The Role of Green Innovation in Strengthening Green Economy Towards Sustainability Performance: MSMEs in Jumantono District, Karanganyar
Main Article Content
Setyaningsih*
Dhimas Ridha Arrahman
The main objective of this research is to analyze previous studies and assess the viability of companies by utilizing the triple bottom line approach, which takes into account economic, environmental, and social aspects. The expectation is that these metrics will provide an accurate representation of the present situation. The novelty of this study lies in introducing green innovation as a moderating variable that strengthens the influence of the green economy on sustainability performance. The study involved 81 MSMEs located in Jumantono District, Karanganyar. Information was gathered directly from participants through the use of survey tools. The analysis technique employed was Partial Least Squares (PLS). The research findings indicate that the application of green economy practices significantly enhances economic, environmental, and social performance. This implies that the more robust the implementation of green economy strategies, the better the outcomes in terms of business sustainability. Additionally, the study reveals that green innovation strengthens the relationship between green economy and both economic and environmental performance, serving as a reinforcing factor. However, green innovation does not exhibit a moderating effect in the relationship between green economy and social performance, suggesting that its impact in the social dimension may be limited or influenced by other variables not examined in this study. These findings suggest that green economy initiatives are effective in improving sustainability performance, particularly when supported by green innovation strategies. MSMEs are encouraged to adopt balanced economic, environmental, and social practices to enhance long-term sustainability.
Abdul-Rashid, S. H., Sakundarini, N., Raja Ghazilla, R. A., & Thurasamy, R. (2017). The impact of sustainable manufacturing practices on sustainability performance: Empirical evidence from Malaysia. International Journal of Operations & Production Management, 37(2), 182–204.
Almashhadani, M., & Almashhadani, H. A. (2023). Audit Committee Features, Sustainability Disclosure, and Corporate Performance in Charlotte Financial Service Companies. MARGINAL JOURNAL OF MANAGEMENT ACCOUNTING GENERAL FINANCE AND INTERNATIONAL ECONOMIC ISSUES, 3(1). https://doi.org/10.55047/marginal.v3i1.837
Asadi, S., Pourhashemi, S. O., Nilashi, M., Abdullah, R., Samad, S., Yadegaridehkordi, E., Aljojo, N., & Razali, N. S. (2020). Investigating influence of green innovation on sustainability performance: A case on Malaysian hotel industry. Journal of Cleaner Production, 258, 120860.
Biby, S., Asbar, Y., & Jufridar, J. (2023). The Analisys of The Green Economy Implementation on Sustainability Small and Medium Enterprise in lhokseumawe City. E-Mabis: Jurnal Ekonomi Manajemen Dan Bisnis, 24(1), 31–37.
Bock, J., & Hasenkamp, H. (2013). Innovation through Craftmanship. Management & Marketing, 8(3), 451.
Bombiak, E., & Marciniuk-Kluska, A. (2018). Green human resource management as a tool for the sustainable development of enterprises: Polish young company experience. Sustainability, 10(6), 1739.
Chaaben, N., Elleuch, Z., Hamdi, B., & Kahouli, B. (2024). Green economy performance and sustainable development achievement: empirical evidence from Saudi Arabia. Environment, Development and Sustainability, 26(1), 549–564.
Chen, Y.-S., Lai, S.-B., & Wen, C.-T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67, 331–339.
D’amato, D., & Korhonen, J. (2021). Integrating the green economy, circular economy and bioeconomy in a strategic sustainability framework. Ecological Economics, 188, 107143.
Dissanayake, N., Withanawasam, A., & Sarjoon, A. (2021). Conceptual nexuses between sustainable development and blue-green economy: An analysis of the importance of adopting blue-green economic principles in achieving sustainable development goals. Civilization, 12(6).
Dogaru, L. (2021). Green economy and green growth—Opportunities for sustainable development. Proceedings, 63(1), 70.
Elkington, J. (1994). Towards the sustainable corporation: Win-win-win business strategies for sustainable development. California Management Review, 36(2), 90–100.
Fandeli, H., Hasan, A., & Amrina, E. (2020). Model konseptual pengaruh keberlanjutan terhadap kinerja industri kecil dan menengah. Dampak, 17(1), 15–24.
Ferdiansyah, M. R. A., Andriansyah, M. R., Maretasari, A., & Yuliwindarti, Y. (2023). Penerapan Green Economy: Seberapa Hijau Ekonomi Indonesia Ditinjau dari Pertumbuhan Ekonomi, Populasi, dan Energi Terbarukan Tahun 1990–2020. Jurnal Ilmiah Penalaran Dan Penelitian Mahasiswa, 7(1).
Goyal, P., Rahman, Z., & Kazmi, A. A. (2013). Corporate sustainability performance and firm performance research: Literature review and future research agenda. Management Decision, 51(2), 361–379.
Green, K. W., & Inman, R. A. (2005). Using a just-in-time selling strategy to strengthen supply chain linkages. International Journal of Production Research, 43(16), 3437–3453. https://doi.org/10.1080/00207540500118035
Higgins, C., & Coffey, B. (2016). Improving how sustainability reports drive change: a critical discourse analysis. Journal of Cleaner Production, 136, 18–29.
Himel, T. H., Muniandy, S. L., & Rahman, A. A. (2016). The relationship between selfefficacy, feasibility and awareness towards green entrepreneurial intention. Sci. Int.(Lahore), 28(2), 2095–2103.
Javed, M., Rashid, M. A., Hussain, G., & Ali, H. Y. (2020). The effects of corporate social responsibility on corporate reputation and firm financial performance: Moderating role of responsible leadership. Corporate Social Responsibility and Environmental Management, 27(3), 1395–1409.
Koirala, S. (2019). SMEs: Key drivers of green and inclusive growth. OECD Green Growth Papers, 2019/03.
Labuschagne, C., Brent, A. C., & Van Erck, R. P. G. (2005). Assessing the sustainability performances of industries. Journal of Cleaner Production, 13(4), 373–385.
Lin, S., & Niu, H. (2018). Green consumption: E nvironmental knowledge, environmental consciousness, social norms, and purchasing behavior. Business Strategy and the Environment, 27(8), 1679–1688.
Muangmee, C., Dacko-Pikiewicz, Z., Meekaewkunchorn, N., Kassakorn, N., & Khalid, B. (2021). Green entrepreneurial orientation and green innovation in small and medium-sized enterprises (SMEs). Social Sciences, 10(4), 136.
Nuringsih, K., Nuryasman, M. N., & Rosa, J. A. (2022). Mendorong green entrepreneurial intention melalui green economy dan green entrepreneurial orientation. Jurnal Ekonomi, 27(3), 417–440.
Putra, W. E., & Utama, L. (2022). Pengaruh Green Entrepreneurial Orientation dan Green Innovation terhadap Kinerja Berkelanjutan Industri Gigi Palsu. Jurnal Manajerial Dan Kewirausahaan, 4(2), 534–545.
Quiroz-Niño, C., & Murga-Menoyo, M. Á. (2017). Social and solidarity economy, sustainable development goals, and community development: The mission of adult education & training. Sustainability, 9(12), 2164.
Reuvers, F. (2015). What is new about green innovation. University of Twente.
Roca, L. C., & Searcy, C. (2012). An analysis of indicators disclosed in corporate sustainability reports. Journal of Cleaner Production, 20(1), 103–118.
Shaw, W. H., Issa, T., Catley, B., & Muntean, D. (2017). Moral issues in business. Cengage Australia.
Tseng, M.-L., Chiu, A. S. F., & Liang, D. (2018). Sustainable consumption and production in business decision-making models. In Resources, Conservation and Recycling (Vol. 128, pp. 118–121). Elsevier.
UNEP. (2011). Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication. In Sustainable Development UN. United Nations Environment.
Utama, L., Widjaja, O. H., & Lego, Y. (2020). Pengaruh orientasi kewirausahaan terhadap keunggulan kompetitif pada UKM industri kreatif dengan kapasitas inovatif sebagai faktor mediasi dalam masa pandemik Covid-19. Jurnal Bina Manajemen, 9(1), 30–43.
Wang, C.-H. (2019). How organizational green culture influences green performance and competitive advantage: The mediating role of green innovation. Journal of Manufacturing Technology Management, 30(4), 666–683.
WCED. (1987). Report of the World Commission on Environment and Development: Our Common Future. The Brundtland Report.
Xie, X., Huo, J., & Zou, H. (2019). Green process innovation, green product innovation, and corporate financial performance: A content analysis method. Journal of Business Research. https://doi.org/10.1016/j.jbusres.2019.01.010
Yildiz Çankaya, S., & Sezen, B. (2019). Effects of green supply chain management practices on sustainability performance. Journal of Manufacturing Technology Management, 30(1), 98–121.
Yusliza, M. Y., Yong, J. Y., Tanveer, M. I., Ramayah, T., Faezah, J. N., & Muhammad, Z. (2020). A structural model of the impact of green intellectual capital on sustainable performance. Journal of Cleaner Production, 249, 119334.
Zahid, M. M., Ali, B., Ahmad, M. S., Thurasamy, R., & Amin, N. (2018). Factors affecting purchase intention and social media publicity of green products: The mediating role of concern for consequences. Corporate Social Responsibility and Environmental Management, 25(3), 225–236.
Zaid, A. A., Jaaron, A. A. M., & Bon, A. T. (2018). The impact of green human resource management and green supply chain management practices on sustainable performance: An empirical study. Journal of Cleaner Production, 204, 965–979.
Zhu, Q., & Sarkis, J. (2004). Relationships between operational practices and performance among early adopters of green supply chain management practices in Chinese manufacturing enterprises. Journal of Operations Management, 22(3), 265–289.
