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The role of environmental commitment and green creativity on business performance mediated by circular economy implementation

Author

Listed:
  • Ayu Widhiastuti

    (Master of Management Study Program, Business and Economics Faculty, Indonesian Islamic University, Yogyakarta, Indonesia)

  • Muafi Muafi

    (Department of Management, Business and Economics Faculty, Universitas Islam Indonesia, Yogyakarta, Indonesia)

Abstract

This study aims to examine and analyze the influence of green creativity and environmental commitment on business performance by considering the mediating influence of circular economy implementation in batik craft small and medium industries in Sleman Regency. This study is carried out using a quantitative method, with several samples of 120 respondents, the owner or manager of the natural dye batik crafts enterprise in Sleman Regency. The sampling technique is using a non-probability sampling technique. The data is collected by distributing questionnaires electronically. The research variables used in this study are green creativity and environmental commitment as the exogenous variable, business performance as the endogenous variable, and circular economy implementation as mediating variable. The data analysis is carried out using Partial Least Square (PLS) with the software of SmartPLS 3.0. The results of this study show that: (1) Green creativity has a significant favorable influence on the business performance of batik craft SMEs in Sleman Regency; (2) Environmental commitment has a significant positive influence on circular economy implementation; (3) Circular economy implementation has a significant positive influence on business performance, and (4) Circular economy implementation is not proven as mediating variable in the relationship of environmental commitment and business performance in batik craft SMEs in Sleman Regency. This study provides suggestions for batik owners to increase the creation of product samples for customers by utilizing virtual services to reduce the exploitation of natural resources. Further research is required at different times since this study is carried out during the Covid-19 pandemic.

Suggested Citation

  • Ayu Widhiastuti & Muafi Muafi, 2022. "The role of environmental commitment and green creativity on business performance mediated by circular economy implementation," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 4(4), pages 96-107, October.
    • Handle: RePEc:adi:ijbess:v:4:y:2022:i:4:p:96-107
    DOI: 10.36096/ijbes.v4i4.355
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    References listed on IDEAS

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    1. Ilija Moric & Jelena Šaković Jovanović & Rajka Đoković & Sanja Peković & Đurđica Perović, 2020. "The Effect of Phases of the Adoption of the Circular Economy on Firm Performance: Evidence from 28 EU Countries," Sustainability, MDPI, vol. 12(6), pages 1-12, March.
    2. Yu-Shan Chen & Ching-Hsun Chang, 2013. "The Determinants of Green Product Development Performance: Green Dynamic Capabilities, Green Transformational Leadership, and Green Creativity," Journal of Business Ethics, Springer, vol. 116(1), pages 107-119, August.
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    Cited by:

    1. Retno Purwani Setyaningrum & Muamar Nur Kholid & Priyo Susilo, 2023. "Sustainable SMEs Performance and Green Competitive Advantage: The Role of Green Creativity, Business Independence and Green IT Empowerment," Sustainability, MDPI, vol. 15(15), pages 1-14, August.

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