Capabilities and Opportunities: Linking Knowledge Management Practices of Textile-Based SMEs on Sustainable Entrepreneurship and Organizational Performance in China

Abstract

Most researchers hold the role of dynamic capability (DC) as a key factor of achieving sustainable entrepreneurship performance (SEP) and Organizational Performance (OP) with the competitive advantage of knowledge management practices (KMPs). However, the effects of KMPs with SEP and OP are still under discussion. Moreover, the ambidexterity view, exploring the direct impact of KMPs mediated by dynamic capabilities (DC), gives evidence of sustainable entrepreneurship and organizational performance. Measuring the gathered data of 480 textile-based SME entrepreneurs and organizations through structural equation modeling, the study’s finding shows that KMPs positively and significantly influence sustainable entrepreneurship and organizational performance. Furthermore, this study explores the partial mediation of dynamic capabilities among KMPs with SEP and organization performance. At the same time, opportunity recognition is a moderator that strengthens the relationship between DCs with sustainable entrepreneurship and organizational performance. The study is limited to male textile-based SMEs and can be enhanced by female entrepreneurs. Furthermore, this research contributes to entrepreneurship students by encouraging better research work in current and existing studies, and practically assists government and private policymakers and business practitioners to formulate better strategies for the sustainability and economic growth of a country.

1. Introduction

Globally, the worth for sustainable entrepreneurship has been increased due to its potential role in problem-solving and gaining competitive advantages. Due to the rapid change and development in the nature of business, a piece of knowledge is considered an important factor of success. In prior research, knowledge-sharing behavior and sustainable entrepreneurship investigate and resolve technical issues with sustainable practices [1,2]. According to Zaim [3], knowledge is considered a tool for sustainable entrepreneurship and organizational performance. According to the author [1] outlined that sustainable entrepreneurship performance and competitive advantages are based on KMPs, such as knowledge-sharing behavior and innovative capacity, which build a positive relationship between entrepreneurial capabilities and sustainable entrepreneurship performance [4]. Sharing of knowledge is an important factor for achieving competitive advantages and organizational goals [5].

Small–medium enterprises (SMEs) can play a significant role in developing a country; mainly, they are considered a backbone in the economic development of developing countries [6]. Therefore, several entrepreneurial capabilities are essential to enhancing sustainable entrepreneurial performance (SEP) and achieving organizational development goals. SEP depends on more than just the willingness and commitment to becoming an entrepreneur [7]. Knowledge and capabilities are essential to becoming sustainable entrepreneurs [8].

KMPs assist small–medium entrepreneurs (SMEs) in sustainable entrepreneurship and organizational performance [9]. Researchers [10] explained KMPs as an explicit and important element in identifying and exploiting resources. Previous research focused on leadership practices with KMPs of sustainable entrepreneurship [11]. Valuable knowledge resources build an effective relationship among the creation and sharing of knowledge, innovativeness, and absorption of knowledge [12] with sustainable entrepreneurship and organizational performance [13]. The merger of these resources determines the KMPs, which are directly associated with organizational performance [14]. Organizational resources support in accomplishing market challenges and also enhance sustainable entrepreneurship and organizational performance [15]. Knowledge management practices help SME entrepreneurs to sustain and grow in the long run [9]. KMPs are directly associated with sustainable entrepreneurship performance; both SEP and knowledge management play a positive role in ensuring business growth [16].

The sharing of knowledge in an organization depends on the organizational atmosphere and the entrepreneurs’ behavior, which is beneficial for sustainable performance. When KSB is restricted, the gaps ascend, creating performance hurdles [17]. The information about organizational schedules, depositories, repositories, and across organizational boundaries is gathered eventually with KSB are utilized for performance. The exchange of skills and experience within an organization is due to KSB, which increases firm performance [18]. Numerous studies suggest that SEP always supports the performance and market value of an organization [19]. However, several fundamentals, such as knowledge-sharing behavior (KSB) and innovative capacity (IC), are directly related to the success of an entrepreneur [20].

The knowledge-based theory (KBT) creates and manages exclusive dynamic capabilities, which helps in sustainable entrepreneurship and organizational performance [4]. Prior research has examined the positive relations of KMPs with organizational [21] and sustainable entrepreneurship performance [22]. Therefore, organizations and entrepreneurs with effective KMPs achieve competitive advantages for organizational and sustainable entrepreneurship performance. The nature of sharing, acquiring, and applying knowledge enhances innovative capacity with performance. Modern research has outlined the interest of researchers in the KMPs of entrepreneurs and organizations in business studies, which assist in enhancing entrepreneurship and organizational performance [23].

Entrepreneurship performance is directly associated with knowledge management practices that enhance business and economic growth [22]. Prior studies suggested that knowledge management practices and entrepreneurship have a significant and positive relationship [24]. Knowledge management practices support the firm in creating, transferring, and applying information [4]. Sharing knowledge enhances the firm’s strategic management and assists in developing the entrepreneurship process. The proper use of these resources gives competitive advantages to organizational and sustainable entrepreneurial performance. KMPs are not easy to change and are socially bonded but could assist in sustainable business growth. The value of knowledge has been exploited in organizations by focusing the business strategies and organizational performance.

In this regard, KMP can play a vital role due to its facilitating the sharing of information and dynamic capabilities from various time zones and geographical regions [25]. There is a growing need for approaches to improve KMP processes and procedures through the assessment of environmental, social, and economic consequences, given the increased need for sustainable entrepreneurial performance [26]. This study focuses on knowledge management practices contributing to many sustainability areas described in the literature. Knowledge-sharing behavior increases the tendency and understanding of the economic challenges in organizational culture, which entrepreneurs face during performance [27]. If there is no culture of sharing knowledge in the organization, with time, the gained information becomes old or useless once it Is developed, with no information shared, causing a decline in organizational performance [28]. The shared information in the firm’s internal and external sources becomes informational, which benefits sustainable entrepreneurship performance. Knowledge-sharing behavior assists the entrepreneur in problem-solving, adopting and adapting new technology in organizational culture, invention, and creating core competencies for the entrepreneurship performance [29].

Previous research has stated that innovative capacity and innovation are also related to SEP [30]. The outcome of internal capacities with abilities that bring something different is known as IC which is directly correlated to the nature of SEP. The IC of an individual assists in entrepreneurship and organizational performance. Furthermore, the competitive advantages, overcome market strategies, and absorptive and innovative capacities enhance sustainable entrepreneurship performance [31]. IC categorizes abilities, assimilation, and knowledge utilization for SME performance. Entrepreneurs with IC can absorb and innovate the knowledge from competitors and apply it in the organization to enhance performance [31]. Researchers indicate that IC combines necessary abilities, understanding, and absorption of knowledge to integrate innovative knowledge for SEP [32], and practices managing the knowledge that can be used to achieve organizational goals. Therefore, it is important to measure the impact of such knowledge management practices on the SEP and OP of SMEs.

Dynamic capabilities with knowledge-sharing behavior in an organization can lead to rapid change with innovative capacity in SME performance [33]. The author [34] outlined an innovative capacity that helps with consistent improvement and upgrading of the capabilities of an entrepreneur. The capacity of capabilities assists in discovering, creating, and exploiting opportunities for entrepreneurship performance [35]. However, several studies have determined that the dynamic capabilities of an entrepreneur have a vital role in increasing performance, which can be further availed by using organizational resources to create, design, and modify an organization according to market challenges for organizational performance [36]. The innovative capacity increases the organizational capability to identify, learn, and observe external knowledge for innovation and performances [37]. Previous research [25] argued that dynamic capabilities help with managing innovative resources in an organization, and the performance of the entrepreneur is linked with dynamic capabilities.

Prior research [38] proved the direct and indirect impact of dynamic capabilities on firm performance. Several researchers found a positive relation between dynamic capability and organizational performance [39]. Numerous studies have explored the dynamic capability as a predictor variable to measure business and organizational performance; on the other hand, the relationship and impact of KMPs with sustainable entrepreneurship and organizational performance are still under-explored. Therefore, it is necessary to identify the direct effect of KMPs with DCs and the indirect effect of dynamic capability on sustainable entrepreneurship and organizational performance.

Furthermore, the concept of entrepreneurial opportunity recognition is to observe the market position, demand, and market value of a new product that affects SEP positively [26]. Previous research [40] claimed that “an opportunity may be the chance to meet a market need through a creative combination of resources to deliver superior value” [41]. Previous studies defined the concept of opportunity as identifying and availing the market opportunity through available resources that could improve the performance [42]. Researchers concluded that sources of discovering, evaluating, and exploiting information are opportunities [43] that enhance the entrepreneur’s and firm’s performance by the increase in capabilities [44]. Hence, several types of research have been conducted to explore entrepreneurship through KMPs with dynamic capabilities to get appropriate outcomes. Therefore, the DCs of SMEs in terms of KMPs play an important role in sustainable entrepreneurship and firm performance.

Sustainable entrepreneurship gives birth to startups, creativity, and market value [45]. This study aims to build a business venue using KSB and IC to develop sustainable entrepreneurship [46]. This research is based on knowledge-sharing behaviors (KSB) and innovative capability (IC) to enhance sustainable entrepreneurial performance [47]. Previous studies involved intentional models to understand sustainable entrepreneurship performance [48]. The core concept of developing this model is to build a relationship with KMPs in terms of textile-based SMEs. Achieving holistic business performance is associated with considering all aspects of sustainable development, particularly in the textile sector [49]. The primary objective of this study is to explore the relationship and impact of knowledge management practices on sustainability entrepreneurship performance through dynamic entrepreneurial capabilities.

The construct’s knowledge-sharing behavior and innovative capacity positively impact SME performance (sustainable entrepreneurship and organizational) of China. The dynamic capabilities play a decisive role between constructs as mediators and opportunity recognition as a moderator between organizational performance and sustainable entrepreneurship performance. The researcher has an existing scale for this study because the validated scale is more convenient and reliable at verifying the constructs for the study, instead of developing new ones and consuming time. In the past, most studies were based on self-reported questionnaires and the standard method was used to collect data for research [6]. The researcher has a formative model for this study, applying SPSS and Smart-PLS to analyze the respondent’s data [8]. To be specific, the study findings explore knowledge management practices, which influence sustainable entrepreneurship and organizational performance. Furthermore, this research explores the mediating and moderating role of dynamic capability and opportunity recognition via different analyses and develops hypotheses.

The study gap consists of different perspectives. The current study covers the existing gap in the scientific literature towards knowledge management practices (knowledge-sharing behavior and innovative capacity) with organizational and sustainable entrepreneurship performance because no empirical study is available on this relationship in the China region. Secondly, the study also focuses on the dynamic capabilities (mediator) of entrepreneurs and organizations, and the textile-based SME sector is significantly increasing. Previous studies focused on and examined the influence of knowledge management practices on business performance [39, 42], with innovation in the relationship as a mediator with organizational orientation and learning [50, 51]. The concept of dynamic capabilities as a mediator among knowledge management practices with SME sustainable entrepreneurship and organizational performance is the motivation for this study.

On the other hand, the direct impact of dynamic capability on sustainable entrepreneurship and organizational performance is discussed in the literature [52]. Lastly, previous research neglected the relationship between dynamic capabilities and opportunity recognition with sustainable entrepreneurship and organizational performance [15]. Opportunity recognition recognizes an opportunity/idea, and capabilities assist in availing the market opportunities for better performance for businesses, entrepreneurs, and organizations. Therefore, the conducted study examines the concept of opportunity recognition as a moderator in the relationship between dynamic capabilities, sustainable entrepreneurship, and organizational performance.

2. Theoretical Justifications and Hypothesis Development

The research model is based on fundamental theories and existing studies, including the antecedents to Schumpeter’s entrepreneurship theory [8]. Sustainable entrepreneurship performance is supported by the entrepreneurship theory (ET) for organizational resources, capabilities, and capacities. Meanwhile, the “resource-based theory” also accentuates the role of innovative capacity, which is directly associated with enhancing organizational performance [53]. It is applied to acquire and examine the organizational capacities, capabilities, and management strategies to achieve competitive advantages [54] and internal and external assets with available resources for sustainable performance [55]. Opportunity recognition gives entrepreneurs a chance to generate ideas and develop products [56] for better SEP. As the knowledge-based theory (KBT) is applied, the organizational and entrepreneurial skills are enhanced, which leads to better entrepreneurship performance [57]. In addition, entrepreneurs and firms with more knowledge management practices efficiently achieve and maintain business sustainability [34]. Many researchers have demonstrated that sharing, absorbing, and applying knowledge tends to improve capacities, capabilities, and sustainable entrepreneurship performance [1]. Therefore, to develop the holistic research model, the abovementioned theories were included to meet the research objectives.

Latest research [58] argued that innovative capacity relies on organizational capital and human resources, including the organizational infrastructure of work environments. Here, the innovative organizational infrastructure also means the elements that increase the innovative capacity in entrepreneurship performance [59]. The innovation organizational commercialization process positively affects a firm’s performance [60]. If the overall population is recommended to become entrepreneurs at a mature age, it raises concerns affecting business creation and innovative capacity. The word “self-employment” is used as a synonym for entrepreneurship, and if the self-employed age become high, the rate of self-employment also becomes high. Still, the innovative capacity of entrepreneurs will fall.

Researcher [22] argued that DCs are the combinations of activities and designed structure that help in learning and enhancing the daily routine performance of entrepreneurs [61]. Entrepreneurial and organizational capabilities assist in managing available resources in performance. Therefore, firms need to focus on individuals’ dynamic interpersonal capabilities [20]. Entrepreneurs consider dynamic capability a major asset for organizations [62]. Entrepreneurship performance can be measured through the rate of accepting and implementing innovation in an organization [63]. Furthermore, sustainable entrepreneurship is also concerned with decision-making, risk-taking research, development, product invention, and dynamic capabilities.

The author [17] argued that “market interaction and entrepreneurs’ life experiences related to the market, industrial knowledge, and resources should be considered for opportunity recognition.” The researchers proposed that an opportunity may have an impression of vaguely distinct market needs, which means that potential consumers may or may not have the capability to articulate their demands and interests. Identifying a customer’s needs might lead to a prompt appearance of opportunity recognition, resulting from better organizational performance [31]. In addition, the researchers suggested that market potential influences opportunity recognition in product development. Therefore, entrepreneurship is related to the process of evaluation, discovery, exploration, sources, and recognition of opportunities that highly influence entrepreneurship and organizational performance.

The onerous task was to identify and select the appropriate research method for the study. There is no single method or knowledge to describe the whole study methodology. At the minimum, one research method should be used at every stage to analyze and formulate the valuable information and data of the study. The research design describes the procedure for collecting and analyzing data, and the quantitative random sampling technique was selected for this study. The study confirms how the researcher defined and practically solved the research problems and makes them as clear as possible. This study evaluates the direct relationships of seven constructs from the proposed research model, as well as the direct, indirect, mediation, and moderation effects.

2.1. Knowledge Sharing Behavior, Dynamic Capability, and Sustainable Entrepreneurship Performance

Thomas Begley and David Boyd came up with five concepts for entrepreneurial performance, such as control/hold, risk-taker, problem solver, knowledge-sharing behavior, and time management [64]. Knowledge-sharing behavior and decision-making power make an entrepreneur active in market knowledge and society, with dynamic capabilities and raising entrepreneurial performance. It is usually based on four fundamentals: face-to-face sharing (knowledge-sharing behavior), value (power), poise (confidence), and patriarchy. Knowledge-sharing behavior of an individual is not enough for the organization; innovative and absorptive capacity are also needed. There is a strong relationship between entrepreneurship and knowledge management [65]. Still, knowledge management is not enough to enhance entrepreneurial performance. Knowledge-sharing behavior with dynamic capabilities exists in an entrepreneur enhance the performance [66]. Some factors are mandatory for entrepreneurial performance, such as knowledge-sharing behavior, innovative capacity, valid strategies, and action plans with dynamic capability [36].

Therefore, in dynamic environments of an organization, knowledge-sharing behavior and one’s own valuable resources develop the dynamic capability for competitive advantages in entrepreneurial performance [67]. The researchers [68] argue that knowledge-sharing behavior helps the dynamic capability to innovate new products, engage the entrepreneur in absorbing the change, show a willingness for competitive advantages, and raise positive change in entrepreneurial performance. The researchers argue that entrepreneurial performance raises dynamic capability due to knowledge-sharing behavior and available resources [69]. The increase in knowledge-sharing behavior makes the dynamic capability stronger for entrepreneurial performance [42].

Hypothesis 1a (H1a).

Knowledge-sharing behavior has a positive influence on sustainable entrepreneurship performance.

Hypothesis 1b (H1b).

Knowledge-sharing behavior has a positive influence on dynamic capability.

Hypothesis 1c (H1c).

Dynamic capability mediates the relationship between knowledge-sharing behavior and sustainable entrepreneurship performance.

2.2. Innovative Capacity, Dynamic Capability, and Sustainable Entrepreneurship Performance

The study mentioned that innovation comes from using different factors such as sharing and absorbing knowledge, whereas dynamic capabilities enhance innovative capacity for entrepreneurship performance [41]. The researcher [70] stated that absorbing external knowledge brings innovation, and innovative capacity causes an advancement in entrepreneurship performance. Different scholars mentioned that absorbing external knowledge prepares the entrepreneur for innovative capacity. When innovative capacity becomes higher, it gives an edge to entrepreneurship performance by using dynamic capabilities [71]. Moreover, for the successful use of innovative capacity, an entrepreneur uses dynamic capabilities to absorb innovation for entrepreneurship performance [72]. To absorb the organizational innovative resources, dynamic capabilities enhance the innovative capacity, differentiating the entrepreneurs across the market due to dynamic capabilities [73].

The dynamic capability is to share, acquire, adapt, and absorb internal and external knowledge that enhances innovative capacity in an entrepreneur [74]. The purpose of dynamic capability is to explore rare and valuable resources for entrepreneurship performance in an organization. The researchers argue that dynamic capability is an important factor for the entrepreneur, who acquires and sustains competitive advantages and assists in managing innovative capacity, according to organizational and entrepreneurial performance [75]. The study revealed that capacity and dynamic capability correlate significantly in entrepreneurial performance [45]. This research explored the effect of innovative capacity on entrepreneurship performance and the role of dynamic capability as a mediator between innovative capacity and sustainable entrepreneurship performance [76]. Therefore, the following hypothesis is proposed:

Hypothesis 2a (H2a).

Innovative capacity has a positive influence on sustainable entrepreneurship performance.

Hypothesis 2b (H2b).

Innovative capacity has a positive impact on dynamic capability.

Hypothesis 2c (H2c).

Dynamic capability mediates the relationship between innovative capacity and sustainable entrepreneurship performance.

2.3. Knowledge-Sharing Behavior, Dynamic Capability, and Organizational Performance

The less valuable but effective organizational capabilities should be shared for organizational performance [46]. In the view of Teece [77], dynamic capability covers all capabilities such as sensing, reconfiguring, and seizing capability in organizational performance. Dynamic capabilities assist in transforming and managing critical situations during the phase of organizational performance. Knowledge always plays a vital role in gaining competitive performance advantages and retaining sustainability in the dynamic economy [78]. Dynamic capability guides organizational performance on transferring expertise and knowledge from experts to novices. Dynamic capabilities guide in utilizing the valuable resources for organizational performance [79]. In the context of dynamic capability, it helps to innovate a new product and engage the organization to accept, create, and show its willingness for competitive advantages through knowledge-sharing behavior for organizational performance [80].

Surprisingly, there is less research that has tested the relationship between organizational performance and knowledge-sharing behavior empirically; therefore, such relationships are not well articulated, especially in the context of the dynamic capabilities of textile-based entrepreneurs. There is a considerable role of dynamic capability as a mediator between organizational performance and knowledge-sharing behavior in the SME sector [1]. Knowledge-sharing is an incentive for organizational performance and increases resources, with dynamic capabilities playing a considerable role as a mediator to innovate new products [78]. The excessive use of dynamic organizational capabilities based on the information depends on the knowledge-sharing in the organization, which leads the organization to better performance. Therefore, the following hypothesis is proposed:

Hypothesis 3a (H3a).

Knowledge-sharing behavior has a positive influence on organizational performance.

Hypothesis 3b (H3b).

Dynamic capability mediates the relationship between knowledge-sharing behavior and organizational performance.

2.4. Innovative Capacity, Dynamic Capability, and Organizational Performance

The researchers discovered that innovative capacity also raises the energy level of an organization, which positively influences performance. In an organization, the dynamic capabilities permit the resources for organizational performance [81]. The organizations with more innovative capacity are likely to complete objectives with such corresponding interactions [68], such as analyzing the cooperation, possession, social relationships, and technical and human resources with dynamic capabilities to determine the innovative capacity in an organization [37] and following different actions with dynamic capabilities that never impede risk-taking attitudes for organizational performance.

Moreover, the organizations with higher innovative capacity are probably more prone to innovative ideas and better positioned to recognize market opportunities to bring out new products earlier than competitors for organizational performance [82]. Secondly, connecting new business with other firms makes it easier for an organization with higher innovative capacity to accumulate the resources required for new items to facilitate the market with better organizational performance [83]. Innovative capacity with dynamic capabilities impacts the basic and simple characteristics of the organization in organizational performance, and it is a fact that dynamic capability influences the relationship between innovative capacity and organizational performance. Consequently, organizational performance can be measured with several parameters, such as financial matters and monetary actions, innovative capacity, and dynamic capabilities [51].

The dynamic power and dynamic ability of a firm with market techniques upgrade inventive capacity, which enhances the process and mechanical advancement performance [60]. The scholars propose that achieving, creating, appropriating, and offering assistance with dynamic capabilities increase the firm’s performance [84]. The formation of a firm based on innovative capacity is central to an intricate chain; the dynamic capabilities shape the value series in an organization and enhance organizational performance. The interchange and utilization of new or former firm resources with innovative capacity increases organizational performance [85]. Therefore, the following hypothesis is proposed:

Hypothesis 4a (H4a).

Innovative capacity has a positive influence on organizational performance.

Hypothesis 4b (H4b).

Dynamic capability mediates the relationship between innovative capacity and organizational performance.

2.5. Dynamic Capability, Sustainable Entrepreneurship, and Organizational Performance

Dynamic capabilities play a role in designing and restructuring the vital environmental changes associated with entrepreneurship performance. In high-tech firms, the dynamic capability of an entrepreneur is the most reliable and sound source to advantage of, which is ultimately beneficial for entrepreneurship performance [22]. Moreover, dynamic capability plays a mediating role between entrepreneurial resources and performance. The resource-based theory also explores the dynamic capability of an entrepreneur for business and entrepreneurship performance. The dynamic capability assists in facing new challenges and catching new opportunities from the market and helps maintain and develop sustainable entrepreneurship performance [86]. Nowadays, the dynamic capabilities of an entrepreneur are the most evolving topic for many researchers, especially in the SME sector. Dynamic capability involves understanding, investigating, and analyzing the entrepreneurial level of competencies for entrepreneurship performance [44]. Prior studies endorsed that the dynamic capability of an entrepreneur enhances resource capacity and entrepreneurship performance in an organization.

Dynamic capability enhances organizational capacities such as innovative capacity, market orientation, market differentiation, low-cost policy, and return on investment, sales, profit, assets, and organizational performance. The representative-driven power, with dynamic capacity in an association, plays a critical effect on upper hands and hierarchical execution [64]. Dynamic capabilities overcome the challenges and assists in achieving the competitive advantages [65]; additionally, they limit the normal contenders’ activities with potential authoritative execution of the promotional section and work with businesspeople and associations via thought creation.

Hypothesis 5a (H5a).

Dynamic capability has a positive and significant impact on sustainable entrepreneurship performance.

Hypothesis 5b (H5b).

Dynamic capability has a positive and significant impact on organizational performance.

2.6. Opportunity Recognition, Dynamic Capability, and Sustainable Entrepreneurship Performance

The theory of OR proposes that the cognition of several entrepreneurs results in different ways of entrepreneurial processes and performance [87]. Meanwhile, the study by Hasan [20] explored the role of opportunity recognition with sustainable entrepreneurship performance as a mediator. Furthermore, existing studies that explored entrepreneurs’ self-made strategies provided significant results in the OR process. However, due to less focus in prior research, this research incorporates the opportunity to evaluate the effect of OR between DC and SEP as a moderator. In this manner, the advantages are significant for business visionaries and affect organizations, except if dynamic capabilities not applied [88]. Dynamic capabilities are the best source of competitive advantages. The opportunity covers the best resources from the market to achieve competitive and sustainable entrepreneurship performance [89].

Hypothesis 6a (H6a).

Opportunity recognition has a positive influence on sustainable entrepreneurship performance.

Hypothesis 6b (H6b).

Opportunity recognition acts as a moderator for the relationship between DC and SEP (an increase in OR will lead to strengthening the relationship between DC and SEP).

2.7. Opportunity Recognition, Dynamic Capability, and Organizational Performance

The opportunity for authoritative execution, a positive business vision, unique abilities, market information, and situating administrations provides more freedom to secure the market to develop and make due [90]. Organizations with dynamic capabilities perform better than those without; meanwhile, opportunity recognition improves product development and organizational performance [91]. Prior studies focused less on SME studies related to dynamic organizational capabilities and drivers in smaller organizations. The researcher in [92] outlined the importance of dynamic capabilities in SMEs for better competitive advantages. The main problem for small–medium enterprises is recognizing the opportunities and the importance of dynamic organizational capabilities for organizational performance. Consequently, this review proposes that better chance acknowledgment would prompt higher authoritative execution. The accompanying hypothesis was thus formed:

Hypothesis 7a (H7a).

OR positively affects organizational performance.

Hypothesis 7b (H7b).

OR moderates between DC and OP.

Conceptual Framework

Figure 1 shows the variable studied in a conceptual model. The study’s purpose was to examine the impact of KMPs (knowledge-sharing behavior) and innovative capacity on sustainable entrepreneurship and organizational performance. Moreover, the study also examined the role of DC and OR as mediators and moderators between KMPs, DCs, SEP, and OP.

3. Materials and Method

This research used a quantitative approach. The numerical data were used to measure the study’s variables in the problem statement and collect data from a large population. The quantitative survey analyzed and explored the research objectives, validity, and reliability of the questionnaire. The researchers outlined that the quantitative research approach is an authentic way to evaluate the relationship among variables [93]. The current study applied a deductive approach to test the proposed hypotheses developed based on the theory [94], and the survey method was applied to examine the hypotheses. The data for this study were collected from respondents using non-probability convenience sampling. The convenience sampling technique was applied to textile-based SMEs of China with the cross-sectional study [95].

The cross-sectional approach was used in the study and a total of 750 questionnaires were distributed in January 2021 among SME entrepreneurs; in return, 650 responses were received and the data collection process was completed in August 2021. The last 480 responses were finalized, and 170 were discarded due to improper and missing information. There is no specific list for SMEs, and the researchers completed the data collection process in different steps due to the busy schedules of the entrepreneurs. The respondents were approached through email and physically for different cities’ listed SMEs (Zhenjiang, Changshu, Hebei, Tianjin, and Wuxi).

Although China is still very involved in the SME sector, textile-based SMEs are less examined. This study was also conducted to examine how corporate-sector firms work with KMPs and what improvement is needed in SME sectors with KM practices to attain long-term entrepreneurial success. Meanwhile, as the fundamental source of knowledge is the acquisition and application of information, which leads to sustainable performance, it may help to understand the specific status of KM practices and provide practical consequences to other non-certified businesses in China. Furthermore, they are better equipped with appropriate information and, at the same time, play an essential role in knowledge transmission among diverse departments. In addition, the researcher also developed trust in the respondents regarding their personal information, which will be kept secret. This research is purely for educational and research purposes.

The sample size selection is also a crucial part of the research methodology; an inadequate sample size could lead to the study’s failure or may not be truly representative of the population. A large sample size of data can create a problem for researchers when collecting and managing data, which causes extra time consumption, which may take away from the actual purpose of sampling [96]. The questionnaire was initially drafted in English, but it was intended for use in Chinese, the official language of China. Therefore, the English questionnaire was translated into simplified and traditional Chinese by the researchers and professional native translators, working independently to ensure consistency and to make it easier for the respondents to comprehend [95]. Moreover, the researchers tried to encourage female entrepreneurs to participate in the survey; however, they mostly refused to participate. Therefore, this study is based on male SME entrepreneurs. The partial least square (PLS)–structural equation modeling (SEM) technique analyzed the proposed research model using Smart-PLS v3. Smart-PLS. It is a powerful tool used to test mediation–moderation models and works with multivariate and normal distributions simultaneously [97]. Additionally, it helps measure the validity and reliability of studies.

3.1. Demographics of Respondents

Table 1. Sample statistic frequency distribution.

Particulars	Description	Frequency	Percentage
Gender	Male	480	100%
Age (in years)	18–25	28	5.83%
	26–32	80	16.67%
	33–39	113	23.54%
	40–46	132	27.50%
	47 Above	127	26.46%
Educational qualification	Middle school	156	32.50%
	High school	132	27.50%
	Graduation level	98	20.41%
	University level	86	17.91%
	Professional education	8	1.67%
Business sector	Power looms	186	38.77%
	Weaving	75	15.62%
	Manual drying units	54	11.25%
	Knitting	86	17.91%
	Seizing	79	16.45%
Business tenure	1–5 years	45	9.37%
	6–10 years	112	23.33%
	11–15 years	97	20.22%
	16–20 years	83	17.29%
	21–25 years	87	18.12%
	25 years above	56	11.67%

describes the sample statistic frequency distribution of the targeted respon- dents. The sample statistics include age, qualification, the business sector of the entrepreneur, and business tenure. The results show that most of the respondents fell in the age group of 40–46 years old (27.50%), whereas 26.46% of the respondents were above 45 years, 23.54% were young entrepreneurs between 33–39, and 22.50% were quite young—below 32 and above 18 years old. Young entrepreneurs with high qualifications and professional education were fewer in number, whereas 32.50% had a middle school and 27.50% had a high school certificate. During the data collection phase, we discovered that most senior entrepreneurs did not have higher education and ran successful enterprises. This may have been due to their leadership abilities, financial support, or other reasons. The textile industry in China consists of several sub-units such as knitting, weaving, seizing, power looms, and manual drying units. Therefore, we considered all these units for data collection, and the percentages are presented.

3.2. The Measures

The researchers developed a structured questionnaire to ensure the content and the realistic and practical implications of the research model. All the studied variables were constructed (adopted and adapted) and operationalized by using the existing literature on sustainable entrepreneurial performance, knowledge-sharing capacity, innovative capacity, dynamic capability, and opportunity recognition. To measure all constructs, a 5-point Likert scale was used ranging from 1 to 5 (from strongly disagree to strongly agree).

As shown in the Appendix A, the questionnaire for all studied constructs. To measure knowledge-sharing behavior, five items were adapted from the study by Hsu [98]. The scale was validated with widely used research and commented on by [99]. To evaluate the innovative capacity, the researchers adopted five measuring scales developed by Hurley [100]. The dynamic capability was measured through six items and the scale was adapted from [101] and commented on by [51]. The six measurement items of opportunity recognition were measured from the study by [88]. The 11 items of sustainable entrepreneurship performance were adopted and measured from the study by [102]. To measure the organizational performance with four items, a scale was adopted from the study by [103].

3.3. Measurement Model

The Statistical Packages for Social Sciences (SPSS) and Smart-PLS software brings fluency and reduce the flaws from collected data. Structural equation modeling, applied to estimate causal and empirical models in research [104], examines the correlation between latent constructs. Smart Partial Least Square (Smart-PLS) tests the path model or SEM for multivariate analysis [105]. Smart PLS measures formative and reflective models and mediating and moderation relationships among the latent constructs in research.

Table 2. Measurement model.

Variables and Constructs	Loadings	CA	rho-A	CR	AVE
Knowledge-Sharing Behavior		0.952	0.954	0.953	0.801
KSB1	0.929
KSB2	0.916
KSB3	0.880
KSB4	0.839
KSB5	0.907
Innovative Capacity		0.934	0.935	0.934	0.738
IC1	0.892
IC2	0.846
IC3	0.870
IC4	0.881
IC5	0.804
Dynamic Capability		0.945	0.952	0.946	0.746
DC1	0.845
DC2	0.791
DC3	0.916
DC4	0.959
DC5	0.852
DC6	0.895
Sustainable Entrepreneurship Performance		0.949	0.950	0.949	0.629
SEP1	0.720
SEP2	0.754
SEP3	0.830
SEP4	0.836
SEP5	0.756
SEP6	0.899
SEP7	0.794
SEP8	0.796
SEP9	0.783
SEP10	0.760
EP11	0.779
Opportunity Recognition		0.940	0.941	0.940	0.722
OR1	0.824
OR2	0.884
OR3	0.804
OR4	0.920
OR5	0.848
OR6	0.813
Organizational Performance		0.933	0.934	0.933	0.777
OP1	0.909
OP2	0.835
OP3	0.888
OP4	0.892

shows the reliability and validity of the latent constructs. A test was applied to analyze and extract the factor loading of the studied variables; as per the rule of thumb, the factor loading values should be at least 0.7. The convergent validity with Cronbach’s alpha, rho_A, the average value extracted [106], composite reliability [107], and confirmatory factor analysis (CFA) was above thrush hold value and acceptable [108]. The values for convergent validity should be higher than the thrush hold values; rho_A ≥ 0.7, CR ≥ 0.8, AVE ≥ 0.50, and CA ≥ 0.80 [109]. The convergent validity for all variables was acceptable and in the range [110].

3.4. Common Method Bias and Multicollinearity Test

The Harman test was applied to the data to determine common method bias (CMB) and the variance inflation factor (VIF) to avoid multicollinearity. There is no issue of common method bias if the merged factors are less than 50% of the variance [111]. Therefore, the authors performed a principle rotated matrix and showed that the first factor of the initial eigenvalue explained 40.24% of the total variance.

3.5. Discriminant Validity

The primary method of the Fornell–Larcker criterion was used to measure the discriminant validity and cross-loadings [112].

Table 3. Fornell-Larcker criterion.

	DC	IC	KSB	OP	OR	SEP
DC	0.864
IC	0.377	0.859
KSB	0.425	0.458	0.895
OP	0.448	0.420	0.515	0.881
OR	0.368	0.202	0.247	0.415	0.850
SEP	0.415	0.467	0.452	0.490	0.379	0.793

shows that the approach of the Fornell–Larcker criterion was fitted to the current research model in discriminant validity.

Table 4. Heterotrait–Monotrait (HTMT) ratios.

	DC	IC	KSB	OP	OR	SEP
DC
IC	0.377
KSB	0.424	0.456
OP	0.449	0.420	0.515
OR	0.370	0.203	0.246	0.413
SEP	0.411	0.466	0.451	0.490	0.379

shows the applied heterotrait–monotrait ratio (HTMT) analysis, which also explored the discriminant validity values [97], and the values were much closer in HTMT path analysis [110]. The HTMT value should be less than 1 between factors. To clearly distinguish between the two factors, the HTMT ratio should be less than 1 [110], and the below table shows that all the values were in accordance with the threshold values. Therefore, it is concluded that there was no discriminant validity issue.

3.6. Structural Model for Entrepreneurial and Organizational Performance

Figure 2 showed the factor loading of latent constructs with acceptable values ≤0.70. The structural model was measured through Smart-PLS by applying bootstrapping at 500 sub-samples. The standardized root mean square residual (SRMR) was applied to the fitness of the model, and the value for a good model should be <0.08 [113].

Table 5. Path Coefficients for direct relations.

Hyp.	Relationships	β	Mean	S.D	t-Value	p-Value	Decision
H1a	KSB -> SEP	0.276	0.279	0.044	6.232	0.000	Accepted
H1b	KSB -> DC	0.319	0.316	0.045	7.141	0.000	Accepted
H2a	IC -> SEP	0.312	0.312	0.047	6.646	0.000	Accepted
H2b	IC -> DC	0.231	0.232	0.047	4.927	0.000	Accepted
H3a	KSB -> OP	0.387	0.386	0.051	7.550	0.000	Accepted
H4a	IC -> OP	0.218	0.217	0.042	5.133	0.000	Accepted
H5a	DC -> SEP	0.174	0.174	0.049	3.554	0.000	Accepted
H5b	DC -> OP	0.212	0.215	0.052	4.044	0.000	Accepted
H6a	OR -> SEP	0.257	0.254	0.050	5.116	0.000	Accepted
H7a	OR -> OP	0.299	0.296	0.051	5.907	0.000	Accepted

shows the direct impacts of all the studied variables. H1a showed a positive and significant impact of KSB on SEP, and therefore H1 is supported (β = 0.276; t = 6.232; p < 0.000). H1b demonstrated a direct significant and positive effect of KSB on DC, and therefore H2 is supported (β = 0.319; t = 7.141; p < 0.000). H2a showed a direct and positive effect of IC on SEP, and is supported (β = 0.312; t = 6.646; p < 0.000). H2b also showed a significant, direct, and positive effect of IC on DC, and therefore H2b is supported (β = 0.231; t = 4.927; p < 0.000). H3a demonstrated a positive and significant effect of KSB on OP, and therefore is supported (β = 0.387; t = 7.550; p < 0.000). At the same time, H4a showed a direct effect of IC on OP; therefore, H4a is supported (β = 0.218; t = 5.133; p < 0.000).

H5a showed a significant, direct, and positive effect of DC on SEP, and therefore H5a is supported (β = 0.174; t = 3.554; p < 0.000). H5b showed a significant effect of DC on OP, and therefore H5b is supported (β = 0.212; t = 4.044; p < 0.000). H6a showed a positive effect of OR on SEP, and therefore H6a is supported (β = 0.257; t = 5.116; p < 0.000). The last direct effect of H7a showed a positive direction of OR on OP; therefore, H7a is supported (β = 0.299; t = 5.907; p < 0.000).

3.7. F-Square and Construct Cross-Validated Redundancy

Table 6. Value of the F-square.

	DC	IC	KSB	OP	OR	OR*DC and OP	OR*DC and SEP	SEP
DC				0.057				0.034
IC	0.054			0.039				0.090
KSB	0.104			0.133				0.056
OP
OR				0.134				0.088
OR*DC and OP				0.096
OR*DC and SEP								0.040
SEP

shows the values for the F-square and construct cross-validated redundancy (Q2), wherein a variable in a structural model may be affected by the number of variables. The F-square is a change in the R-square when the model removes an exogenous variable. The F-square is smaller with a value ≥0.02, medium with a value ≥0.15, and large with a value ≥0.35 [114]. The value of the F-square measures the closeness between the two predictors. An average difference of 10% at all measured time points resulted in an f2 value of 50.

Table 7. Construct cross-validated redundancy.

Constructs	Q² (=1 − SSE/SSO)
DC	0.149
OP	0.313
SEP	0.216

also shows the value for the Q-square, which establishes the predictive relevance of the endogenous constructs. Q2 is a predictive relevance measure of whether a model has predictive relevance or not. The value should be great than 0 for Q2, which shows that the model has predictive relevance, and blindfolding was used to extract the value for Q2 in Smart-PLS.

Table 8. Path coefficient for indirect relationship.

Hyp.	Relationships	β	Mean	SD	t-Value	p-Value	Decision
H1c	KSB→DC→SEP	0.056	0.055	0.018	3.045	0.002	proved
H2c	IC→DC→SEP	0.040	0.041	0.014	2.808	0.005	proved
H3b	KSB→DC→OP	0.068	0.068	0.019	3.587	0.000	proved
H4b	IC→DC→OP	0.049	0.050	0.017	2.840	0.005	proved
H6b	OR*DC→SEP	0.112	0.113	0.026	4.373	0.000	Proved
H7b	OR*DC→OP	0.165	0.163	0.044	3.749	0.000	Proved

shows the indirect effects of KMPs through dynamic capability as a mediator between sustainable entrepreneurship and organizational performance. Furthermore, it also shows the moderating effect of opportunity recognition between dynamic capability with sustainable entrepreneurship and organizational performance. The results for H1c confirm that the DC mediated the relationship between KSB and SEP; therefore, H1c is confirmed (β = 0.056; t = 3.045; p < 0.002). It also shows the partial mediation between KSB and SEP through DC. The results for H2c show that DC partially mediated the relationship between IC and SEP; therefore, H2c is supported (β = 0.040; t = 2.808; p < 0.005).

Furthermore, H3b showed a partial mediating effect of DC between KSB and OP; therefore, H6c is supported (β = 0.068; t = 3.587; p < 0.000). H4b showed a partial mediating relationship of DC between IC and OP; therefore, H4b is supported (β = 0.049; t = 4.373; p < 0.000).

Moreover, this study considered the moderating effect of OR on the relationship between DC with the OP and SEP of textile-based SMEs in China. Table 6, which shows H6b, shows that OR positively and significantly moderated the relationship between DC and SEP (β = 0.112; t = 4.373; p < 0.000). The results for H7b also show that OR strengthened the relationship between DC and OP (β = 0.163; t = 3.749; p < 0.000).

Figure 3 and Figure 4 show the moderating effect of opportunity recognition between dynamic capability with sustainable entrepreneurship and organizational performance [115]. Furthermore, to assess the moderating effects, other rules were applied.

Figure 3 shows that OR was an important factor that positively impacted the relationship between DC and SEP, proving the proposed H6b, which stated that OR has a significant positive moderation effect on the relationship between DC and SEP.

Moreover, Figure 4 shows the moderating effect of OR between dynamic capability and organizational performance, proving H7b, which stated a positive and significant moderation on the relationship between DC and OP.

To consider the strengthening of a moderator, the R2 of a moderator with a full model was evaluated. The values represent moderate moderator, robust, and moderate moderating effects [116].The moderating effect is not mean causal or irrelevant, but even a small interaction might have a strong and meaningful effects between dynamic capabilities with entrepreneurial and organizational performance. It is suggested that the role of opportunity recognition in the relationship between dynamic capability with entrepreneurial and organizational performance could be significant. Opportunity recognition for SME performance moderated the slope for an association between dynamic capability with sustainable entrepreneurial and organizational performance, reflecting that association becomes stronger when there are more opportunities for entrepreneurs and organizations, as the slope shows in Figure 3 and Figure 4.

Table 9. Collinearity statistics (VIF).

DC1	2.910
DC2	2.234
DC3	3.426
DC4	4.841
DC5	4.626
DC6	4.906
EP1	2.273
EP10	2.824
EP11	2.814
EP2	2.823
EP3	3.303
EP4	2.850
EP5	2.249
EP6	3.491
EP7	3.667
EP8	3.059
EP9	2.300
IC1	2.278
IC2	2.680
IC3	4.692
IC4	4.261
IC5	4.299
KSB1	4.253
KSB2	4.857
KSB3	4.264
KSB4	2.893
KSB5	4.333
OP1	3.378
OP2	3.139
OP3	4.905
OP4	4.220
OR1	4.069
OR2	4.088
OR3	2.654
OR4	2.478
OR5	4.436
OR6	3.239

shows the VIF for the studied variables. As per the rule of thumb, the values should be between 5 to 10, and all values were acceptable [117]. None of the values is above 10 in the table, so there was no multicollinearity issue. To ensure and avoid biasness and multicollinearity for the collected data, several tests were applied: path-coefficient, validity, and reliability [97].

4. Discussion

This research was conducted to explore the influence of knowledge management practices on organizational and sustainable entrepreneurship performance, with mediating and moderating effects of dynamic capabilities and opportunity recognition. The path coefficient supported the provided hypotheses empirically and identified significant findings, with a p-value < 0.05 and a t-value > 2.

The results of H1a offer the possibility that KSB has a positive relationship with sustainable entrepreneurship performance, which was previously commented on by [118,119]. This means that KSB can spread important information, which is a valuable asset for sustainable performance [120]. KSB can increase the tendency to understand the organizational domestic and economic challenges an entrepreneur faces in sustainable performance. Knowledge-sharing behavior demonstrates the effect of dynamic capabilities, which help determine, integrate, and reconfigure internal and external capabilities for better sustainable performance. The results support our hypothesis H1b, which proposed that KSB positively influences DC, which is supported by the explanations and consistent with [51]. The dynamic capability helps enhance the internal resources, competencies, and abilities for performance [121]. The result for H1c offers the possibility of dynamic capability as a mediating effect between knowledge-sharing behavior and sustainable entrepreneurship performance, which is consistent with the study by [98]. The explanation for the mediating role of dynamic capability energizes the entrepreneurial performance with knowledge-sharing behavior [122].

The results of H2a offer the possibility of innovative capacity on entrepreneurship performance that was commented on by [100] and other studies by [119] and was associated with the findings of the study. The result for H2b suggests that innovative capacity influenced dynamic capability positively, which is consistent with the prior studies of [123]. The result for H2c confirms that innovative capacity triggered dynamic capability for entrepreneurial performance, and the results are consistent with the studies of [42,100]. These results contribute to innovative capacity with dynamic capability for entrepreneurial performance. When entrepreneurs face adversity, innovative capacity contributes to acquiring, creating, and applying inner values. Innovative capacity boosts decision-making power and leadership abilities; assists as a financial adviser in the organization; is attentive to the organization, awareness, and allocation of better opportunities with better substitutes; and benefits sustainable entrepreneurial performance [124]. Furthermore, the results of H6 confirm that dynamic capacity positively mediated the association between innovative capacity and sustainable entrepreneurial performance. These results are consistent with those of previous studies by [70].

The results for H3a suggest that knowledge-sharing behavior significantly impacted organizational performance and was commented on in the studies of [125]. Furthermore, the results of H3b suggest that dynamic capabilities positively mediated between knowledge-sharing behavior and organizational performance. The study findings prove the proposed hypotheses and are consistent with prior studies [98]. The results of H4a suggest that innovative capacity positively influenced organizational performance, and the study’s finding demonstrates the proposed hypothesis, along with the studies of [126]. The results for H4b suggest a positive role of dynamic capability as a mediator between innovative capacity and organizational performance, which is also consisted with prior studies [127].

The findings for H5a are meaningful and generally consistent with dynamic capability, and positively affected sustainable entrepreneurship performance and are consistent with [127,128]. The results for H5b suggest that dynamic capability positively and significantly affected organizational performance and was commented on by [91] and [129]. The findings for H6a reveal that opportunity recognition positively influenced entrepreneurial performance [87]. Moreover, OR was an important factor that positively impacted the relationship between DC and SEP, proving H6b, which stated that OR has a significant positive moderation effect on the relationship between DC and SEP and is consistent with [90]. The results for H7a suggest that opportunity recognition had a positive and significant impact on organizational performance, which was commented on in prior studies [130]. In contrast, the results for H7b suggest that opportunity recognition moderated between dynamic capability and organizational performance and was commented on in [131,132]. The study findings conclude that KMPs regulated the SME sustainable entrepreneurship and organizational performance.

Furthermore, the results from numerous pieces of literature and legislators indicate that DCs have an important role in SME performance and the OR moderating between DCs with SEP and OP. Prior studies suggested that opportunity recognition intends to enhance SME performance. Thus, the government is focused on establishing SMEs with different kinds of support programs and management just like developed countries, which will lead to long-term benefits, growth, and sustainability of the economy.

5. Conclusions

This research, an empirical study of 480 entrepreneurs and organizational owners, explored the impact of KMPs (knowledge-sharing behavior and innovative capacity) on SMEs’ sustainable entrepreneurship and organizational performance. Furthermore, the study also explored the mediation and moderation (dynamic capability and opportunity recognition) between sustainable entrepreneurship and organizational performance. To be specific, this study considered KMPs as an important antecedent for SME performance. Thus, the study results indicate that the validity and reliability of the measured scales for knowledge-sharing behavior was 0.952, for innovative capacity was 0.934, for dynamic capability was 0.945, for opportunity recognition was 0.940, for entrepreneurial performance was 0.949, and for organizational performance was 0.933. To test and assess the multiple levels of latent and observed variables, this method was suitable for evaluating the theory [107,133]. The studied path coefficient provided empirical support to the proposed seven hypotheses (a,b,c), and found significant findings with a p-value < 0.05 and t-value > 2 [106].

This study’s findings indicate that knowledge management methods had a considerable impact on SME entrepreneurial performance, as evidenced by the significant beta coefficient, t-values, and p-values. The study objective was to examine the concept of knowledge management practices to provide better services (knowledge-sharing behavior, innovative capacity) to the SMEs’ entrepreneurial and organizational performance. Secondly, the study examined the mediating and moderating role of dynamic capability and opportunity recognition for SMEs’ entrepreneurial and organizational performance. Thus, the findings of this study also identified that the promotion of SMEs’ entrepreneurial and organizational performance would play a vital role in developing the weak economy. Dynamic capabilities and opportunity recognition with capital support from the government would also be important and support elements for SME performance.

SME entrepreneurs and organizations face many challenges for better performance, lack proper guidance, have inadequate facilities and infrastructure, and need educational and technical skills. It was surprising to learn that most SMEs do not survive more than a few years. In this situation, knowledge management practices play an important role in developing and growing small–medium businesses. Numerous studies have explored the critical role of knowledge management practices in SME performance and economic growth. The Republic of China has taken the initiative to support SMEs through different departments, the Small and Medium Enterprises Development Authority (SMEDA), and incubation centers, which are doing a great job for entrepreneurs and SME organizations. Still, they needed to work on SME enhancement and performance. The guidance in recognizing opportunities for private SMEs must be fast and advanced, which will benefit SME performance.

The findings of this study also suggest that the government should conduct a one-window strategy to guide SMEs for better performance, which may be linked with other concerned departments, such as those assisting in a startups or new businesses or those that run existing businesses. This study focused on textile-based SMEs and wanted to improve their productivity. The government needs to establish different technical service centers for training and planning for under-trained staff for guidance. Furthermore, these research findings also suggest that if the government wants the SMEs to grow and play a crucial role in the growing economy, then the emerging and emerging economies should develop SMEs with proper and appropriate institutions.

6. Theoretical Implications

The study contributes to the existing literature on SME performance (entrepreneurial and organizational). The study contributes to the literature on SMEs with KMPs, capabilities, and opportunities. This research will help develop government and non-government SMEs (textile-based), which will increase the graph of business successors and contribute to SME performance. The study used a combination of different theories that were not used before and also suggests that textile-based SMEs are linked to entrepreneurship theory and organizational learning theory, which plays a vital role between knowledge management practices, dynamic capabilities, and opportunity recognition for SME performance. This study will also help future researchers in similar fields, leading to better results.

7. Practical Implications

This study will also help SMEs build up a more powerful method for moving information in an organization to foster a better atmosphere for accomplishing objectives against competitors. It is important for organizations’ performance and economy because they are facing a deficiency of inner and outer data, influencing performance. For instance, an innovation with the dynamic capabilities of SMEs develops organizational and entrepreneurial quality across the organizational boundaries. This study can also be helpful to fresh researchers in terms of research and existing entrepreneurs in terms of better performance. This study also brings the literature on knowledge management practices into a broader perspective for SME performance. Therefore, this study also contributes to the conceptual framework for entrepreneurial and organizational performance.

8. Limitations and Future Research Directions

The study has a few limitations, which need to be acknowledged. The data were collected from one source or the same source. The discriminant validity in the CFA analysis confirmed the directional relations of all constructs. Therefore, caution should be applied during interpretation. There are a few limitations and future directions in this study, such as the study being limited to a cross-sectional analysis, not longitudinal analysis. It is recommended for researchers to conduct longitudinal analysis for better results and include more SME disciplines from China. Future studies may include control variables (government regulation and demographics).

This study sample was limited, and the respondents were 100% males due to the nature of the business. This finding might have been impacted by sex separation. Thus, for future examination, replication of the current review ought to consider sex. Last, the proposed research model was tried on Chinese male businesspeople and associations going through male finance managers. Notwithstanding, for future proposals, examinations might consider more and various businesses, including large amounts of test information with male and female businesspeople. This exploration might repeat and build on the examination model for increased relevance of the findings.