A Quantitative Analysis of the Relationship Between Entrepreneurial Bricolage, Frugal Innovation, and Sustainable Entrepreneurship

Abstract

Small and medium-sized enterprises (SMEs) are broadly recognized as essential pillars of social equity, technological advancement, and economic progress, particularly within developing and emerging economies. Despite their significance, SMEs encounter considerable challenges in pursuing sustainable entrepreneurial practices, largely due to acute resource scarcity, institutional shortcomings, and intensifying environmental demands. This study explores the key entrepreneurial strategies that enable SMEs to effectively address and overcome these constraints. In particular, it develops and empirically tests a comprehensive model that examines both the direct and indirect influence of entrepreneurial bricolage defined as the creative utilization of available resources on sustainable entrepreneurship. Within this model, entrepreneurial orientation, reflecting a firm’s propensity toward innovation, proactiveness, and risk-taking, is examined as a moderating factor, while frugal innovation the capability to generate value with minimal resources is investigated as a mediating mechanism. Drawing on the Resource-Based View, Effectuation Theory, and Dynamic Capabilities Theory, the study adopts a positivist philosophical stance and employs a cross-sectional research design. Data were collected through purposive sampling from 300 owners and managers of SMEs operating in Pakistan, using well-established and validated measurement instruments. The data were analyzed using partial least squares structural equation modeling (PLS-SEM). The findings indicate that entrepreneurial bricolage has a strong and positive effect on sustainable entrepreneurship. Importantly, frugal innovation fully mediates this relationship, suggesting that bricolage contributes to sustainability primarily by enabling the development of affordable, efficient, and resource-saving solutions. Moreover, entrepreneurial orientation positively strengthens the relationship between bricolage and sustainable entrepreneurship, thereby enhancing its overall effect. In contrast, entrepreneurial orientation was found to negatively moderate the relationship between frugal innovation and sustainable entrepreneurship, revealing an unexpected dynamic in which a pronounced strategic orientation may shift focus away from strictly frugal innovation practices. The proposed model demonstrates substantial explanatory strength, accounting for significant variance in both sustainable entrepreneurship and frugal innovation. This research offers notable theoretical contributions by integrating previously disconnected constructs into a unified analytical framework and by clarifying the mediating and moderating processes through which entrepreneurship under resource constraints leads to sustainability outcomes. From a practical perspective, the study provides actionable insights for SME managers on fostering bricolage capabilities, embedding frugal innovation, and strategically leveraging entrepreneurial orientation. Furthermore, it offers policymakers empirically grounded guidance for designing support initiatives that promote sustainability, efficiency, and resilience within the critically important SME sector.

Keywords: Frugal Innovation (FI), Entrepreneurial Orientation (EO), Sustainable Entrepreneurship, Entrepreneurial Bricolage