Understanding the Impact of Sustainability Practices on Export Performance: A Case of Industrial Exporting Firms in Sri Lanka

Abstract

The export sector in Sri Lanka relies heavily on industrial exporters who are increasingly facing global pressure to adopt sustainability practices in response to elevating international standards of sustainable development. This study investigates how economic, social, and environmental sustainability practices impact export performance among industrial exporting firms located in Katunayake, Seethawaka, Biyagama, and Horana export processing zones registered under the Board of Investment Sri Lanka, during the period from 2017 to 2021. Drawing on the Triple Bottom Line Framework, this study employed survey data from 80 firms and applied Structural Equation Modelling to analyze the impact of sustainability practices on export performance at the firm level. Study findings reveal that economic and social sustainability practices enhance export performance, while environmental sustainability practices pose significant challenges to industrial exporting firms in Sri Lanka. Insights from this study would be useful to enhance export performance and develop forward-looking sustainability strategies across industrial sectors in Sri Lanka, extending beyond the studied zones and sustainable even under challenging economic conditions.