This study aims to examine the effect of the circular economy on the financial performance of Micro, Small and Medium Enterprises (MSMEs), and explore the role of green entrepreneurial orientation as a moderating variable. This study used a quantitative approach with a survey method of 250 carica fruit processing MSMEs in Wonosobo Regency. Data were collected through questionnaires and analyzed using linear regression and moderated regression analysis (MRA). The results showed that the circular economy has a positive and significant influence on the financial performance of MSMEs. This finding suggests that environmentally friendly practices such as resource efficiency, recycling, and waste reduction can improve business performance. In addition, the analysis also proved that green entrepreneurial orientation strengthens the relationship between circular economy and financial performance. MSMEs with high green entrepreneurial orientation are able to maximize the positive impact of circular economy implementation through green innovation and proactive attitude towards sustainability. This research provides practical contributions for MSME owners and policy makers in strategizing sustainable business development. The implications of the results emphasize the importance of strengthening green entrepreneurship capacity in supporting the transition to a more sustainable economic model.
Wulandari et al. (Wed,) studied this question.