DETERMINANTS OF ECONOMIC PERFORMANCE ON SMALL MEDIUM ENTERPRISE

Abstract

Purpose: In the world of business fields at this time the competition in the field of business that is tried has become increasingly competitive. It is none other than the SME players in Indonesia who are facing many failures and do not pay attention to how the business economy can run normally. They business owners only center on profit figures and the budget spent to carry out their business operations. The purpose of this study is to examine the effect of green innovation, green supply chain management and organizational learning on economic performance in Troso teun ikat SMEs.

Methodology/approach: The approach in this research uses quantitative with a sample of 174 respondents who are determined through purposive sampling procedures with a benchmark length of business above 1 year. This procedure was used by distributing questionnaires in the form of problems to Troso ikat weaving entrepreneurs. The information obtained was then analyzed using SEM based on Partial Least Squares (PLS) 3. 0.

Results/findings: The research results prove that green innovation, green supply chain management and organizational learning have an important positive effect on economic performance. The results prove the participation that the combination of green innovation, sustainable supply chain management, and organizational learning can provide a significant boost to the economic performance of MSMEs, especially Troso ikat weaving by creating added value through more efficient, environmentally friendly and sustainable practices.

Limitations: The limitation of the research is the absence of a comprehensive association of torso ikat weaving entrepreneurs which requires researchers when distributing questionnaires to visit one-on-one which requires a long time.

Contribution: The results of this research are expected to share participation in SME actors, especially Troso ikat weaving, to improve economic performance by maximizing environmentally friendly and sustainable practices.

Novelty: The novelty of the research lies in the research model, which used to examine variables separately can now be combined into one comprehensive model.