Strategic green entrepreneurship for business sustainability of Batik SMEs in Indonesia: the role of knowledge and ambidextrous innovation

Abstract

Batik SMEs in today’s highly competitive landscape encounter numerous obstacles concerning their sustainability. This study employs an approach that integrates green knowledge management (GKM) and ambidextrous green innovation (AGI) as sequential mediating factors to investigate the link between green entrepreneurial orientation (GEO) and sustainable performance (SP). We employed an accidental-purposive sampling method to collect quantitative data, specifically selecting 401 respondents from 253 batik SMEs in Indonesia that are actively engaged in green entrepreneurship and innovation. A second-order PLS-SEM analysis yielded multiple findings. Initially, we found that GEO had an insignificant direct effect on SP. Furthermore, GKM and AGI have been established as sequential mediators in this relationship. Lastly, the dimensional analysis indicated that batik SMEs appear to prioritise exploitative green innovation over exploratory innovation. Future research should examine the relationships among these dimensions for more profound insights and investigate how AI capabilities can enhance the GKM process.