Digitalization of Sharia MSMEs Based on Green Business Model: The Influence of Digital Marketing Capability and Islamic Business Ethics on Green Business Model Innovation, Business Resilience, and Financial Performance

Abstract

Global economic challenges that demand business sustainability and resilience encourage sharia MSMEs to transform their business models through digitalization oriented to green business models. This study aims to analyze the influence of Digital Marketing Capability and Islamic Business Ethics on Green Business Model Innovation, as well as its impact on the Business Resilience and Financial Performance of Islamic MSMEs. The research population is MSMEs based on sharia values (both halal certified and those that apply sharia principles in business governance) in Semarang City. A quantitative approach was used by survey method on150 MSME owner/manager respondents, analyzed using Structural Equation Modeling based on Partial Least Squares (PLS-SEM). Overall, the model shows that Islamic business ethics are a key factor, while digital marketing capabilities serve as a complement in improving financial resilience and performance. This research is a contribution to the theoretical development of Dynamic Capability Theory and Stakeholder Theory in the context of the digital transformation of sharia MSMEs, as well as practical contributions for business actors and policymakers in encouraging MSME resilience based on the green economy and inclusive growth, in line with the theme "Advancing Green Economy and Sustainable Development".