Antecedents of green manufacturing implementation by local MSMEs in Indonesia

Abstract

This study aims to investigate the adoption of green manufacturing in the micro, small, and medium enterprises in Indonesia using the integrated framework. The paper used purposive sampling to select 258 micro, small, and medium enterprises in Indonesia that adopt green production processes to determine the supporting and inhibiting factors experienced in green manufacturing. Structural equation modeling with SmartPLS 3.0 application is used for data processing. The results show that the internal factors (organizational capabilities, internal competencies development, relative advantage, and organizational resources) affect green manufacturing implementation. This indicates that micro, small, and medium enterprises in Indonesia tend to adopt green manufacturing when they have organizational capabilities, internal competencies development, relative advantage, and organizational resources that support this practice. External factors that influence green manufacturing practices are government support. Indonesian micro, small, and medium enterprises consider that government support in the form of subsidies or regulations related to green practices will make it easier to adopt green manufacturing. AcknowledgmentThis study is funded by the Ministry of Education, Culture, Research and Technology of the Republic of Indonesia (Kementerian Pendidikan, Kebudayaan, Riset dan Teknologi Republik Indonesia). The scheme of the grant is Fundamental Research entitled “Implementasi Green Manufacturing dan Dampaknya pada Kinerja UMKM Industri Kerajinan Lokal dalam Rangka Pengentasan Kemiskinan di Indonesia”).