The Impact of Workplace Green Behavior and Green Innovation on Green Performance of SMEs: A Case Study in Indonesia

Environmental concern has become the focus of various studies, academic research, company policies, and government policies. A business sector, which has seen a high level of urgency in environmental empowerment are small- and medium-sized enterprises (SMEs). These are an economic sector, which is imbedded in society and has become one of the largest economic sectors in Indonesia. Therefore, this study analyzes the relationship between green human resource management (GHRM), workplace green behavior (WGB) and green innovation (GI), and increasing firm performance (FP). This study is using quantitative research methods. The data is obtained through distributing questionnaires to 180 culinary SMEs employees from cafes and modern food restaurant in the Special Region of Yogyakarta (DIY), Indonesia. The data is then analyzed using Structural Equation Modeling (SEM) with Smart-PLS. The results of this study show that GHRM has significant positive effect on workplace green behavior and firm performance, while workplace green behavior also has significant positive effect on green innovation and firm performance. In addition, green innovation has significant positive effect on firm performance. This study contributes to provide and extends the literature related to building green SMEs, which is empirically demonstrated to be able to improve company performance.