Tax Ethics, Sustainability Education, and Entrepreneurial Orientation: An Islamic Economic Perspective from an Emerging Economy

Abstract

Entrepreneurship is central to sustainable economic development in emerging economies; however, ethical challenges related to taxation and sustainability remain prevalent. Grounded in Islamic economic principles, including adl (justice), amanah (trust), and maslahah (public interest), this study investigates the effects of tax ethics and sustainability education on entrepreneurial orientation among university students in an emerging economy. Adopting a survey-based research design, data were collected from undergraduate and postgraduate students enrolled in business and entrepreneurship programs at public and private universities in Pakistan. Partial Least Squares Structural Equation Modelling was employed using SmartPLS software to examine the proposed relationships and mediation effects. The findings reveal that tax ethics have a positive and significant influence on entrepreneurial orientation, reflected through enhanced innovativeness, proactiveness, and risk-taking tendencies. Sustainability education also demonstrates a direct positive effect on entrepreneurial orientation and partially mediates the relationship between tax ethics and entrepreneurial orientation. The results underscore the importance of Islamic ethical values in shaping responsible and sustainability-oriented entrepreneurial mindsets. This study contributes to the literature by integrating tax ethics and sustainability education within an Islamic economic framework and offers policy implications for strengthening ethically grounded entrepreneurship education in emerging economies.