Linking Management Capabilities to Sustainable Business Performance of Women-Owned Small and Medium Enterprises in Emerging Market: A Moderation and Mediation Analysis

Abstract

The primary objective of this paper is to explore how management capabilities influence the sustainable business performance of women-owned SMEs in Bangladesh, encompassing the moderating role of technological capabilities and the mediating effect of conceptual competency. This research is necessary to address a gap in understanding how managerial capabilities can drive long-term growth for women-owned SMEs in emerging countries, thereby enhancing the broader discourse on women’s entrepreneurship and sustainable business practices. Data were collected from 216 women entrepreneurs across various SMEs in Bangladesh, and Smart PLS version 4 was employed for analysis. The measurement model was evaluated using factor loadings, Cronbach’s Alpha, Composite Reliability (CR), Average Variance Extracted (AVE), the Heterotrait–Monotrait (HTMT) ratio, and the Fornell–Larcker test. Structural model analysis was conducted, examining R², Q², f², beta coefficients, p-values, and t-statistics derived through bootstrapping. The results indicate that management capabilities play a pivotal role in enhancing conceptual competencies, which, in turn, significantly contribute to sustainable business performance. However, technological capabilities were not found to moderate the relationship between conceptual competency and sustainable business performance. Additionally, conceptual competency fully mediates the relationship between management capabilities and sustainable business performance. The findings underscore the importance of fostering skills and competencies among women entrepreneurs in emerging economy to drive long-term business success. The study’s limitations and recommendations for future research are also discussed.

1. Introduction

As female entrepreneurship becomes increasingly recognized for its role in fostering inclusive growth, alleviating poverty, creating jobs, promoting gender equality (SDG 5), and driving innovation (SDG 9), it has emerged as a key global driver of sustainable development [1]. Globally, women’s entrepreneurship has been linked to significant economic and social benefits, particularly in emerging economies. Studies have shown that when women engage in entrepreneurial activities, they contribute not only to the economic diversification of their countries but also to the empowerment of marginalized groups, challenging traditional gender roles and expanding access to opportunities for other women [2]. In both developed and developing nations, the impact of women entrepreneurs on job creation, poverty reduction, and sustainable development has been increasingly acknowledged. However, challenges persist, particularly in terms of access to resources, networks, and market opportunities, which can limit the long-term sustainability and growth of women-owned businesses [3].

In Bangladesh, a country with a growing and globalizing commercial environment, the advancement of sustainable development goals is highly dependent on the contributions of female entrepreneurs [4]. Despite their role, female entrepreneurs in Bangladesh continue to face numerous challenges that hinder their business effectiveness and long-term viability [5]. While studies have examined female entrepreneurship globally, there remains a gap in comprehensive research that focuses on the specific managerial capabilities required for Bangladeshi women entrepreneurs to thrive, particularly within the context of cross-border cooperation and globalization (SDG 17) [6]. Women entrepreneurs are now receiving more attention from policymakers in developing economies like Bangladesh, where 3.4 million SMEs are owned by women, accounting for approximately 28.6% of all SMEs [7]. The economic and social importance of SMEs—especially those led by women—has drawn attention from researchers, given their significance in both emerging and industrialized economies (SDG 8, SDG 10) [8,9,10]. Fostering female entrepreneurship in this globalized and interconnected era can lead to sustainable economic prosperity in developing countries. Furthermore, SMEs require knowledgeable, skilled, and globally minded personnel to navigate strategic decisions in increasingly competitive markets.

Women’s entrepreneurial sustainable performance can be strengthened by the management of different knowledge, skills and abilities [11]. Past research found a connection between conceptual competency and the success of female entrepreneurs in business [12,13,14]. Past research has also shown that entrepreneurs’ management capabilities [15,16,17], conceptual capabilities [18], and technological capabilities [19,20,21] play crucial roles in achieving sustainable business performance in female-owned enterprises. These competencies enable female entrepreneurs to take on their environment, improve organizational effectiveness, create, and maintain competitive advantage [22,23]. They may take advantage of new opportunities, learn about consumers and markets, establish a network, and obtain the resources they need to achieve high profitability owing to their managerial competencies [24,25]. Insufficient competencies impede the growth of ventures and lead to poor performance [26]. Therefore, owing to their conceptual abilities, female business owners can be quite analytical when crafting their company’s goals and vision [27,28,29]. By leveraging their available resources, women entrepreneurs with exceptional management capabilities can expand the progress of their businesses [30], while female business owners’ conceptual competency helps them consider the beliefs, working ideas, and attitudes that serve as the foundation of an organization’s objectives and vision [31,32].

This study aims to determine the influence of management capabilities on sustainable business performance, with a focus on examining the moderating role of technological capabilities and the mediating effect of conceptual competency. Based on the research progress on women entrepreneurs’ sustainable business performance, it is rational to assume the existence of moderating and mediating effects on the given associations. In today’s digital age, the ability to utilize technology not only supports operational efficiency but also enhances competitive advantage and market responsiveness. Research indicates that firms with strong technological capabilities are better positioned to implement strategic initiatives successfully, thereby amplifying the positive effects of conceptual competency on sustainable performance [33,34]. This moderation effect is particularly relevant in emerging markets like Bangladesh, where access to technology can significantly impact business outcomes and innovation. Furthermore, conceptual competency acts as a mediator that translates basic managerial qualities into long-term business outcomes, serving as a bridge between strategic planning and performance improvement [35].

The significance of this study lies in its focus on understanding the factors that influence the sustainable business performance of women-owned SMEs (WOSMEs) in Bangladesh. By exploring how management capabilities, technological capabilities, and conceptual competency interact, the study uncovers valuable insights into how female entrepreneurs can enhance their business effectiveness and long-term viability. Specifically, by examining the moderating role of technological capability, the study underlines the importance of adapting to evolving market conditions, while the investigation of the mediating role of conceptual competency sheds light on how effective management practices can turn into sustainable outcomes. The findings can inform policymakers, practitioners, and researchers nationally and globally about the essential capabilities that drive success for women-owned businesses. By developing these capabilities, female entrepreneurs can gain a competitive edge and operational resilience, which are critical in challenging markets [36]. Further, this research could focus on capacity-building initiatives that support women’s entrepreneurship across global contexts [37]. This approach aligns with the global trend of empowering women-led SMEs as catalysts for socio-economic development, particularly in emerging markets characterized by significant gender disparities.

This paper is structured into six main sections, with the introduction included. Section 2 presents the literature review and hypothesis development. Section 3 outlines the materials and methods used in the study. Section 4 showcases the results of the analysis, while Section 5 emphasizes the discussion, highlighting both theoretical and practical implications. Finally, Section 6 provides a summary of the findings and offers suggestions for future research.

2. Literature Review and Development of Hypothesis

2.1. Women-Owned SMEs

Women-owned small businesses are defined as those whose management and day-to-day operations are overseen by one or more women, with at least 51 percent of ownership held by women (or, in the case of a publicly traded company, at least 51 percent of its stock). Women-owned SMEs have made significant contributions to the economies in which they operate [38,39]. The majority of SME activity worldwide is run by women, who also play a crucial role in boosting the global economy by creating jobs, among other contributions [40,41]. Globally, the proportion of female entrepreneurs was over 43% in 2023 [42]. Women entrepreneurs have significantly contributed to developing nations like Bangladesh [43] and Taiwan [44,45]. In Bangladesh, SMEs have been expanding rapidly in recent years, particularly those run by women [46]. Bangladeshi women entrepreneurs are a group of women who have overcome social barriers to pursue education and establish new business goals [47]. Women’s entrepreneurship has steadily increased throughout the 20th and 21st centuries. Following the COVID-19 pandemic, Bangladesh has a large number of young women and productive workers, enabling their participation in the small and medium enterprise (SME) sector [48].

2.2. Sustainable Business Performance

When viewed through an economic lens, performance emphasizes the significance of external market factors in the competitive business environment as well as everything related to financial aspects [49]. Business performance is measured by how well specified goals and objectives, as outlined in business plans, are met or exceeded [50]. Profits and return on investment are the primary metrics used to gauge an organization’s viability [51]. According to Richard et al. [52], there are three distinct areas that comprise business performance: market performance, shareholder return, and financial performance. A company’s success is also impacted by intangible assets that influence the value-creation process, such as competitive advantages and learning [53]. Ultimately, the capability of a firm to produce cash (through sales) and reinvest (through profits) in ventures that continue to yield higher profits determines how well that company performs [54]. Both growth and financial performance are elements of sustainable business performance [55]. Sustainable performance is conceptually different from the meaning of traditional business performance. Sustainable performance means the alignment of monetary, social, and ecological objectives in the execution of core business operations with the goal of optimizing value [56]. It is a firm’s performance crosswise all metrics and for all corporate environmental sustainability factors. In a competitive environment, sustainable business performance is a key headache for women entrepreneurs [57]. Focusing on growth and financial performance encompasses the total actions and operations taken by female business owners to strengthen their companies, which can be evaluated using factors such as profitability, expansion, and the span of the period the company has been in survival [58].

2.3. Leveraging Management Capabilities for Sustainable Business Performance

The knowledge and skills necessary for successful performance in a management position are referred to as managerial competencies [59,60]. Management capabilities encompass the human attributes required to demonstrate the knowledge and expertise necessary for optimal performance in a specific role [61]. These capabilities are crucial for organizations, as they ensure that workers understand what is expected of them and possess the information and skills needed to interact effectively with customers and other members of the enterprise [62,63]. While poorly performing businesses often experience a decline in their management capabilities, successful businesses tend to grow and enhance these capabilities. In contrast to low-performing companies, which generally have weaker management capabilities, successful corporations are typically staffed with more experienced managers [64]. Effectively managed management capabilities can lead to the innovation necessary for exceptional sustainable business performance [65]. Moreover, effective management fosters innovation and strategic foresight, which are vital not just for short-term gains but also for long-term organizational resilience. Experienced managers are better equipped to navigate challenges related to environmental sustainability, social responsibility, and long-term economic viability, contributing to an organization’s ability to perform sustainably over time [66,67]. Women entrepreneurs, when supported with the necessary management capabilities, can lead SMEs toward sustainable business performance, aligning both economic success and social/environmental impact [68].

Therefore, the following hypothesis can be taken.

H1: 

There exists a positive connection between management capabilities and sustainable business performance of women-owned SMEs.

2.4. Relationship Between Management Capabilities and Conceptual Competency

Agbim et al. [69] identified the managerial abilities related to women-owned SMEs as the capacity to plan and budget, recognize changes, maintain positive customer relations, and ensure the accuracy of financial records. These four management qualities can be categorized into seven distinct managerial skills: goal-setting, resource allocation, conflict management, communication skills, performance measurement, initiative-taking, and self-control [70]. The managerial skill of networking enhances managers’ social and communication competencies, which are classified as conceptual competencies [71]. Communication skills, social interaction, and strategic thinking are essential conceptual abilities [72]. Management abilities that enable women SME owners to enhance their strategic thinking include capturing market share, developing marketing strategies, and identifying market trends [73,74]. Bhattacharya et al. [75] found that management abilities are linked to conceptual abilities. Research by Ramadan et al. [76] demonstrated that managerial competencies such as planning, budgeting, and resource allocation play a pivotal role in developing adaptive and strategic decision-making capabilities. These competencies are particularly significant for small and medium-sized enterprises (SMEs) operating in volatile environments. The capacity for adaptation is especially crucial for women entrepreneurs, who frequently encounter additional socio-economic barriers. Machio et al. [77] highlighted that networking and building social capital are crucial for women entrepreneurs to acquire resources and establish market connections, essential for conceptual competency.

Therefore, the following hypothesis can be adopted:

H2: 

Management capabilities of women owners assist in developing conceptual competence in women-owned small business settings.

2.5. Relationship Between Conceptual Competence and Sustainable Business Performance

Conceptual competency is one of the three essential skill sets identified by Katz [27] as crucial for organizational success. It refers to a manager’s ability to thoughtfully analyze the ideas and concepts that underpin the organization’s mission, vision, and objectives. By utilizing their conceptual capabilities, managers can engage with abstract concepts through hypothetical or “what if” scenarios. This proficiency enables them to impart meaning to and interpret abstract ideas for their colleagues, subordinates, and superiors [78]. For women owners of SMEs, the ability to think conceptually is particularly beneficial in navigating unpredictability [79]. Conceptual skills are especially important when making broad strategic decisions, and they are often considered vital for the success of small and medium-sized enterprises led by women. Research indicates that the success and sustained business performance of woman-owned SMEs heavily depend on the competencies of the entrepreneur, with conceptual competency being a key factor [80]. Through the application of their conceptual skills, female entrepreneurs can identify emerging trends and assess potential challenges, thereby enhancing their strategic decision-making and driving sustained business growth [81]. Therefore, it is reasonable to assert that this environment fosters a higher level of sustainable business performance for women entrepreneurs in the SME sector. Specifically, entrepreneurs with strong conceptual competencies, such as the ability to formulate strategic visions and anticipate market changes, are better positioned to implement sustainable practices that promote both economic and social success in their businesses [82]. Women entrepreneurs who possess high levels of conceptual competence are more skilled at identifying emerging opportunities and risks, enabling them to make informed decisions that contribute to long-term sustainability [83].

Based on this, the following hypothesis is proposed:

H3: 

There is a positive relationship between conceptual competence and the sustainable business performance of women-owned SMEs.

2.6. Technological Capability as the Moderating Variable

Technological capability encompasses the ability to develop new products and processes, enhance knowledge in innovative ways, and translate that knowledge into actionable plans for achieving desired outcomes [84,85,86]. More specifically, it comprises a range of data, including methods, techniques, experience, physical tools, equipment, and both theoretical and practical knowledge. Particularly in women-owned SMEs, technological capability is a potential source of enhanced company performance [87,88]. Women entrepreneurs should enhance their technological capabilities to better integrate their conceptual skills, thereby strengthening the overall performance of their businesses [89].

According to Man [90], the conceptual competencies required for female entrepreneurs include analytical thinking, problem-solving, decision-making, innovation, and pushing boundaries. Firms with strong technological capabilities are more inclined to innovate and perform effectively [91]. Businesses that excel in technology can achieve greater efficiency by leading in process innovations [92] and can enhance differentiation through the development of new products and services tailored to changing market conditions [93], ultimately contributing to positive sustainable business performance [94,95,96]. With the aid of their technology capabilities, female business owners can improve their problem-solving and decision-making abilities in their workplaces, which will, in turn, improve their sustainable business performance [97,98]. Therefore, in line with existing research, we propose the following hypothesis:

H4: 

Technological capability positively moderates the relationship between conceptual competence and sustainable business performance.

2.7. Conceptual Competence Mediates the Relationship Between Management Capability and Sustainable Business Performance

Management capabilities are the combination of knowledge, skills, behaviors, and attitudes that enhance the personal effectiveness of managers and small business owners in the context of SMEs [99]. Also, conceptual skills are especially valuable for making strategic decisions and are most relevant at higher levels of reasoning [100]. As a result, conceptual competence is often viewed as essential for the success of SMEs. Conceptually proficient women entrepreneurs are better equipped to develop communication and problem-solving abilities, both of which are key management capabilities in women-owned business environments. By enhancing their conceptual abilities, female entrepreneurs can better organize and plan their business activities, leading to improved sustainable business performance [101,102]. Based on this understanding, it is expected that the relationship between management capability and sustainable business performance is not direct, but rather mediated by the conceptual competence of SME owners. As a result, the hypothesis is as follows:

H5: 

Conceptual competence positively mediates the relationship between management capability and sustainable business performance.

Based on the literature reviews and hypotheses development, the conceptual framework depicted in Figure 1 highlights the relationships between management capabilities, conceptual competence, technological capabilities, and sustainable business performance. The arrows in the framework indicate the directional influences between the variables, showing how management capability, conceptual competence, and technological capability interact to drive sustainable business performance in women-owned SMEs.

The Dynamic Capabilities Theory is a suitable theory to support the conceptual framework for this study. The Dynamic Capabilities Theory (DCT) focuses on a firm’s ability to integrate, build, and reconfigure internal and external resources to adapt to changing environments and achieve sustained competitive advantage [103]. This theory emphasizes the role of key organizational capabilities—such as management capabilities and conceptual competence—in enabling firms to not only compete but also thrive in dynamic and competitive markets. The theory also underscores the importance of technological capabilities in facilitating innovation and business adaptation, particularly in industries that face rapid technological change.

According to DCT, firms with strong technological capabilities are better positioned to adapt to market changes and leverage their internal resources effectively [104]. In our framework, technological capability acts as a moderator between conceptual competence and sustainable business performance, meaning that firms with higher technological capabilities can better leverage their conceptual skills to enhance sustainable business performance. DCT also suggests that firms with strong managerial capabilities can integrate their conceptual competence, which enables female entrepreneurs to adapt and innovate in response to the strategic needs of the business, thereby leading to improved sustainable performance outcomes. In this framework, conceptual competence acts as a mediator between management capabilities and sustainable business performance, facilitating the translation of managerial skills into actionable strategies that drive long-term business success.

3. Materials and Methods

3.1. Procedure and Participants

In Bangladesh, there are 7.9 million SMEs, with 93.6% categorized as small and 6.4% as medium-sized. These businesses collectively employ around 24.5 million individuals, with 83.5% of the workforce being male and 16.5% being female [105]. SMEs are expanding by about 6% a year. Notwithstanding their importance, SMEs only make up 25% of the GDP in Bangladesh [106]. By 2024, the nation hopes to raise the GDP contribution of SMEs from 25% to 32% [107,108].

For this study, data were collected from SMEs operating in Bangladesh, specifically in the growing market of Chittagong. The research took place in Chittagong city of Bangladesh because of its economic contribution and strategic business position. It is the second largest city located in the southeast area of Bangladesh. The busiest seaport, the Chittagong seaport, and its friendly business environment have made it a significant economic hub for the SME sector in Bangladesh [109]. The Chattogram Women Chamber of Commerce & Industry (CWCCI), Micro Industries Development Assistance and Services (MIDAS), Bangladesh Rural Advancement Committee (BRAC), and commercial and specialized banks (such as National Bank and Grameen Bank) provided lists of registered women-owned SMEs, specifically those owned solely by women. Only registered and authorized SMEs were included in the study.

A convenient method of sampling was chosen. From these lists, we obtained profiles of 336 women entrepreneurs. Of these, 300 were selected for participation based on their relevance to women-owned SMEs. Participants were informed of various response options for the questionnaire, and convenience sampling was employed for participant selection. Between 5 January 2024 and 4 April 2024, structured questionnaires were used to collect data from these enterprises. The questionnaires were distributed through a combination of in-person delivery, Google Forms, and email. After accounting for missing data, 42 questionnaires were excluded from the analysis, leaving a final sample of 258 responses. For a comprehensive analysis, 216 valid questionnaires were ultimately considered.

3.2. Variables and Instruments

Data for this study were collected using scales from previous research, measured on a five-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). The psychometric properties of each item were carefully evaluated to ensure the validity and reliability of the scales used, addressing any measurement concerns. In this study, sustainable business performance is the dependent variable. To measure it, five items from the scale developed by Nawanir [110] were used. These items were designed to assess the performance of women entrepreneurs in Bangladesh and other emerging economies. This scale allowed us to capture various dimensions of the entrepreneurs’ business outcomes toward sustainability.

Management capabilities (MCs) and conceptual competence (CC) are the independent variables in this study. To assess the entrepreneurial capabilities of women entrepreneurs, specifically MC, we employed the scale consisting of six items developed by Desarbo et al. [111]. They created this scale using the competitive capability theory given by Conant et al. [112]. Conceptual competence (CC), which refers to an entrepreneur’s ability to oversee and manage all aspects of business operations [113], was measured using five items from the scale created by Chandler and Jansen [114]. The moderating variable, technological capabilities, is measured using six items derived also from Desarbo et al. [111] (see Appendix A).

3.3. Data Analysis Tools and Techniques

Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed for data analysis in this study, consisting of two main steps: measurement model evaluation and structural model assessment.

To evaluate the measurement model, several reliability and validity tests were conducted. Factor loadings were assessed for convergent validity, ensuring higher loadings reflect stronger latent construct representation. Cronbach’s Alpha and Composite Reliability (CR) assessed internal consistency and overall reliability. Average Variance Extracted (AVE) measured the variance captured by constructs relative to measurement error. Discriminant validity was assessed using the Heterotrait–Monotrait Ratio (HTMT) and Fornell–Larcker criterion to confim distinct constructs.

For hypothesis testing, the structural model was analyzed using t-statistics, beta coefficients (β), and p-values to evaluate the significance and strength of relationships. The model’s predictive accuracy was assessed with R², Q², and f². Bootstrapping with 1000 subsamples was employed for robust estimates and model stability [115]. Smart PLS 4.0 was used for both measurement and structural model evaluation, ensuring the reliability, validity, and robustness of the study’s results.

Partial Least Squares Structural Equation Modeling (PLS-SEM) is a robust technique used to analyze complex relationships between latent variables. It focuses on predictive accuracy and is ideal for empirical research. Its flexibility in modeling non-linear relationships and its use of user-friendly software like SmartPLS make it highly applicable in various fields, including social sciences [116].

3.4. Common Method Variance

The common method variance (CMV) analysis revealed that a single factor accounted for 40.97% of the total variance using SPSS v. 26 software. This percentage does not exceed the commonly suggested threshold of 50% [117]. Since this value is below the threshold, we conclude that there are no significant issues with the data related to common method variance. This finding is particularly relevant when using self-reported measures, which can be susceptible to biases such as social desirability and consistency bias [118].

4. Results

4.1. Demographic Profile

As shown in

Table 1. Demographic profile of the respondents and background information of SMEs.

Categories	Subcategories	Frequency	Valid	Percentage	Cumulative Percentage
Marial Status	Single	85	216	39.4	39.4
	Married	120		55.6	94.9
	Divorced	6		2.8	97.7
	Widow	5		2.3	100.0
Age	>20	3	216	1.4	1.4
	21–30	112		51.9	53.2
	31–40	76		35.2	88.4
	41–50	23		10.6	99.1
	50+	2		0.9	100.0
Number of Employees	>25	129	216	59.7	59.7
	25–50	79		36.6	96.3
	50–150	8		3.7	100.0
Duration	1–5	162	216	75.0	75.0
	6–10	45		20.8	95.8
	11–15	6		2.8	98.6
	15+	3		1.4	100.0
Type of Business	Coffee and Restaurant	20	216	0.5	0.5
	Fast food	14		9.3	9.8
	Confectionary	9		6.5	16.3
	Small food factory	12		4.1	20.4
	Catering	24		5.6	26
	Bakery	19		11.0	37.0
	Others	117		63.0	100.0

, a majority of the respondents (55.6%) were married women, while 39.4% were single, 2.8% were divorced, and 2.3% were widowed. In terms of age, 51.9% of the respondents fell within the 21–30 age group, followed by 35.2% in the 31–40 age group. The remaining respondents included 10.6% in the 41–50 age group, 1.4% under 20, and 9% who were 50 years or older.

Regarding the SMEs, approximately 59.7% had fewer than 25 employees, while 36.6% employed between 25 and 50 staff members. Only 3.7% of the SMEs had 50 to 150 employees. In terms of operational duration, 75% of the SMEs had been in business for 1 to 5 years, while 20.8% had been operating for 6 to 10 years. Additionally, 2.8% of the SMEs had been in operation for 11 to 15 years, and only 3% had been running for more than 15 years.

Among the respondents, 20 individuals (9.3%) operate coffee and restaurant businesses, while 14 (6.5%) are involved in fast food, and 9 (4.1%) run confectionery shops. Additionally, 12 respondents (5.6%) manage small food factories, and 24 (11.0%) provide catering services. The bakery sector accounts for 19 respondents (8.8%). A substantial majority, 117 respondents (63.0%), fall into the “Others” category, indicating a variety of business types not explicitly listed. These data highlight that while specific business types like catering and bakery are prominent, the diversity within the “Others” category suggests a rich landscape of entrepreneurial ventures among women-owned SMEs.

4.2. Measurement Model (Reliability and Validity)

To verify content validity, convergent validity, and discriminant validity, a measurement model assessment was conducted. This assessment tested whether the items accurately measured their respective variables, beginning with factor loadings, which are fundamental for determining validity. According to Hair et al. [119], items with loadings greater than 0.50 are retained, and all survey items in this study met this criterion.

Key statistics for ensuring convergent reliability include Cronbach’s Alpha (CA), Composite Reliability (CR), and Average Variance Extracted (AVE). To assess the validity of the research questionnaire, the Cronbach’s Alpha Coefficient was calculated. This widely used coefficient evaluates the reliability of the scale and the internal consistency of the instrument items [120]. The Cronbach’s Alpha (CA) values for the constructs range from 0.765 to 0.882, which are greater than 0.7, indicating a strong level of internal consistency.

The Composite Reliability (CR) scores range from 0.784 to 0.889, all of which exceed the recommended threshold of 0.70, while AVE values fall between 0.509 and 0.680, were all above the recommended level of 0.50, demonstrating that the constructs capture sufficient variance [119].

Table 2. Measurement model results.

Constructs	Items	Loadings	CA	CR	AVE
Sustainable Business Performance	SBP1	0.755	0.765	0.784	0.509
	SBP2	0.687
	SBP3	0.798
	SBP4	0.697
	SBP5	0.616
Conceptual Competency	CC1	0.854	0.882	0.889	0.680
	CC2	0.825
	CC3	0.773
	CC4	0.866
	CC5	0.803
Management Capabilities	MgtC1	0.735	0.856	0.862	0.582
	MgtC2	0.777
	MgtC3	0.738
	MgtC4	0.806
	MgtC5	0.806
	MgtC6	0.712
Technological Capabilities	TC1	0.767	0.853	0.861	0.575
	TC2	0.787
	TC3	0.758
	TC4	0.739
	TC5	0.756
	TC6	0.741

presents the statistics related to convergent validity. These results overall confirm that the measurement model exhibits good convergent validity.

The Heterotrait–Monotrait Ratio (HTMT) is considered a reliable measure for assessing discriminant validity. In this research, the HTMT ratio was utilized to evaluate discriminant validity, with all values falling below the established cutoff point of 0.90 [121]. This indicates that the constructs are adequately distinct from one another.

Table 3. HTMT ratio.

	SBP	CC	MgtC	TC
SBP
CC	0.643
MgtC	0.583	0.808
TC	0.476	0.639	0.875

displays the HTMT values, further confirming that the measurement model maintains good discriminant validity.

One of the most commonly used methods to evaluate the discriminant validity of the measurement model is the Fornell–Larcker criterion, established by Fornell and Larcker in 1981 [122]. This criterion posits that a construct must have a square root of the Average Variance Extracted (AVE) that exceeds the correlations between that construct and all other constructs. When this condition is met, it indicates sufficient discriminant validity.

As shown in

Table 4. Fornell–Larcker criterion.

	SBP	CC	MgtC	TC
SBP	0.713
CC	0.566	0.825
MgtC	0.494	0.707	0.763
TC	0.413	0.569	0.750	0.758

, the square roots of the AVEs (diagonal values) are greater than the correlation coefficients between the constructs (off-diagonal values), demonstrating that discriminant validity is adequate. Additionally, when comparing the bolded diagonal loadings with the off-diagonal loadings, all off-diagonal loadings were found to be less than the corresponding bolded diagonal values. Furthermore, the off-diagonal loadings were consistently lower than the bolded diagonal values, reinforcing the finding that the measurement model effectively upholds discriminant validity.

4.3. Structural Model and Moderation Analysis

As shown in

Table 5. R-square and Q-square.

	R-Square	R-Square Adjusted	Q-Sqaure
SBP	0.352	0.352	0.232
CC	0.506	0.504	0.497

, the R-square value for SBP is 0.352, indicating that 35.2% of the variance in SBP is explained by management capabilities. The R-square value for CC is 0.506, indicating that 50.6% of the variance in CC is explained by management capabilities and sustainable business performance. The adjusted R-square values are also 0.352 for SBP and 0.504 for CC, indicating that the explanatory power for both SBP and CC remains largely unaffected even after adjusting for the number of predictors. The Q-square values are 0.232 for SBP and 0.497 for CC, suggesting predictive relevance for both variables. Together, the R-square and Q-square values demonstrate that the model has moderate to strong explanatory and predictive power for both SBP and CC, providing support for the hypothesized relationships in the research framework [123].

The f-square values indicate the strength of the relationships between constructs in the model. Management capabilities (MgtCs) have a large effect on conceptual capabilities (CCs) (f-square = 1.025), suggesting a strong influence. The relationship between CC and sustainable business performance (SBP) is small (f-square = 0.074), while MgtC has a very small effect on SBP (f-square = 0.022). Technological capabilities (TCs) have an extremely small effect on SBP (f-square = 0.002), indicating that technological factors have minimal impact on sustainable business performance [124] (see

Table 6. F-square.

	CC	MgtC	SBP	TC
CC			0.074
MgtC	1.025		0.022
SBP
TC			0.002

).

The measurement model results are presented in Figure 2 by all arrows apart from those included in the dashed box.

Table 7. Hypothesis testing and moderation result.

	Relationships	Beta	SD	t-Value	p-Value	Decision
H1	MgtC → SBP	0.382	0.090	4.253	0.000	Supported
H2	MgtC → CC	0.713	0.039	18.280	0.000	Supported
H3	CC → SBP	0.344	0.082	4.194	0.000	Supported
H4	TC × CC → SBP	−0.103	0.046	2.256	0.024	Not Supported

Note. MgtC: management capabilities, CC: conceptual competency, TC: technological capabilities, SBP: sustainable business performance.

presents the results of the hypotheses testing, revealing significant insights into the relationships among the studied variables. Hypothesis 1 (H1) explores the connection between management capabilities (MgtCs) and sustainable business performance (SBP), yielding a beta value of 0.382, a t-value of 4.253, and a p-value of 0.000. This indicates a statistically significant positive relationship, suggesting that improvements in management capabilities lead to enhanced sustainable business performance. Hypothesis 2 (H2) further supports this notion by demonstrating a strong positive relationship between MgtC and conceptual competency (CC), with a beta of 0.713, an exceptionally high t-value of 18.280, and a p-value of 0.000. This finding indicates that stronger management capabilities significantly enhance conceptual competency.

Hypothesis 3 (H3) confirms that CC positively impacts SBP, with a beta of 0.344, a t-value of 4.194, and a p-value of 0.000, indicating that increased conceptual competency contributes to better sustainable business performance. Finally, Hypothesis 4 (H4) examines the moderating effect of technological capabilities (TCs) on the relationship between CC and SBP, revealing a beta of −0.103, a t-value of 2.256, and a p-value of 0.024. The negative beta value (−0.103) indicates that as technological capabilities increase, the positive influence of conceptual competency on sustainable business performance becomes weaker. Overall, the findings in Table 7 highlight the crucial roles of management capabilities and conceptual competency in driving sustainable business performance, along with no significant moderating effect of technological capabilities.

4.4. Mediation Analysis

Mediation analysis was conducted to assess the mediating role of conceptual competency (CC) in the relationship between management capabilities (MgtCs) and sustainable business performance (SBP). The results presented in

Table 8. Mediation analysis.

Total Effects (MgtC → SBP)			Direct Effect (MgtC → SBP)			Indirect Effects of MgtC on SBP
Beta	t Value	p Value	Beta	t Value	p Value	Hypothesis	Beta	SE	t Value	p Value
0.382	4.253	0.000	0.137	1.494	0.135	MgtC → CC → SBP	0.245	0.061	3.997	0.000

Note. SE: standard error, MgtC: management capabilities, CC: conceptual competency, SBP: sustainable business performance.

indicate a significant total effect of MgtC on SBP (H1: beta = 0.382, t = 4.253, p < 0.001). However, when the mediation variable (CC) was included in the analysis, the direct effect of MgtC on SBP became insignificant (beta = 0.137, t = 1.494, p = 0.135). In contrast, the indirect effect of MgtC on SBP through CC was found to be significant (beta = 0.245, t = 3.997, p < 0.001). These findings suggest that the relationship between management capabilities (MgtCs) and sustainable business performance (SBP) is fully mediated by conceptual competency (CC). Consequently, Hypothesis 5 is supported.

5. Discussion

This study aimed to explore the effects of—management capabilities, conceptual competency, and technological capabilities—on sustainable business performance (SBP). The focus was on understanding how these factors influence the sustainable performance of women-owned small and medium-sized enterprises (SMEs) in Bangladesh. Specifically, it sought to understand how managerial capabilities impact the sustainable performance of women-owned SMEs in Bangladesh. Additionally, the study showed the moderating effect of technological capabilities on the relationship between conceptual competency and sustainable business performance which is negative. In other words, when businesses in Bangladesh adopt more advanced technologies, the strategic thinking and long-term planning associated with conceptual competency may become less important, as technology-driven efficiency and automation take precedence. This finding highlights the complex relationship between technology and strategic decision-making in SMEs. Moreover, the study examined the mediating role of conceptual competency in the relationship between management capabilities and sustainable business performance. It was found that conceptual competency plays an important role in mediating the influence of management capabilities on sustainable business performance. This suggests that management capabilities alone may not directly transform into sustainable business outcomes unless combined with strong conceptual thinking. Conceptual competency helps convert managerial skills into more effective strategic decision-making, leading to better performance in the long run.

In the entrepreneurship literature, it is widely accepted that small businesses are extensions of their founders [125,126], and the founder’s human capital is often essential to the firm’s success [127]. The results of this study (H1, H2, and H3) align with this concept, as they show that the management capabilities and conceptual competency of women entrepreneurs significantly influence sustainable business performance. In the case of H4, we did not find an exact moderation effect of technological capabilities on the relationship between conceptual competency and sustainable business performance in previous literature, there is ample evidence of the moderating effect of technological capabilities on other constructs, such as competitive advantage, strategic capacity, firm performance, and innovation capacity [128,129]. Lastly, the findings of H5 reveal a full mediation effect of conceptual competency on the relationship between management capabilities and sustainable business performance. Since the exploration of this relationship is novel, the study makes a unique contribution to the existing literature on women entrepreneurship in Bangladesh.

5.1. Theoretical Implications

By integrating DCT, the study expands the theory’s application to the context of female entrepreneurs and highlights how key organizational capabilities—namely, management capabilities and conceptual competency—interact to influence sustainable business performance in dynamic market conditions [130]. This underlines the importance of dynamic capabilities tailored for sustainability, emphasizing that different forms of these capabilities are essential for achieving sustainability outcomes in corporate strategies [131,132].

Next, the study illustrates the moderating role of technological capabilities in the relationship between conceptual competency and sustainable business performance. Specifically, it identifies a negative moderating effect: as firms adopt more advanced technologies, the importance of strategic thinking and long-term planning—associated with conceptual competency—diminishes [133]. This finding contributes to DCT by suggesting that the increasing reliance on technological innovation and efficiency may reduce the relevance of conceptual thinking in certain contexts, especially in industries driven by rapid technological changes [134]. This insight helps refine the understanding of how technological capabilities shape firms’ strategic approaches and highlights the complexity of the relationship between technology and business strategy in SMEs.

Additionally, the study further extends the theory by illustrating that conceptual competency is a vital link between managerial capabilities and long-term business success, especially in growing markets [135,136]. It shows that without strong conceptual competency, even the most skilled managers may struggle to achieve sustainable business performance. By combining DCT with the unique socio-economic dynamics of women entrepreneurs, this study provides a more comprehensive framework for understanding the role of dynamic capabilities in fostering long-term business success in emerging markets [137].

5.2. Practical Implications

The findings of this study offer valuable practical implications for women entrepreneurs in Bangladesh and other emerging markets, providing actionable strategies to enhance sustainable business performance (SBP) through improved management capabilities, conceptual competency, and the careful integration of technological capabilities.

A key finding of this study is the positive relationship between management capabilities and SBP, highlighting the importance of strengthening leadership and decision-making skills. Women entrepreneurs, particularly in SMEs, often face challenges such as limited access to capital, markets, and networks. To address this, entrepreneurs should invest in leadership development through training programs to enhance their management and decision-making abilities. Effective resource management, including optimizing financial, human, and physical resources, is also essential for long-term business success. By improving operational efficiency through targeted training in operational management, businesses can reduce costs, streamline production, and improve profitability, all of which contribute to sustainable growth.

The study also emphasizes the importance of conceptual competency, which includes strategic thinking, innovation, and long-term planning. Women entrepreneurs should develop these abilities by engaging in workshops to enhance their ability to anticipate market trends, identify new opportunities, and plan for business growth. Conceptual competency also involves leveraging data and information for decision-making, enabling female entrepreneurs to align their actions with long-term objectives rather than short-term results. By cultivating a mindset of innovation, women entrepreneurs can differentiate their businesses, explore new models, or introduce new products and services to ensure sustained success in a competitive market.

Another important finding is the negative moderating effect of technological capabilities on the relationship between conceptual competency and SBP. While technology can improve efficiency, it can also diminish the role of strategic thinking if overemphasized. Entrepreneurs should integrate technology in ways that complement strategic planning, not replace it. Training in tools such as data analytics, digital marketing, enterprise resource planning (ERP), and customer relationship management (CRM) software can support operational efficiency and customer engagement. However, it is crucial that technological investments are balanced with concentrating on long-term goals and strategic direction to avoid undermining business sustainability.

Finally, the study highlights the mediating role of conceptual competency between managerial capabilities and sustainable business performance. This accentuates the need for women entrepreneurs to shift from an operational focus to a more strategic approach. In many SMEs, day-to-day operational tasks such as managing finances, production, and human resources are often prioritized, but these alone cannot ensure long-term success. Conceptual competency enables entrepreneurs to think beyond immediate challenges, anticipate future trends, and plan for sustainable growth. It empowers them to align their daily decisions with broader, long-term goals, driving innovation, resource optimization, and adaptability. By focusing on both operational efficiency and strategic thinking, women entrepreneurs can position their businesses to succeed in a changing environment.

6. Conclusions

Women entrepreneurs in developing countries like Bangladesh play a dominant role in driving economic growth, social stability, and women’s empowerment. Recognizing this, stakeholders have increasingly concentrated on their contributions. This study focuses on how women entrepreneurs can enhance their sustainable business performance by utilizing management capabilities and conceptual competencies. Technological skills were not found to have a moderating impact on sustainable business performance in this context. However, the findings come with limitations. The dataset used in this study is drawn from a diverse range of women-owned SMEs in Bangladesh, making it essential for readers to interpret the results within this specific context. Consequently, the conclusions should not be generalized to all businesses, particularly those in developed nations or of different sizes. Future research should explore the findings in other settings, such as developed countries, or over different time periods, to provide a more comprehensive understanding of the factors driving business success in the long run among women entrepreneurs. Comparative studies between SMEs in developed and developing nations could offer broader insights into how entrepreneurial competencies influence success. Additionally, further research could investigate potential moderating or mediating factors between managerial capabilities and sustainable business performance. To minimize the risk of bias from a cross-sectional approach, future studies could also incorporate longitudinal data for more robust conclusions.