BRIDGING FAITH AND SUSTAINABILITY: THE ROLE OF ENTREPRENEURIAL RELIGIOSITY AND HALAL CERTIFICATION IN ENHANCING MSME PERFORMANCE AND SDGS CONTRIBUTION

Abstract

Purpose: A quantitative explanatory approach was employed, gathering survey data from MSMEs in food, beverage, herbal, and service sectors. Entrepreneurial religiosity, halal certification practice, MSME performance, and SDG contribution were measured using validated indicators. The hypothesized structural model was tested using Partial Least Squares–Structural Equation Modeling (PLS-SEM) to assess direct, indirect, and interaction effects. Design/Methodology/Approach: A quantitative explanatory approach was employed, gathering survey data from MSMEs in food, beverage, herbal, and service sectors. Entrepreneurial religiosity, halal certification practice, MSME performance, and SDG contribution were measured using validated indicators. The hypothesized structural model was tested using Partial Least Squares–Structural Equation Modeling (PLS-SEM) to assess direct, indirect, and interaction effects. Findings: The model shows that business challenges exert a very strong and significant effect on perceived SDG contribution (β = 0.901, p < 0.001). Entrepreneurial religiosity significantly improves business performance (β = 0.453, p < 0.001), while halal certification also enhances performance (β = 0.192, p < 0.001). However, neither religiosity nor halal certification directly influences perceived SDG contribution, and business performance itself does not significantly predict SDG perception. The tested moderating effect is also insignificant (β = –0.017, p > 0.05). Overall, SDG perception is shaped more by external business pressures than by internal capabilities such as religiosity, halal compliance, or performance. Research limitations/implications: The cross-sectional design limits the ability to capture behavioral change over time. The sample concentration in halal-oriented sectors may also limit broader generalization. Future studies could apply longitudinal models, include non-food sectors, or integrate qualitative exploration of faith-based sustainability practices. Practical implications: The study offers actionable insights for policymakers, halal agencies, and MSME empowerment institutions to integrate religiosity-oriented training, halal readiness programs, and performance enhancement strategies in a unified intervention model. Social implications: Strengthening faith-driven entrepreneurship and halal compliance fosters ethical markets, consumer protection, and socially responsible production. It also promotes MSME inclusion in national sustainability efforts aligned with SDG 1 (no poverty), SDG 3 (good health), SDG 8 (decent work and growth), and SDG 12 (responsible consumption and production). Originality/value: This research presents a novel integrative model linking entrepreneurial religiosity, halal certification, MSME performance, and SDG contribution in a single framework. It extends sustainability and Islamic entrepreneurship literature by highlighting how faith and compliance jointly reinforce sustainable enterprise growth.