Abstract
<title>Abstract</title> <p>Small and medium enterprises (SMEs) anchor employment and output in emerging economies, yet the mechanisms through which their adaptive capabilities translate into sustainable performance remain contested. Prior research frequently reports that the effect of strategic agility on performance is fully absorbed by relational mediators, but such findings are vulnerable to shared response formats and single-method designs. Drawing on the dynamic capabilities view, social capital theory, and the relational view, this study models strategic agility as influencing sustainable SME performance through two pathways: a direct capability pathway and an indirect relational pathway operating through managerial ties with buyers, suppliers, and government officials. Sustainable performance is conceptualised along triple-bottom-line dimensions covering economic, social, and environmental outcomes. Survey data were collected from SME owners and managers in the Greater Bandung region of Indonesia using an instrument designed to attenuate common method variance through differentiated scale anchors, embedded attention checks, and a theoretically unrelated marker variable; the final analysis sample comprised 179 responses. Partial least squares structural equation modelling with 5,000 bootstrap resamples shows that strategic agility exerts a strong direct effect on sustainable performance (β = 0.493) and a smaller but significant indirect effect through managerial ties (β = 0.080), a pattern of complementary partial mediation in which the relational channel accounts for approximately 14% of the total effect. Supplementary analysis indicates that strategic decision speed aligns positively with agility yet adds no incremental explanatory power. The findings suggest that agility is a proximate driver of SME sustainability that relational resources amplify rather than fully transmit, with implications for Sustainable Development Goals 8 and 9.</p>