Circular Economy Adoption: Government Funding And Business Innovation Towards Net Zero Waste And Sustainable Performance Of Msmes In Bali Province

Abstract

Business innovation through the adoption of a circular economy is an effort to increase the contribution of MSMEs in achieving sustainable performance. Still, the obstacles MSMEs face are related to the government's funding support, which is often influenced by budget politics. This study aims to analyze the adoption of a circular economy, government funding, and business innovation to achieve net-zero waste and sustainable performance among creative MSMEs in Bali Province. This type of research is quantitative, data collection using a questionnaire with a Likert scale of 1-5 and random sampling techniques. The population comprises 390 MSMEs. The research data were analyzed using Structural Equation Modeling. This research utilizes net zero waste and sustainable performance as endogenous variables, and examines circular economy, funding, and business innovation as exogenous variables. The circular economy, government budget funds, and business innovation have a positive and significant impact on sustainable performance. Net-zero waste can moderate the effect of the circular economy on sustainable performance. Still, it cannot mitigate the impact of government budget funding and business innovation on sustainable performance.