*5.1. Theoretical Significance*

First, this study reveals that transformational leadership is an essential factor that effectively contributes to ESG performance, which is a valuable addition to previous research. Contemporary leadership approaches, in terms of their uniqueness and importance, have been increasingly studied by both academics and practitioners. Prior research on specific contemporary theories of transformational leadership has generally been on the implementation of the theory and its relationship with organizational citizenship behavior or firm performance [137–139]. This study is considered a significant contributor to the present literature, since it provides a perspective on the effects of leadership theories on ESG performance, in an area of scarce empirical research [140].

Second, this study enriches knowledge of the antecedents of ESG performance in SMEs. Most existing studies examined ESG performance as an influencing factor and explored its effects on corporate financing costs and financial performance; this research focus highlights the importance of corporate ESG performance, but there is no focus on ESG performance as a dependent variable. However, this paper explores corporate ESG performance as a dependent variable and looks into ways to improve ESG management. In addition, most studies only focus on one aspect of environmental performance, corporate social responsibility, or corporate governance, rarely combining these three aspects to examine corporate performance. By doing so, this study provides new perspectives and valuable directions.

Third, this study explores the internal mechanisms of transformational leadership and ESG performance in SMEs, thus opening the black box concerning the connections between transformational leadership and ESG performance in SMEs. To more fully reveal how transformational leadership affects ESG performance in SMEs, this paper provides a new perspective and theoretical model for the study of corporate ESG performance, constructs a model of leadership traits–organizational mechanisms–corporate ESG performance, clarifies the role of transformational leadership in influencing corporate ESG performance, remedies the shortcomings of previous studies, and provides a new reference for enhancing corporate strategic management theory. In short, it provides a new referential basis for deepening the theory of corporate strategic management.

Finally, this study introduces external social capital into the model, explores the impact and conditions of transformational leadership on organizational innovation, and establishes a mediating-effect model that is moderated to reveal the positive interaction effects of transformational leadership and external social capital on corporate ESG performance, thus changing the single model used in previous studies on factors affecting organizational innovation.
