Author(s): Rice Haryati, Yasri Yasri, Hasdi Aimon, Muhammad Darwin
This research aims to know the development of innovation can affect environmental sustainability in the performance of sustainable Micro Small Enterprises. In addition to knowing the influence of innovation, this study will also answer how much direct result of innovation on environmental sustainability in developing sustainable Micro Small Business performance. Because this study using intervening variables will answer how much influence the intervening variable mediates between variables. This study used the Structural Equation Modeling analysis method using Amos 2.2 software on a sample of 190 respondents. The analysis results resulted in product innovation, process, and marketing having a significant positive effect on the development of sustainable SME performance. The magnitude of each hypothesis's value indicates that the CR and P-value values are already at the specified limit. The influence of Environmental Sustainability as a mediation variable can mediate between process and product innovations on SMEs' performance by 100% (full mediation) and 70% (partial mediation) between marketing innovations to the implementation of SMEs. Product innovation, process, and marketing are not necessarily for-profit purposes but must pay more attention to the environment in determining the innovation strategy implemented so that the development of SMEs in West Sumatra can be developed and sustainable.