South Tangerang — Entrepreneurs’ confidence in their own abilities can become an important foundation for the long-term sustainability of micro, small, and medium enterprises (MSMEs). This finding comes from research by Ade Nurdiansyah and Nia Kusuma Wardhani of Universitas Mercu Buana, Jakarta, which examined 185 culinary MSMEs in South Tangerang, Indonesia. Published in 2026, the study found that self-efficacy has a positive effect on MSME sustainability, both directly and indirectly through entrepreneurial orientation and pro-environmental behavior.
MSMEs play a major role in economic development through their contributions to economic growth, employment, and poverty reduction. However, small businesses continue to face significant challenges, including limited resources, operational instability, and difficulties in scaling their businesses.
These challenges are also visible in South Tangerang. Local government data showed that the MSME scale-up rate during 2022–2024 reached only 2.83 percent, far below the 13.5 percent target. A 2025 pre-survey also found that 62.2 percent of local culinary MSMEs consistently failed to meet their monthly sales targets. The situation indicates operational instability that can threaten business survival.
Against this background, the researchers examined whether entrepreneurs’ belief in their own capabilities could support business sustainability. Self-efficacy refers to an individual’s belief in their ability to organize and perform actions needed to achieve specific goals. For MSME owners, strong self-efficacy can help them deal with market uncertainty, solve problems, withstand economic pressures, and identify new business opportunities.
Nurdiansyah and Wardhani went beyond examining the direct relationship between self-efficacy and business sustainability. They also examined two pathways through which confidence can be translated into concrete business actions: Entrepreneurial Orientation (EO) and Pro-Environmental Behavior (PEB).
Entrepreneurial orientation involves innovation, proactiveness, calculated risk-taking, autonomy, and competitive behavior. Pro-environmental behavior, meanwhile, includes practices such as reducing waste, conserving energy, using environmentally friendly inputs, and adopting business practices that reduce environmental impacts.
The researchers conducted a survey among culinary MSMEs in the Ciputat and Pamulang districts of South Tangerang. Respondents were business owners or operational managers who were actively running their businesses and had operated for at least one year. A total of 200 questionnaires were distributed, 187 were returned, and 185 were considered complete and suitable for analysis, producing an effective response rate of 92.5 percent.
Most respondents were business owners, accounting for 95.7 percent of the sample, while 4.3 percent were managers. Men represented 80 percent of respondents. The largest age group was 36–45 years, accounting for 31.9 percent, followed by those aged 26–35 years at 27.6 percent. Most businesses, or 72.4 percent, had been operating for one to five years. Notably, 93 percent of the businesses operated without formal employees and were run directly by their owners.
Data were collected through face-to-face surveys using printed questionnaires. Respondents answered the questions using a five-point scale. The research instrument contained 21 items measuring four constructs: self-efficacy, MSME sustainability, entrepreneurial orientation, and pro-environmental behavior. The data were then analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) with SmartPLS 4.
The findings demonstrate a strong relationship between entrepreneurs’ self-confidence and MSME sustainability. Self-efficacy had a positive and significant effect on MSME sustainability, with a path coefficient of 0.497. This indicates that stronger confidence in one’s own entrepreneurial capabilities is associated with greater business sustainability.
The strongest relationship involving self-efficacy was found with entrepreneurial orientation. The coefficient reached 0.684, with a significance level below 0.001. This suggests that entrepreneurs with stronger confidence in their abilities are more likely to take initiatives, innovate, search for new market opportunities, and undertake calculated risks.
Entrepreneurial orientation was also found to have a positive effect on MSME sustainability, with a coefficient of 0.292. This pathway demonstrates that self-confidence does not remain merely a psychological characteristic. It can be translated into strategic actions that help businesses adapt to market changes and maintain competitiveness.
The environmental pathway also produced positive results. Self-efficacy positively influenced pro-environmental behavior, with a coefficient of 0.198, while pro-environmental behavior positively affected MSME sustainability, with a coefficient of 0.293. Practices such as waste reduction, energy efficiency, and environmentally friendly sourcing can help businesses reduce waste while responding to growing consumer and regulatory attention to environmental issues.
However, compared with entrepreneurial orientation, the direct contribution of self-efficacy to pro-environmental behavior was relatively limited. The R² results show that self-efficacy explained 46.7 percent of the variance in entrepreneurial orientation but only 3.9 percent of the variance in pro-environmental behavior. This suggests that other factors beyond entrepreneurs’ confidence may play a larger role in shaping environmentally responsible business practices.
Both pathways were also confirmed as mediators between self-efficacy and MSME sustainability. Entrepreneurial orientation produced an indirect effect of 0.199 with a significance level below 0.001. Pro-environmental behavior produced an indirect effect of 0.058 with a p-value of 0.011. Both functioned as partial mediators because the direct effect of self-efficacy on MSME sustainability remained significant.
The structural model also demonstrated relatively strong explanatory power. The R² value for MSME sustainability reached 0.703. This means that self-efficacy, entrepreneurial orientation, and pro-environmental behavior jointly explained approximately 70.3 percent of the variance in MSME sustainability within the research model.
The findings offer an important message for MSME owners. Business sustainability is not only a matter of capital and business strategy. It is also connected to the psychological readiness of entrepreneurs. Confidence in one’s own capabilities can provide a foundation for dealing with pressure, making decisions, innovating, and maintaining a business in changing market conditions.
For governments and MSME support institutions, the findings highlight the importance of programs that go beyond financial assistance. Capacity-building programs should also strengthen entrepreneurs’ psychological capabilities and strategic skills. Leadership coaching, mentoring, and peer-learning programs can help business owners develop stronger confidence and decision-making capabilities.
Environmental support is also important because green practices may create initial financial and operational costs for micro and small businesses. The researchers recommend financial incentives such as green loans and tax credits, along with green infrastructure, to reduce barriers for MSMEs seeking to adopt environmentally friendly innovations.
Overall, the research by Ade Nurdiansyah and Nia Kusuma Wardhani demonstrates that entrepreneurial self-efficacy can serve as an important foundation for MSME sustainability. Its influence becomes more tangible when confidence is translated into innovation, proactive market behavior, calculated risk-taking, and environmentally responsible practices. The findings suggest that economic sustainability and environmental responsibility do not necessarily have to compete with each other. Instead, they can be developed together through confident, adaptive, and sustainability-oriented entrepreneurial leadership.
Author Profiles
Ade Nurdiansyah — Universitas Mercu Buana, Jakarta.
Nia Kusuma Wardhani — Universitas Mercu Buana, Jakarta.
Research Source
Article Title: Driving MSME Sustainability through Self-Efficacy: The Dual Mediating Roles of Entrepreneurial Orientation and Pro-Environmental Behavior
Journal: East Asian Journal of Multidisciplinary Research (EAJMR), Vol. 5 No. 8, 2026, pp. 3535–3554.
DOI: https://doi.org/10.55927/eajmr.v5i8.286
Journal Website: https://journaleajmr.my.id/index.php/eajmr
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