A Conceptual Model for Enhancing Sustainable Performance: The Synergy Of Green Innovation Based on Green Skills and Green Creative Self-Efficacy in Metalcraft MSMES

Metalcraft micro, small, and medium enterprises (MSMEs) in Bali contribute to the island’s craft economy, yet their transition to environmentally responsible production may be constrained by limited technical resources and uneven environmental capabilities. Although recent MSME studies associate green innovation with business performance, findings concerning environmental performance remain mixed, and previous studies rarely examine owners’ green skills and green creative self-efficacy together in traditional metalcraft enterprises. This study tests the effects of Green Skill and Green Creative Self-Efficacy on Sustainable Performance, with Green Innovation as a mediator, and identifies managerial priorities through Importance-Performance Map Analysis (IPMA). Survey data were obtained from 259 owners of metalcraft MSMEs in Bali Province using proportionate stratified random sampling and analyzed with PLS-SEM in SmartPLS 4. The estimated relationships are positive and statistically significant, and Green Innovation partially mediates the relationships between both capability constructs and Sustainable Performance. Green Creative Self-Efficacy has numerically larger path coefficients than Green Skill for Green Innovation and Sustainable Performance; this coefficient ordering is interpreted descriptively because a formal between-coefficient difference test was not reported. IPMA identifies environmental awareness and pollution-control facility deployment as specific improvement priorities. The study extends MSME sustainability research by linking an individual-level cognitive capability with operational innovation in a traditional craft setting. For practice, the results support combining practical green-skills training with confidence-building problem-solving activities and affordable, context-appropriate pollution-control and waste-management measures.