Beyond Green Innovation: Reconsidering How Entrepreneurial Orientation Creates Sustainability Performance
DOI:
https://doi.org/10.65440/jaa.v3i1.268Keywords:
Enterpreneurial Orientation, Green Innovation, Sustainability Performance, SMEsAbstract
Purpose – This study aims to explore the relationship between Entrepreneurial Orientation (EO) and Sustainability Performance (SP) in Indonesian small and medium-sized enterprises (SMEs) and to examine whether Green Innovation (GI) serves as an intermediary between EO and sustainability performance. Based on Dynamic Capability Theory, the study investigates the possibility of developing an EO as a sustainability outcome through GI.
Design/methodology/approach – This study used a quantitative research method and questionnaires, with 120 SMEs as respondents in Indonesia. The data were gathered through a structured questionnaire and analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) to examine the direct and indirect relationships among EO, GI, and sustainability performance.
Findings – The results indicate that EO positively affects GI and sustainability performance. Nevertheless, the improvement in SP attributable to GI is not significant, and there is no mediating effect of EO on sustainability performance. These results show an innovation-performance gap, indicating the potential of SMEs to produce GI but not necessarily sustainability outcomes.
Research limitations/implications – The study contributes to the field of research on Dynamic Capability Theory by differentiating between innovation generation and innovation realisation. However, the speed at which sustainability value is required from GI requires greater organisational transformation and integration to foster an EO.
JEL : L26, O32, Q55, Q56
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