Enhancing sustainable business performance through green entrepreneurial orientation in circular economy food SMEs

Type of the article: Research ArticleAbstractFood SMEs in emerging markets face increasing environmental pressures and regulatory demands, requiring them to achieve sustainable business performance within the circular economy. This paper aims to investigate the influence of green entrepreneurial orientation toward sustainable business performance as mediated by green innovation and green marketing strategies, and environmental regulation and environmental consciousness as moderators, using food industry SMEs in Riau, Indonesia, as the context of analysis. Quantitative explanatory research design was employed wherein a structured questionnaire was administered to 225 SMEs practicing circular economy in urban, mainland, and coastal regions. Data were collected in April–June 2024, and SEM-PLS were employed for analysis. Results indicate that green entrepreneurial orientation directly (β = 0.209; p < 0.001) and indirectly through green innovation (β = 0.416; p < 0.001) increases sustainable business performance significantly, while green marketing strategies have no significant impact. The effect of green entrepreneurial orientation on sustainable business performance is positively moderated by environmental regulation (β = 0.136; p < 0.001) and negatively by environmental consciousness (β = −0.042; p < 0.05). The implications of the results suggest that innovation plays a pivotal role in transforming green entrepreneurial orientation into sustainability outcomes, and regulatory support is crucial.