THE MEDIATING ROLE OF GREEN INNOVATION IN THE RELATIONSHIP BETWEEN GREEN MARKETING STRATEGY, GREEN SUPPLY CHAIN MANAGEMENT, AND BUSINESS PERFORMANCE: EVIDENCE FROM BATAM MSMEs

Abstract

This research explores the function of Green Innovation (GI) as a mediator linking Green Marketing Strategy (GMS) and Green Supply Chain Management (GSCM) to Business Performance (BP) within MSMEs in Batam City. To resolve inconsistent empirical findings across various sectors, a quantitative approach was employed, surveying 45 purposively chosen operators from the food and beverage, handicraft, and agribusiness industries. Data evaluated through SEM-PLS using SmartPLS 4.0 indicate that both GMS and GSCM exert a positive influence on GI and BP. Furthermore, GI directly drives BP and functions as a partial mediator in the relationships between the two green strategies and firm performance. Theoretically, this study enriches the Natural Resource-Based View (NRBV) framework by illustrating GI's capacity to bridge environmental initiatives with measurable outcomes. Practically, it equips policymakers and MSME owners with actionable strategies to build sustainable competitive advantages through formalized green innovation.