The Role of Sustainability Performance to Improve Green Competitive Advantage in the Agriculture Sector Manufacturing Industry in Indonesia

Abstract

This study aimed to analyze how Sustainability Performance enhanced Green Competitive Advantage through Environmental Consciousness and Green Intellectual Capital in Indonesia's agricultural manufacturing sector. The Natural Resource-Based View (NRBV), Stakeholder, and Knowledge-Based theories were integrated to address a literature gap on this mediation mechanism in developing countries. A quantitative, explanatory causality method was adopted to collect data through surveys of 183 senior and middle managers from relevant companies listed on the Indonesia Stock Exchange. The study used a cross-sectional time horizon and individual unit of analysis, then, data were processed using Structural Equation Modeling with AMOS software. The results showed that both Environmental Consciousness and Green Intellectual Capital significantly positive influence on Sustainability Performance, thereby enhancing Green Competitive Advantage. Furthermore, Sustainability Performance fully mediated the relationships between Environmental Consciousness and Green Competitive Advantage, as well as between Green Intellectual Capital and Green Competitive Advantage. These results showed that Sustainability Performance was important for converting environmental awareness and intellectual resources into competitive advantage by improving resource efficiency, stimulating green innovation, and enhancing corporate image. This study contributes theoretically by expanding NRBV and Stakeholder theories through incorporating Sustainability Performance as a mediator. It was practically recommended that companies should internalize Environmental Consciousness through training, develop Green Intellectual Capital, and implement sustainability management systems like ISO 14001. For regulators, the results supported policies promoting ESG transparency and green practice incentives. This study also addressed global challenges, such as the EU's CBAM, showing the need to adapt to sustainability standards for the maintenance of market competitiveness.