Based on the Resource-Based View theory (RBV), this research aims to examine the influence of the relationship between green transformational leadership on the performance of Micro, Small, and Medium Enterprises (MSMEs) which is mediated by environmentally friendly product innovation. This research uses a survey. Research population of Batik MSME owners, Sragen Regency, Indonesia. Convenience sampling was used with a total of 100 sample. Data analysis using PLS-SEM. The research results show that green transformational leadership has a significant effect on the performance of MSMEs. Green transformational leadership has a significant effect on environmentally friendly product innovation. Environmentally friendly product innovation has a significant effect on the performance of MSMEs. The mediation results show that the relationship between green transformational leadership and MSME performance is mediated by green product innovation and has a significant effect. This study highlights green product innovation as a key mediator between green transformational leadership and MSME performance, supporting the RBV framework. The study offers practical insights to align cultural preservation with sustainable business practices. This study is limited as it focuses on batik MSMEs in Sragen and the research design is cross-sectional, limiting generalizability and long-term insights. This study offers important insights and a unique contribution to addressing research gaps, particularly in heritage-based industries.
Purnomo et al. (Sat,) studied this question.
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