THE ROLE OF GREEN ECONOMY IN ENHANCING MSME RESILIENCE: A STRATEGIC MANAGEMENT PERSPECTIVE
Keywords:
Green Economy, MSME Resilience, Strategic Management, Digital Transformation, Green Process InnovationAbstract
Micro, Small, and Medium Enterprises (MSMEs) face unprecedented challenges from economic disruptions, environmental volatility, and geo-economic fragmentation (Aiyar et al., 2023; Rasul et al., 2021). This study investigates the role of Green Economy (GE) principles as a strategic management tool to enhance MSME resilience. A quantitative approach was employed, surveying 250 MSME owners/managers across the manufacturing and services sectors. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to test the proposed model linking green process innovation, digital transformation, stakeholder integration, and perceived environmental volatility to resilience through GE adoption. The results indicate that green process innovation (β = 0.42, p < 0.001) and digital transformation (β = 0.38, p < 0.001) are significant direct antecedents of GE adoption. Furthermore, GE adoption strongly mediates the relationship between these strategic capabilities and organizational resilience (β = 0.51, p < 0.001). Interestingly, perceived environmental volatility positively moderates the link between Corporate Social Responsibility (CSR) orientation and GE adoption, suggesting that external pressures amplify the strategic value of green initiatives (Achi et al., 2021). The discussion integrates these findings within the strategic management literature, arguing that GE is not merely an environmental compliance issue but a core strategic framework for building adaptive and sustainable competitive advantage. The study concludes that integrating digital tools, innovative green processes, and stakeholder engagement under a GE paradigm is crucial for MSMEs to navigate contemporary volatilities. Practical implications for policymakers and MSME managers are provided, alongside limitations and future research directions.
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