The sustainability of small and medium industries (SMEs) in Bali faces challenges from economic pressures, market dynamics, and limited managerial capacity. To address this issue, this study examines the influence of financial decisions—namely investment decisions (ID) and financing decisions (FD)—on business sustainability (BS), with financial performance (FP) as a mediating variable and the local cultural values of Catur Paramitha (CP) as a moderating variable, within the framework of stakeholder theory. Catur Paramitha, rooted in Balinese spiritual values, is expected to shape managerial behavior and strengthen sustainable business practices. The research involved 120 SMEs in Bali that have obtained business legality through the deconcentration fund of the Directorate General of SMEs. Data were analyzed using the Structural Equation Model (SEM). The results show that ID and FP have a positive and significant impact on BS, while FD do not directly influence sustainability. However, FP mediates the effects of both investment and FD on sustainability, highlighting its central role. Furthermore, the culture of CP strengthens these relationships, underscoring the importance of integrating local wisdom into business practices. The study enhances stakeholder theory by integrating culture into financial decisions, aiding SMEs and policymakers in sustainable strategy development.
P et al. (Thu,) studied this question.