Sustainable Entrepreneurship: Romanian Entrepreneurs’ Funding Sources in the Present-Day Context of Sustainability

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

Introduction:

This section should include a more detailed discussion of the current context of sustainable entrepreneurship in Romania, highlighting specific trends and the study's relevance in this context. It is essential to offer clear and comprehensive definitions of key terms like sustainable entrepreneurship and funding sources to establish a common understanding. The rationale for choosing the topic should be reinforced, demonstrating the existing gap, and this paragraph should be supported by relevant and current literature. The study's objectives and research questions should be specified at the beginning to guide the reader.

 

Literature Review:

Detail how about sustainable entrepreneurship in Romania compares with global trends using international studies. Include studies with differing viewpoints or contradictory results for a more balanced review. Deepen the critical analysis of existing studies, highlighting gaps and how this study contributes to filling them. Restructure the literature review to facilitate the understanding of the themes covered and their relevance to the current study.

 

Research Objectives and Hypotheses:

This section currently needs to be clarified and needs a better explanation and connection with the research objective, research questions, and hypotheses, clearly and supported by the literature.

 

Results and Discussion:

Clarify how regression models are constructed and interpreted, including details about the dependent and independent variables and how they are operationalized. Provide a more detailed discussion on why certain statistical methods were chosen and how they align with the research objectives.

 

Conclusions and Proposals:

Come to the conclusion clearer and more structured. This includes a summary of the most important findings, followed by practical implications and specific recommendations, and a conclusion with limitations and future directions. Deepen the connection of the results with the existing literature. This reinforces the study's relevance and helps to position its findings within the broader field. Detail the study's limitations and suggest specific directions for future research, which can help other researchers build upon the current work.

 

 

Author Response

Dear Reviewer #1,

 

We extend our sincere appreciation for the constructive feedback you have provided. Your insightful comments have been instrumental in identifying areas for enhancement in our manuscript.

In light of your valuable suggestions, we are confident that our work can be significantly improved. Please find below our response:

 

Point 1: Introduction:

This section should include a more detailed discussion of the current context of sustainable entrepreneurship in Romania, highlighting specific trends and the study's relevance in this context. It is essential to offer clear and comprehensive definitions of key terms like sustainable entrepreneurship and funding sources to establish a common understanding. The rationale for choosing the topic should be reinforced, demonstrating the existing gap, and this paragraph should be supported by relevant and current literature. The study's objectives and research questions should be specified at the beginning to guide the reader.

 

Response: LINES:  37-39; 43-46; 72-82; 94-105.

Thank you very much for the suggestion! We modified the introduction section and added the following material:

 “Funding concerns the allocation of internal resources from the state budget or from international bodies and institutions for the purpose of establishing and operating a company.”

 

 “In Romania, according to the context of sustainable development, entrepreneurship aims at designing business models that contribute to the promotion of sustainable development objectives. The activity of entrepreneurs is manifested within the framework of an ecosystem where access to financing can be favoured.”

 

 “From the minute analysis of the specialized literature, the authors identified detailed studies on the funding sources, sustainability and performance of companies, but each of them analysed the terms separately or in pairs (2 by 2) [8-10]. The authors of the paper searched the Web of Science Core Collection database for the three terms (sources of funding, sustainability, company performance). Filtering the results by Keyword Plus, no result was displayed; filtering by Topic, only 26 results were displayed, out of which 20 scientific articles and 6 proceeding papers. However, they analyse specific topics, such as: supply chain, sustainable projects, food industry, banking sector etc. The identified gap starts from combining the study of the previously mentioned three concepts, at the level of SMEs, being extremely important in the current context.”

 

 “The paper investigates the funding sources that Romanian entrepreneurs can call upon in the current context of sustainability. In order to understand the implications of the use of funding sources on the sustainable development of businesses, the following research questions were formulated: (i) What are the ways of implementing sustainability strategies by entrepreneurs?; (ii) What are the types of funding sources that entrepreneurs know?; (iii) What are the types of funding sources that entrepreneurs want to use in the future in the current context of sustainability? Elaborating the answers to these research questions, the study transmits information about the potential for identification by entrepreneurs of the most suitable economic sustainability strategies while preserving the environmental and social objectives [11], the state of knowing the funding sources available to SMEs, the link between sustainability and the company performance moderated by the used funding sources.”

 

 

 

Point 2: Literature Review:

Detail how about sustainable entrepreneurship in Romania compares with global trends using international studies. Include studies with differing viewpoints or contradictory results for a more balanced review. Deepen the critical analysis of existing studies, highlighting gaps and how this study contributes to filling them. Restructure the literature review to facilitate the understanding of the themes covered and their relevance to the current study.

 

Response: LINES:  118-119; 132-150; 210-220.

Thank you very much! We have restructured the entire structure of the study, given up a subsection and renamed the existing sections, where appropriate. We added explanations in this section:

 “The specialized literature review was written based on solid information, which then led to the formulation of three hypotheses.”

 

 “According to the Global Entrepreneurship Monitor GEM [14], in Romania entrepreneurial activity is below the average calculated in the case of middle-income economies as well as below the average of the GEM participating countries and the rate of those who in the next three years intend to start a business is 14.93% of the adult population. This rate is higher than that registered in Hungary (10.66%) or Poland (3.69%). In the case of the countries analysed within GEM, in Croatia this rate is slightly higher (3:1), in the case of Hungary it is lower (1:1), and in Poland the rate is 0.18 (there are five times fewer entrepreneurs at an early stage than established entrepreneurs).

The rate of business angel investments in the analysed countries is lower than the considered averages. Only 2.61% of the adult population of Romania stated that in the last three years they provided funds for the start of a new business by another person [14].

Also, according to GEM, the established entrepreneurs in Romania consider the sustainable entrepreneurship to be important taking into account the social (71.25%) and environmental (82.33%) implications of decisions in a higher proportion than the average of middle income countries and the GEM average. A significant proportion of the experienced entrepreneurs (67.98%) consider that the social and/ or environmental impact must be placed before the criterion of profitability or business development. Poland’s extremely low weights regarding these aspects are noticeable [14].”

 

 “Internal financing resources represented by the reinvestment of profit or the sale of assets from the company patrimony and loans from shareholders or capital increases represent the main funding source for companies in Romania [45]. According to the study carried out by the National Bank of Romania (NBR) [45], among the least pressing problems faced by companies is the access to financing in the context in which 78 percent of companies did not turn to funding sources from the banking sector (loans or overdrafts) in the last 12 months.

However, in contradiction with the NBR study, in their concern for development in the context of sustainability, the companies take decisions regarding the reinvestment of profit for financing activities taking into account that the accessibility to other funding sources is more difficult [46].”

 

Point 3: Research Objectives and Hypotheses:

This section currently needs to be clarified and needs a better explanation and connection with the research objective, research questions, and hypotheses, clearly and supported by the literature.

 

Response: LINES:  362-366

In order to answer this point as well as possible, we moved the hypotheses of the study to the Literature Review and Hypotheses Development Section (renamed section). Thus, the hypotheses are strongly supported and substantiated by the specialised literature. At the same time, we created Figure 1, which shows the research design for a better clarification and we added the following material:

 “In order to achieve the purpose of the present study, the research design (Figure 1) is presented, being based on the key concepts analysed in the specialised literature.

 

 

Figure 1. Research Design from the Researchers’ Questions to the Model Conceptualization.

Source: Carried out by the Authors of this paper.”

 

Point 4: Results and Discussion:

Clarify how regression models are constructed and interpreted, including details about the dependent and independent variables and how they are operationalized. Provide a more detailed discussion on why certain statistical methods were chosen and how they align with the research objectives.

 

Response: LINES:  554-562; 497-503; 933-98.

We added the following material:

 “We chose the PROCESS macro over SEM because it is a more recent method for data analysis, which provides a graphical description of moderate correlations. In addition, this approach generates a moderate mediation index that indicates whether the study model should be accepted or rejected. All calculations of statistical indicators were performed in SPSS, being calculated: , F test, Coefficients b, Standard Error, t test, p value, Coefficient Effects. In order to sketch and develop the moderation link, a regression function was created which shows that the global regression is statistically significant (= 0.100, F (3, 263) = 9.703, p = 0,000).”

 

 “The literature on SME funding is extensive and there are many empirical studies. The authors have selected some relevant studies from the scientific field, in which similar variables are used. The nexus between environmental, social and governance (ESG) performance and corporate capital financing decisions is analysed by Zahid [132]. Another research in the field shows the moderation of financial objectives [133]. Other studies that used variables similar to those included in the present study are: Relational capital [8], sustainable business models [9], SME growth [10] and CSR Audit Quality [134].

In order to design the regression function, it was necessary to create the following factors, which were created starting from the theoretical foundation supported in works from the specialised literature.”

 

 “The empirical results in Table 11 are also supported by studies that present the relationship between the analysed terms. The study on sustainable competitiveness in business also includes the interrelationships between the profitability and sustainability of the company [167]. Another article presents the link between performance and sustainable growth [168], while another research addresses the topic of income flows that ensure financial sustainability in 8 EU countries, including Romania [169].”

 

Point 5: Conclusions and Proposals:

Come to the conclusion clearer and more structured. This includes a summary of the most important findings, followed by practical implications and specific recommendations, and a conclusion with limitations and future directions. Deepen the connection of the results with the existing literature. This reinforces the study's relevance and helps to position its findings within the broader field. Detail the study's limitations and suggest specific directions for future research, which can help other researchers build upon the current work.

 

Response: LINES:  1019-1047; 1068-1088; 1096-1110; 1106-1109.

We changed the entire structure of the information in this chapter and added the following material:  “From the registered results, it is noted that profit reinvestment is the most frequently used funding source, followed by bank credit and leasing, while the least used source is Business Angels.

From the funding sources analysed in the research, the highest level of future use intention is registered for profit reinvestment (with more than half of the respondents) followed by bank loans, leasing and personal funds.

Related to the concept of sustainable business and sustainability, the study highlighted that, in general, the management of the SMEs considers them important and very important, a fact demonstrated by the result that shows that half of the surveyed companies have defined a sustainability strategy. Moreover, the connection between the existence of a sustainability strategy and the respondents’ gender was tested and demonstrated.

This research demonstrates that most entrepreneurs appreciate the importance of funding sources in the transition to a more sustainable future. In this sense, the paper demonstrated the existence of a relationship between the level of sustainability of companies and the turnover, moderated by the use level of funding sources.

An important conclusion of the present study consists in developing the CSFS Model that succeeded in presenting the connection between sustainability, funding sources and performance (confirming, once again, the moderation relationship demonstrated by the regression function).

The study makes a consistent summary of the specialised literature, one of the implications of the work being the enrichment of the specialised literature through the model suggested in the work, but also through the demonstration of the moderation relationship realized in the regression function. The theoretical implications consist in the collaboration of the SMEs with governmental and financial organizations, researchers in the field or other bodies to develop and promote new frameworks and programs for the implementation of funding solutions suited to the needs of the SMEs. It is concluded that government programs to support SME lending must be oriented towards fields with high added value, with a high level of technology facilitating the green transition [45].”

 

 “The comprehensive analysis of the literature also led to a series of practical implications for the SME managers, regarding the funding sources. It was found that the integrated strategic thinking such as the choice of the most suitable funding sources to support practices regarding operational and economic organizational sustainability, risk management regarding the costs associated with financing, combining several internal and external funding sources and resorting to innovative funding sources can cause changes in business development.

In order to achieve organizational operational and economic sustainability, companies must evaluate and improve their corporate competencies, assess their level of knowledge of different funding sources, innovative financial technologies and their impact on sustainability. Also, organizations must improve adaptability and flexibility by restructuring existing business models and processes [2]. This involves the use of new strategies and the use of advanced technology to add value and stability to the business, flexibility and agility in calling on the various funding sources existing at the level of the economy with an impact on environmental and social actions in order to ensure and maintain their performance.

The study gave birth to practical implications for the national economy as well, since sustainability strategies at the micro level have an effect on economic well-being and the adoption of decisions regarding the recovery and resilience mechanism so that economies become more sustainable, more resilient and better prepared for the green transition and the digital one.”

 

 “Another limitation of the study refers to the analysis of the seven most well-known and used funding sources, perhaps excluding innovative funding sources from the analysis. At the same time, in a future research, large and very large companies can be included, a limitation of the present study is the survey of only the SMEs.”

 

 “A future study may analyse the opinion of future entrepreneurs, of people who intend to open a business in the immediate future, to be able to observe and compare the possible differences between the opinions of people who have experience in running a business and people who are going to open and manage a business.”

 

 

We genuinely appreciate your expertise and input, which have been immensely beneficial in refining our study. Your suggestions have prompted us to re-evaluate and enhance our approach, ultimately strengthening the robustness of our findings.

 

Thank you once again for your invaluable feedback.

 

Thank you for your contribution to this manuscript.

Sincerely yours,

The Authors

Reviewer 2 Report

Comments and Suggestions for Authors

The manuscript addresses an interesting and relevant research topic on the sustainable entrepreneurship and sources of financing in Romania. This being said, there remain critical issues that challenge the overall quality of the manuscript. These issues should be reworked before the manuscript is ready for publication.

In the introduction, contributions of the study need to be explicitly identified and briefly elaborated.

Formulated hypotheses in section 3.1 need to be explained and backed up by theory and previous empirical studies.

The dependent and independent variables should be referenced. That is, which previous studies used these variables or similar? The literature on SME financing is extensive and there are many empirical studies.

How is the discussion on Q2 and corresponding results on pages 13 and 14 related to hypotheses formulated on page 5? If research objectives on page 5 are not associated with hypotheses formulated on page 5, what are they associated with?

Similarly, how is the discussion on Q3 and corresponding results on pages 14 -18 related to hypotheses formulated on page 5? If research objectives on page 5 are not associated with hypotheses formulated on page 5, what are they associated with?

Which estimator is used to obtain results in Table 11?

Empirical results in Table 11 assume that only two factors that affect SME sustainability are turnover and the use of funding resources. Please reference those studies that also claim that sustainability is a function of turnover and funding resources and no other factors.

Does Table 12 show marginal effects? If not, how is the model in Table 12 specified?

Section 5 should be called “Conclusions and implications”.

What are the managerial and policy implications of the study? They should be discussed in the conclusion.

 

 

Comments on the Quality of English Language

The quality of English is good. 

Author Response

Dear Reviewer #2,

 

We extend our sincere appreciation for the constructive feedback you have provided. Your insightful comments have been instrumental in identifying areas for enhancement in our manuscript.

In light of your valuable suggestions, we are confident that our work can be significantly improved. Please find below our response:

 

Point 1: The manuscript addresses an interesting and relevant research topic on the sustainable entrepreneurship and sources of financing in Romania. This being said, there remain critical issues that challenge the overall quality of the manuscript. These issues should be reworked before the manuscript is ready for publication.

                                                 

Response:

Thank you very much for your appreciation. We have made the requested changes and you can find below the answer for each point. We greatly appreciate your feedback that contributed to the improvement of our study.

 

Point 2: In the introduction, contributions of the study need to be explicitly identified and briefly elaborated.

 

Response: LINE: 106-110.

Thank you very much for the suggestion! We added the following material: 

“The notable contribution of this research consists in explaining the connection be-tween sustainability and company performance moderated by the level of use of the funding sources, together with which the authors developed the CSFS model that systematically presents the Connection between Sustainability, Funding Sources and Performance.”

 

Point 3: Formulated hypotheses in section 3.1 need to be explained and backed up by theory and previous empirical studies.

 

Response: LINE: XX-XX

In order to answer this feedback as well as possible, we moved the hypotheses of the study within the framework of the Literature Review and Hypotheses Development Section (renamed section). Thus, the hypotheses are strongly supported and substantiated by the specialised literature. At the same time, we removed Subsection 3.1 entitled Research Objectives and Hypotheses.

 

Point 4: The dependent and independent variables should be referenced. That is, which previous studies used these variables or similar? The literature on SME financing is extensive and there are many empirical studies.

 

Response: LINE: 497-503.

We added the following material:

“The literature on SME funding is extensive and there are many empirical studies. The authors have selected some relevant studies from the scientific field, in which similar variables are used. The nexus between environmental, social and governance (ESG) performance and corporate capital financing decisions is analysed by Zahid [132]. Another research in the field shows the moderation of financial objectives [133]. Other studies that used variables similar to those included in the present study are: Relational capital [8], sustainable business models [9], SME growth [10] and CSR Audit Quality [134].”

 

Point 5: How is the discussion on Q2 and corresponding results on pages 13 and 14 related to hypotheses formulated on page 5? If research objectives on page 5 are not associated with hypotheses formulated on page 5, what are they associated with?

 

Response: LINE: 541-553.

For a better clarification for the potential readers of the article, we have clarified and added information about assumptions in subchapter 3.5 entitled Data Analysis, information about the hypotheses:

 “In order to test the correlations between the variables (Hypothesis 1), the descriptive statistics were inspected and the Chi-square analysis (), performed, which confirmed with a probability of 95% that there is a connection between the existence of a sustainability strategy and the gender of the respondents (= 6.241 >  = 5.99).

In order to check the second hypothesis (H2), the non-parametric Kolmogorov-Smirnov test was applied. After applying the test, the alternative hypothesis is accepted and the null hypothesis is rejected, which means that there are significant differences between the definition of the sustainability strategy and the priority of the CSR companies ( 37.1% > 16.66%).

In order to test the moderating role of the relationship between the level of sustainability of companies and the turnover, moderated by the level of the use of the funding sources (Hypothesis H3), it was used model 1 of the Hayes PROCESS macro for SPSS [139,140].”

 

Point 6: Similarly, how is the discussion on Q3 and corresponding results on pages 14 -18 related to hypotheses formulated on page 5? If research objectives on page 5 are not associated with hypotheses formulated on page 5, what are they associated with?

 

Response: LINES:  362-366.

In order to make it as clear as possible, we created Figure 1, which shows the research design for a better clarification and we added the following:

 “In order to achieve the purpose of the present study, the research design (Figure 1) is presented, being based on the key concepts analysed in the specialised literature.

 

Figure 1. Research Design from the Researchers’ Questions to the Model Conceptualization.

Source: Carried out by the Authors of this paper.”

 

Point 7: Which estimator is used to obtain results in Table 11?

 

Response: LINES:  926-933.

We added in Table 11 the values Se as well as the interpretations:

“Standard Error values between 0.029 and 0.046 can be observed. At the same time, the estimators are significantly different from 0 because each of them registers P-value lower than 0.05, the significance threshold allowed for the confidence intervals of the estimators, implicitly at a probability of 95%. This finding is also confirmed by the confidence intervals of the coefficients, which do not change the sign from the lower limit to the upper one, so they do not contain the value 0. The confidence intervals can be observed as follows:

(3)”

 

Point 8: Empirical results in Table 11 assume that only two factors that affect SME sustainability are turnover and the use of funding resources. Please reference those studies that also claim that sustainability is a function of turnover and funding resources and no other factors.

 

Response: LINE: 933-938.

We added the following:

“The empirical results in Table 11 are also supported by studies that present the relationship between the analysed terms. The study on sustainable competitiveness in business also includes the interrelationships between the profitability and sustainability of the company [167]. Another article presents the link between performance and sustainable growth [168], while another research addresses the topic of income flows that ensure financial sustainability in 8 EU countries, including Romania [169].”

 

Point 9: Does Table 12 show marginal effects? If not, how is the model in Table 12 specified?

 

Response: LINE: 939-944; 953-955.

Table 12 shows the moderating effects of the regression function and we added the following specifications:

 “To further establish that the effect differs depending on the level reached by the company regarding the use of funding sources, we employed a bootstrapping procedure by quantifying the low-level effect (-1SD), the effect at the mean and high level (+1SD) [170]. Table 12 presents coefficient effects of the predictor (level achieved by the company for sustainability) at these values of the moderator (level achieved by the company regarding the use of funding sources).”

 

 “The statement is supported by the increase of the coefficient from 0.016 (low use level of funding sources) to 0.143 (high use level of funding sources).”

 

Point 10: Section 5 should be called “Conclusions and implications”.

 

Response: LINE: 997.

Thank you very much for the suggestion. We changed the title of the section. 

“5. Conclusions and Implication”

 

Point 11: What are the managerial and policy implications of the study? They should be discussed in the conclusion.

 

Response: LINE: 1068-1088.

We added the following material:

“The comprehensive analysis of the literature also led to a series of practical implications for the SME managers, regarding the funding sources. It was found that the integrated strategic thinking such as the choice of the most suitable funding sources to support practices regarding operational and economic organizational sustainability, risk management regarding the costs associated with financing, combining several internal and external funding sources and resorting to innovative funding sources can cause changes in business development.

In order to achieve organizational operational and economic sustainability, companies must evaluate and improve their corporate competencies, assess their level of knowledge of different funding sources, innovative financial technologies and their impact on sustainability. Also, organizations must improve adaptability and flexibility by restructuring existing business models and processes [2]. This involves the use of new strategies and the use of advanced technology to add value and stability to the business, flexibility and agility in calling on the various funding sources existing at the level of the economy with an impact on environmental and social actions in order to ensure and maintain their performance.

The study gave birth to practical implications for the national economy as well, since sustainability strategies at the micro level have an effect on economic well-being and the adoption of decisions regarding the recovery and resilience mechanism so that economies become more sustainable, more resilient and better prepared for the green transition and the digital one.”

 

The article has been grammatically revised, and English has been improved. We revised all the sentences.

We genuinely appreciate your expertise and input, which have been immensely beneficial in refining our study. Your suggestions have prompted us to re-evaluate and enhance our approach, ultimately strengthening the robustness of our findings.

 

Thank you once again for your invaluable feedback.

 

Thank you for your contribution to this manuscript.

Sincerely yours,

The Authors

Author Response File: Author Response.pdf

Reviewer 3 Report

Comments and Suggestions for Authors

The paper in the introduction states covid is still reason for instability , however that is not the case. You can upate it with new crisis and reasons for sustainability issues – view article Sustaining company performance during the war-induced crisis using sourcing capability and substitute input

 

Some aspects not clear, the hypotheses are stated in beginining without reason, and they all assume there is no relationship, however in the latter part of the article their assumption is there is a link. There is lack of coherency.

Expanding the analysis to include more diverse and innovative funding sources, like crowdfunding or social impact bonds, could provide a more comprehensive view of the current funding landscape.- Wang (2023). Fintech, Financial Constraints and OFDI: Evidence from China. Global Economic Review.

While the paper mentions a quantitative approach, it could benefit from more detailed descriptions of the methodologies used, such as the specific statistical techniques and their rationale.

The paper could be organized more effectively. Some sections seem overly dense, which might hinder reader comprehension. Appendix not neccessary , also some tables put akwardly.

Improve by providing a deeper analysis of how different funding sources specifically impact sustainability practices. The literature on gender impact can be introduced - Individual investors’ trading behavior and gender difference in tolerance of sex crimes: Evidence from a natural experiment. Journal of Empirical Finance, 73, 349-368

While the paper concludes with general suggestions, a more detailed discussion on practical applications for businesses and policymakers would add value.The impact of broader economic and policy changes on funding sources and sustainability could be explored.

Comments on the Quality of English Language

proofread and improve

Author Response

Dear Reviewer #3,

 

We extend our sincere appreciation for the constructive feedback you have provided. Your insightful comments have been instrumental in identifying areas for enhancement in our manuscript.

In light of your valuable suggestions, we are confident that our work can be significantly improved. Please find below our response:

 

Point 1: The paper in the introduction states covid is still reason for instability, however that is not the case. You can upate it with new crisis and reasons for sustainability issues – view article Sustaining company performance during the war-induced crisis using sourcing capability and substitute input.

 

Response: LINES:  32-36.

Your insightful caution regarding the introduction weakness led us to to restructure the information of the entire section. We replaced the pandemic by the crisis triggered by the war and referred to the source mentioned by you. Thank you.

We added:

“In the current economic context, characterised by multiple recent crises (the crisis triggered by the war, the energy crisis, the food crisis, and the international economic crisis, etc.), and an unprecedented development of sustainability [1], entrepreneurs are seeking to identify effective cost reduction initiatives based on resource reallocation [2]”

 

Point 2: Some aspects not clear, the hypotheses are stated in beginining without reason, and they all assume there is no relationship, however in the latter part of the article their assumption is there is a link. There is lack of coherency.

 

Response: LINES:  185-186; 202-203; 330-332.

Thank you very much for your observation. In order to answer this feedback as well as possible, we moved the hypotheses of the study within the framework of the Literature Review and Hypotheses Development Section (renamed section). Thus, the hypotheses are strongly supported and substantiated by the specialised literature. At the same time, we removed Subsection 3.1 entitled Research Objectives and Hypotheses. And, of course, we reformulated the hypotheses as follows:

“Hypothesis 1 (H1). Verifying the connection between the existence of a sustainability strategy and the gender of the respondents.”

 

“Hypothesis 2 (H2). Verification of the connection between the definition of the sustainability strategy and the priority of CSR-type actions.”

 

“Hypothesis 3 (H3). There is a moderating effect of the relationship between the sustainability level of the companies included in the research and the turnover, moderated by the level of use regarding the 7 funding sources.”

 

Point 3: Expanding the analysis to include more diverse and innovative funding sources, like crowdfunding or social impact bonds, could provide a more comprehensive view of the current funding landscape.- Wang (2023). Fintech, Financial Constraints and OFDI: Evidence from China. Global Economic Review.

 

Response: LINES:  225-231; 272-277.

Thank you for your observation. We also added the innovating funding sources.

 “Fintech contributed to the creation of a wide range of new services, here being included the asset management, online banking services [53] and can add value to the quality of financial services. Numerous companies have added to their objectives the provision of advanced technological support to financial institutions, but also to non-financial ones, contributing to their digital transformation [54]. Fintech promotes internet credit and instant payment determining a reduction of the financing constraints for the SMEs [55].”

 

“Together with other sources, the crowdfunding [84-86] and the Social Impact Bonds (SIB) represent innovative funding sources for projects that are developing extremely dynamically. Sustainable financing and impact funding use financial instruments, such as: the SIBs [87-89] and the green bonds, and they are usually owned by those who are interested not only in the financial return of their investments, but also in its social impact.”

 

Point 4: While the paper mentions a quantitative approach, it could benefit from more detailed descriptions of the methodologies used, such as the specific statistical techniques and their rationale.

 

Response: LINES:  362-366; 497-503; 535-553; 558-562.

Thank you for the extremely valuable observation! To render the issue as faithfully as possible, we created Figure 1, which reproduces the research design for a better clarification and added the following: 

“In order to achieve the purpose of the present study, the research design (Figure 1) is presented, being based on the key concepts analysed in the specialised literature.

 

Figure 1. Research Design from the Researchers’ Questions to the Model Conceptualization.

Source: Carried out by the Authors of this paper.”

 

“The literature on SME funding is extensive and there are many empirical studies. The authors have selected some relevant studies from the scientific field, in which similar variables are used. The nexus between environmental, social and governance (ESG) performance and corporate capital financing decisions is analysed by Zahid [132]. Another research in the field shows the moderation of financial objectives [133]. Other studies that used variables similar to those included in the present study are: Relational capital [8], sustainable business models [9], SME growth [10] and CSR Audit Quality [134].”

 

“To understand the pattern of entrepreneurs’ reactions regarding the funding sources, the Principal Component Analysis – PCA (a method that belongs to multivariate data analysis) was used. In order to complete the analysis, there were used correlation matrix, Varimax rotation method and Graphical Representation of the Association between Variables and Factors.

In order to test the correlations between the variables (Hypothesis 1), the descriptive statistics were inspected and the Chi-square analysis (), performed, which confirmed with a probability of 95% that there is a connection between the existence of a sustainability strategy and the gender of the respondents (= 6.241 >  = 5.99).

In order to check the second hypothesis (H2), the non-parametric Kolmogorov-Smirnov test was applied. After applying the test, the alternative hypothesis is accepted and the null hypothesis is rejected, which means that there are significant differences between the definition of the sustainability strategy and the priority of the CSR companies ( 37.1% > 16.66%).

In order to test the moderating role of the relationship between the level of sustainability of companies and the turnover, moderated by the level of the use of the funding sources (Hypothesis H3), it was used model 1 of the Hayes PROCESS macro for SPSS [139,140].”

 

“All calculations of statistical indicators were performed in SPSS, being calculated: , F test, Coefficients b, Standard Error, t test, p value, Coefficient Effects. In order to sketch and develop the moderation link, a regression function was created which shows that the global regression is statistically significant ( = 0.100, F (3, 263) = 9.703, p = 0,000).”

 

Point 5: The paper could be organized more effectively. Some sections seem overly dense, which might hinder reader comprehension. Appendix not neccessary, also some tables put akwardly.

 

Response: LINES:  117; 333; 526, 997.

Thank you for your observation! The appendices have been deleted, the tables have been reset and the structure has been modified, subchapter 3.1 entitled Research Objectives and Hypotheses has been deleted, the subchapters belonging to section 3 have been renumbered and the following  section titles have been modified:

 “2. Literature Review and Hypotheses Development”

 

“3. Research Method and Objectives”

 

“3.5. Data Analysis”

 

“5. Conclusions and Implications”

 

Point 6: Improve by providing a deeper analysis of how different funding sources specifically impact sustainability practices. The literature on gender impact can be introduced - Individual investors’ trading behavior and gender difference in tolerance of sex crimes: Evidence from a natural experiment. Journal of Empirical Finance, 73, 349-368.

 

Response: LINES:  179-183; 144-149.

Thank you for your suggestion. We integrated the new reference item and added the following:

“The analysis of different funding sources provides an image of their influence on sustainability practices. For example, in the case of the capital market (funding source with a high degree of vulnerability), the attitude of this type of investors to certain actions of the leadership can be felt on the investment decisions and the appreciation of the company strategy [34].”

 

“Also, according to GEM, the established entrepreneurs in Romania consider the sustainable entrepreneurship to be important taking into account the social (71.25%) and environmental (82.33%) implications of decisions in a higher proportion than the average of middle income countries and the GEM average. A significant proportion of the experienced entrepreneurs (67.98%) consider that the social and/ or environmental impact must be placed before the criterion of profitability or business development.”

 

Point 7: While the paper concludes with general suggestions, a more detailed discussion on practical applications for businesses and policymakers would add value. The impact of broader economic and policy changes on funding sources and sustainability could be explored.

 

Response: LINES:  1068-1088.

We added the following:

“The comprehensive analysis of the literature also led to a series of practical implications for the SME managers, regarding the funding sources. It was found that the integrated strategic thinking such as the choice of the most suitable funding sources to support practices regarding operational and economic organizational sustainability, risk management regarding the costs associated with financing, combining several internal and external funding sources and resorting to innovative funding sources can cause changes in business development.

In order to achieve organizational operational and economic sustainability, companies must evaluate and improve their corporate competencies, assess their level of knowledge of different funding sources, innovative financial technologies and their impact on sustainability. Also, organizations must improve adaptability and flexibility by restructuring existing business models and processes [2]. This involves the use of new strategies and the use of advanced technology to add value and stability to the business, flexibility and agility in calling on the various funding sources existing at the level of the economy with an impact on environmental and social actions in order to ensure and maintain their performance.

The study gave birth to practical implications for the national economy as well, since sustainability strategies at the micro level have an effect on economic well-being and the adoption of decisions regarding the recovery and resilience mechanism so that economies become more sustainable, more resilient and better prepared for the green transition and the digital one.”

 

The article has been grammatically revised, and English has been improved. We revised all the sentences.

We genuinely appreciate your expertise and input, which have been immensely beneficial in refining our study. Your suggestions have prompted us to re-evaluate and enhance our approach, ultimately strengthening the robustness of our findings.

 

Thank you once again for your invaluable feedback.

 

Thank you for your contribution to this manuscript.

Sincerely yours,

The Authors

 

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

Great job!

Author Response

Dear Reviewer #1,

 

We would like to extend our sincere appreciation for your feedback and your considerable contribution to our work.  We want to express our gratitude for your help and support.

 

Please find our response as follows:

 

Point 1: Great job!

 

Response:

We would like to say a special thank you for your very constructive contribution to our article. We really appreciate your help and value your support.

 

Thank you for your contribution to this manuscript and please accept the assurance of our highest consideration and our deepest gratitude.

 

We look forward to hearing from you again soon.

 

Yours sincerely,

 

The Authors

Reviewer 2 Report

Comments and Suggestions for Authors

My comments are addressed at a satisfactory level. 

Author Response

Dear Reviewer #2,

 

We would like to extend our sincere appreciation for your feedback and your considerable contribution to our work

 

Please find our response as follows:

 

Point 1: My comments are addressed at a satisfactory level.

 

Response:

We greatly appreciate your feedback that contributed to the improvement of our study. We really appreciate your help and value your support.

 

Thank you for your contribution to this manuscript and please accept the assurance of our highest consideration and our deepest gratitude.

 

We look forward to hearing from you again soon.

 

Yours sincerely,

 

The Authors

 

Author Response File: Author Response.pdf

Reviewer 3 Report

Comments and Suggestions for Authors

The paper was improved however i advise to fix the following:

1. in the lines 70 to 80 the gaps specified include some irrelevant details , in this section no need to list the exact sample of other studies, so make the section more concise.

2. in the methods you write about creating and using a questionnaire in section 3.1? What are the sources of scales, are there any, did you develop it yourself , how, items? Is it that part what you describe in 3.4? If yes, you need to merge questionnair development , and measures section, and exclude redundant info- Was literature enhanced with suggested studies?

3. Overall the paper is comprehensive but the number of figures and tables negatively impact the readability. Some tables can be merged into one, such as demographics (table 1,2,3,) , and some tables can be excluded if you already write about it in the paper (table 3,7). Others manage accordingly. For academic audience the results need to be presented in a more concise manner. 

Overall paper needs better editing and making some parts concise, and excluding redundant parts, merging.

Comments on the Quality of English Language

minor improvements

Author Response

Dear Reviewer #3,

 

We extend our sincere appreciation for the constructive feedback you have provided us. Your insightful comments have been instrumental in identifying areas for enhancement in our manuscript.

Please find below our response:

 

Point 1: The paper was improved however i advise to fix the following: 1. in the lines 70 to 80 the gaps specified include some irrelevant details, in this section no need to list the exact sample of other studies, so make the section more concise.

 

Response: LINES:  73-81.

Thank you for your feedback. We have modified the text, as follows:

“In their minute analysis of the specialised literature, the authors identified studies on the funding sources, sustainability and performance of companies, but each of them analysed the terms separately [8-10]. The authors of the paper searched the Web of Science Core Collection database for the three terms (sources of funding, sustainability, company performance). Filtering the results by Keyword Plus, no result was displayed; filtering by Topic, only 26 results were displayed, but these analyse specific topics (such as: supply chain, food industry, etc.). The identified gap starts from combining the study of the previously mentioned three concepts, at the level of SMEs, which are extremely important in the current context.”

 

Point 2: In the methods you write about creating and using a questionnaire in section 3.1? What are the sources of scales, are there any, did you develop it yourself, how, items? Is it that part what you describe in 3.4? If yes, you need to merge questionnair development, and measures section, and exclude redundant info- Was literature enhanced with suggested studies?

 

Response: LINES:  381-385.

In section 3.1 we highlight the development of the questionnaire, and we thank you for your feedback. We added the types of scales used. The questionnaire was developed by the authors of the paper, and the specialised literature recommended in the previous review has already been included in the paper.

Section 3.4 presents the characteristics of the researched population, being a separate topic, different from the creation of the questionnaire. That is why we considered it necessary to separate it into two subsections. However, thank you very much for the recommendation. We added the following:

“The questionnaire was developed by the authors, and in order to better measure the researched characteristics, several types of scales were used. The nominal scale is used with the possibility of simple choice, multiple one, but also the binary scale. There are also questions with a numerical measurement scale as well as a Likert scale (to find out the opinions of the subjects regarding certain statements).”

 

Point 3: Overall the paper is comprehensive but the number of figures and tables negatively impact the readability. Some tables can be merged into one, such as demographics (table 1,2,3,) , and some tables can be excluded if you already write about it in the paper (table 3,7). Others manage accordingly. For academic audience the results need to be presented in a more concise manner.

 

Response:

We really appreciate your suggestion. Consequently, we merged Table 2 with Table 3 into a single table and completely deleted Table 4 and Table 7, respectively. Then, of course, we renumbered the remaining tables in the work. Through this action, we reduced the number of tables to 9 in the paper.

Point 4: Overall paper needs better editing and making some parts concise, and excluding redundant parts, merging.

 

Response: LINES:  329-330; 493-497, 591-597.

Thank you very much for your observation. In order to answer this feedback as well as possible, we deleted some paragraphs (some examples are the lines: 329-330; 493-497, 591-597), we merged the information where possible and we tried, as much as possible, to edit the work in a form as concise as possible. Just for example, we deleted the following:

“Numerous studies demonstrate that sustainable financing has an impact on the implementation of sustainable development objective.”

 

“It can be noted that in the year 2021, the turnover shows a slight increase, which is justified in the context of the existence of strategies for the recovery of companies after the pandemic. However, this increase is insufficient to support sustainable development. Therefore, there is a need to supplement financial resources from other funding sources.”

 

“However, any action of technological advancement and sustainable innovation in the activity requires additional funding sources. Furthermore, small companies face challenges related to the lack of financial knowledge, issues related to tax regulations, and access to potential support forms available at different stages of the innovation process [121]. In this context, financial and tax consultancy is needed, which companies should turn to in order to implement the sustainability program they have developed.”

 

 

The article has been grammatically revised once again, and English has been improved. We revised all the sentences.

 

We genuinely appreciate your expertise and input, which have been immensely beneficial in refining our study. Your suggestions have prompted us to re-evaluate and enhance our paper.

 

We really appreciate your help and value your support.

 

Thank you for your contribution to this manuscript and please accept the assurance of our highest consideration and our deepest gratitude.

 

We look forward to hearing from you again soon.

 

Yours sincerely,

 

The Authors

Author Response File: Author Response.pdf