determinants of Business Interest in Sustainable Entrepreneurship in a Transition Economy

Abstract

This study investigates how environmentally sustainable and socially responsible entrepreneurship is perceived and prioritized within the Albanian business community and explores the factors that may further support it. Based on 200 structured surveys of business representatives (each responding on behalf of a different Albanian company), this study examines how IT support and sustainability orientation affect the perceived importance and current implementation of sustainability practices. These practices include environmental practices such as waste and water management, economic aspects such as responsible growth and stakeholder collaboration, and social responsibility initiatives related to employee development, inclusion, and community engagement. The study also investigates how perceived reporting limitations affect perceived economic and circular-economy opportunities in Albanian firms. To examine the underlying structure of these dimensions, a Principal Component Analysis (PCA) was first conducted on the listwise-complete subset of the sample (n = 152), followed by a Confirmatory Factor Analysis (CFA) and Structural Equation Modeling (SEM) on the full sample (n = 200). The analysis identified six latent factors, including Ecological, Social, and Economic Sustainability, Ecological, Social, and Economic Sustainability, IT Support for Sustainability, Limitations in Sustainability Reporting, Circular Economy Activities and Opportunities, Economic Opportunities and Benefits of Sustainability Reporting (KMO = 0.903; Bartlett’s χ2(1378) = 6746.19, p < 0.001) with excellent internal consistency (Cronbach’s α = 0.813–0.946). SEM revealed that IT support for Sustainability (β = 0.42) and Ecological–Social–Economic Sustainability Orientation (β = 0.47) together account for 56% of the variance in the perceived importance of sustainability implementation drivers, while perceived reporting limitations are negatively associated with both perceived economic opportunities and circular economy activities. Overall, the findings suggest that Albanian businesses are increasingly aware of the importance of sustainable entrepreneurship and recognize the potential of the circular economy and sustainability reporting. However, realizing this potential may depend on enhancing internal capabilities, particularly IT support and strategic orientation, while simultaneously improving the institutional environment so that sustainability can become a mainstream notion.