Human Capital Readiness and Market Orientation on Business Performance: The Mediating Role of Green Innovation in Batik Ecoprint MSMEs in Yogyakarta

Abstract

This study aims to examine the effect of the relationship between human capital readiness and market orientation on business performance mediated by green innovation in 81 Ecoprint batik MSMEs in Yogyakarta City. Using census sampling technique in determining the sample and analyzed using Structural Equation Modelling-Partial Least Square (SEM-PLS) with tools using SmartPLS 4.1.1.2 software. The results of this study indicate that human capital readiness and market orientation have a significant effect on business performance, human capital readiness and market orientation have a significant effect on green innovation, and green innovation has a significant effect on business performance and mediates human capital readiness and market orientation on business performance. This research emphasizes the importance of human capital readiness and market orientation in improving MSME business performance with the role of green innovation as mediation. Future research is recommended to expand the sample to other MSME
sectors and explore additional mediating variables.

Keywords: human capital readiness; market orientation; business performance; green innovation; MSEM’s