Linking Corporate Ethics to Eco‐Innovation in SMES: The Mediating Role of Strategic Alliances and the Value Proposition

ABSTRACT The ongoing deterioration of environmental quality and depletion of natural resources call for urgent corporate action towards sustainability. This study examines how corporate ethics influence eco‐innovation outcomes among small‐ and medium‐sized enterprises (SMEs) in the Spanish electronic components industry, considering the mediating roles of business model innovation and strategic relationships with key stakeholders. Using empirical data from 110 SMEs and analysed through partial least squares structural equation modelling, results show that corporate ethics exert a positive and significant effect on eco‐innovation outcomes, both directly and indirectly through the proposed mediators. These findings highlight that ethical behaviour is not merely a matter of compliance or reputation but a strategic driver of sustainable innovation and firm resilience. The study contributes to the literature by clarifying the mechanisms linking corporate ethics and eco‐innovation within the SME context.