The Mediating Role of Competitive Advantage in the Relationship Between Green Products and the Performance of Batik MSMEs
Destiana, Dwi Rahmawati, Husna Putri Pertiwi

Universitas Terbuka

Abstract

Batik, recognized by UNESCO as a cultural heritage of Indonesia, possesses both aesthetic and symbolic significance while also serving a crucial economic function, especially through micro, small, and medium enterprises (MSMEs). Conventional batik production methods that utilize toxic chemicals and inadequately manage waste disposal pose significant environmental issues. The green product concept has arisen as a sustainable solution including three dimensions: green input, green process, and green output. This study seeks to examine the impact of these three aspects on MSME performance, utilizing competitive advantage as a mediating variable. The study utilized a quantitative approach through Partial Least Squares-Structural Equation Modeling (PLS-SEM). Data were gathered from 39 batik MSMEs situated in Solo, Bandar Lampung, and Serang via surveys employing a five-point Likert scale. Respondents consisted of business owners and employees who were directly involved in production and management. The results show that green process and green output have a significant effect on both competitive advantage and MSME performance, while green input does not show a significant effect. Furthermore, competitive advantage is proven to have a strong positive impact on MSME performance. These findings suggest that while environmentally friendly raw materials are important, consumers place greater emphasis on visible product attributes such as quality, durability, eco-labels, and official certifications. Therefore, batik MSMEs need to integrate sustainable practices not only in inputs but also in processes and outputs to improve competitiveness, customer trust, and long-term business sustainability.

Keywords: green product, competitive advantage, MSME performance, batik, sustainability

Topic: Business Transformation in the Digital Era