The mediating role of green business strategy for the relationship between environmental and marketing performance in SMEs

Type of the article: Research articleAbstractSMEs in East Java, Indonesia, play a crucial role in supporting the national economy, yet they continue to face significant obstacles in the context of global competition. Key challenges include limited access to financial capital, suboptimal adoption of green business strategies and technology, low awareness regarding environmental performance in business operations, and the need for human resource development. Furthermore, a substantial number of SMEs operate informally, which restricts their ability to access policy support and broader markets. This study aims to examine the mediating effect of green business strategy on the relationship between environmental performance and the marketing performance of SMEs. The analysis was conducted with 103 randomly selected batik SME entrepreneurs in East Java. A quantitative approach was employed, involving structured surveys and data analysis using the SEM-PLS technique. The empirical findings reveal that environmental performance has a significant positive impact on green business strategy (significance value p = 0.000***), and green business strategy, in turn, positively affects the marketing performance of SMEs (p = 0.003***). Additionally, environmental performance also directly contributes significantly to SME marketing performance (p = 0.001***). Indirectly, green business strategy is proven to mediate the relationship between environmental performance and SME marketing performance (p = 0.004***). These results indicate that environmental performance not only directly influences SME marketing performance but also exerts an indirect effect by strengthening green business strategies.AcknowledgmentWe acknowledge the invaluable support and resources provided by the leadership of Wijaya Putra University Surabaya, which were instrumental throughout the research. Furthermore, sincere gratitude is expressed to all individuals who contributed directly or indirectly, offering assistance and time that significantly facilitated the successful completion of this study.