Green Human Resource Management and Sustainability Performance in Micro, Small, and Medium Enterprises: The Moderating Role of Government Support and Green Innovation Capacity

Abstract

This study investigated the moderating role of Government Support and Green Innovation Capacity between the Green Human Resource Management (GHRM) and Sustainability Performance of Micro, Small and Medium Enterprises (MSMEs). The study employed a quantitative, cross-sectional research type and primary data were gathered for this study from 312 MSMEs owners/managers with a structured questionnaire. The techniques used in the sampling included convenience sampling and the analysis of the data was done under SPSS Version 27. To test the suggested relationships between the variables, descriptive statistics, reliability analysis, Pearson correlation, multiple regression, and moderation analysis were used. The internal consistency reliability analysis revealed high level of internal consistency ranging from 0.864–0.907 for Cronbach's alpha. The results of the Pearson correlation analysis showed that all study variables were related to each other, and significant positive correlations were found among these variables, with the highest correlation between Green Human Resource Management and sustainability performance at 0.742 (p < 0.001). Multiple regression analysis showed that Green Human Resource Management was a significant predictor of sustainability performance (β = 0.742, t = 19.377, p < 0.001) with an explanatory power of 55.1% (R² = 0.551) of the total sustainability performance. A moderation analysis also showed that the positive relationship between both constructs became stronger when green innovation capacity was high, and when government support was high. The results indicated that HRM practices with environmental focus along with support from institutional services and the innovation capacity improved the environmental, social and economic performance of MSMEs. The study adds to the research and literature on sustainable management because it empirically demonstrates the importance of green human resource strategies in combination with external institutional support and innovation in business practice to advance sustainable management and competitive advantage in the long run.

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