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This paper investigates the relationship between business strategy and sustainability of Chinese SMEs and how the environmental uncertainty may affect this relationship. It analyses the impact of active and passive business strategies on firms’ sustainability and tests the potential moderating role of economic policy uncertainty in this relationship. The empirical analysis is performed by employing fixed-effect and GMM estimations on data collected from 937 Chinese A-share non-financial companies listed on the Shanghai and Shenzhen stock exchanges from 2010 to 2021. The results show that the high-risk active business strategy of innovation and new market development is associated with greater business sustainability, and this relationship is stronger for SMEs than for non-SMEs in China. Moreover, higher economic policy uncertainty strengthens the positive relationship between active business strategy and firm sustainability, implying that in periods of higher environmental uncertainty firms which pursue active business strategy achieve greater business sustainability. These findings are useful for devising business strategy and can assist in formulating policy initiatives seeking to ensure sustainable development of SMEs in China.

This study uses the data of A-share listed family firms during the period 2010-18 and employs multiple regression analysis to verify the role of family control and working capital strategy for corporate risk-taking in China. This study also explores the regulatory role of family control in the relationship between working capital strategy and corporate risk-taking of Chinese listed family firms. Results show that greater family control encourages risk-taking behavior in Chinese firms whereas conservative working capital strategy diminishes corporate risk-taking. The results also suggest a regulatory role for family control on the effects of working capital strategy for family firms’ risk-taking behavior. Strong family control weakens the negative association between working capital conservatism and corporate risk-taking. This study’s findings may help managers of family firms to adjust risk-taking behavior in response to changing working capital strategy. The results are robust to different measures of corporate risk-taking and working capital strategy