The Influence of Green Human Resource Management and Green Innovation on Sustainable Economic Development Through MSME Performance

Abstract

This study aims to analyze the effects of Green Human Resource Management (GHRM) and Green Innovation on Sustainable Economic Development through MSME Performance as a mediating variable. The study employed a quantitative approach with an explanatory research design involving 160 MSME respondents. Data were collected using a five-point Likert-scale questionnaire and analyzed using Partial Least Squares-Structural Equation Modeling (PLS-SEM) with SmartPLS 4.0. The results show that GHRM does not have a significant effect on MSME Performance (β = 0.104; p = 0.116), whereas Green Innovation has a positive and significant effect on MSME Performance (β = 0.613; p < 0.001). GHRM has a positive and significant effect on Sustainable Economic Development (β = 0.408; p < 0.001), whereas Green Innovation does not have a significant effect (β = 0.132; p = 0.214). MSME Performance has a positive and significant effect on Sustainable Economic Development (β = 0.212; p = 0.039). MSME Performance also does not mediate the effects of GHRM (β = 0.022; p = 0.288) or Green Innovation (β = 0.130; p = 0.054) on Sustainable Economic Development. The R² value for MSME Performance is 45.3%, while the R² value for Sustainable Economic Development is 39.6%. These findings underscore the importance of Green Innovation in enhancing MSME Performance and highlight the direct role of GHRM in supporting Sustainable Economic Development.