Interconnection of Green Knowledge Management and Sustainable Business Capabilities: An Investigation of the Culinary MSME Sector in the Food Waste Emergency Zone of Indonesia

MSMEs face thorny problems in the contribution of the Yogyakarta culinary MSME economic sector. Although MSMEs have a vital role in economic growth and employment, negative impacts on the environment are a pressing issue. This research explores the concept of Green Knowledge Management to improve green business capabilities in overcoming waste problems and sustainable practices. The quantitative approach was chosen with an online survey of Indonesian Culinary MSMEs with SEM PLS analysis techniques. The results showed that Green Knowledge Management had a significant positive impact on the performance of Indonesian culinary MSMEs. It helps identify green practices, innovation, tax compliance, CSR, and digitalization. It promotes sustainability, operational efficiency, and competitiveness. Recommendations include training, tax incentives, green innovation, CSR, digitalization support from the government, and MSMEs’ focus on green knowledge management for sustainable growth.


Introduction
As a country still in the development stage, Indonesia continues to strive to improve its economic sector to achieve better development.The government has taken various steps to achieve economic progress for the welfare of its people.One of the approaches applied is empowering the community, which is the main principle in sustainable, empowering, and people-oriented economic development [1].The government has made various efforts to empower the community, including supporting them in developing Micro, Small, and Medium Enterprises (MSMEs) and modernizing cooperatives [2].MSMEs play an important role in the Indonesian economy as a form of business that operates on a small scale, stand alone, and are managed by local communities or families [3].They contribute to the community's economic growth by creating new job opportunities, which in turn can reduce unemployment and poverty rates in Indonesia today.MSMEs also contribute significantly to absorbing labor, reaching around 96.9% of the total national employment and around 60.5% of the Gross Domestic Product (GDP).This fact illustrates the important role of MSMEs as the main driver in the Indonesian economy, which can reduce the unemployment rate [4].However, currently, MSMEs in Indonesia face the problem of their business impact on the environment.Many MSMEs still do not care about sustainable practices, such as using hazardous chemicals and waste disposal that are not environmentally friendly.This can threaten local ecosystems and public health.One of the environmental emergency issues going viral in Indonesia is the volume of waste in the Special Region of Yogyakarta, which exceeds the limit until all landfills in Yogyakarta are closed.Several corners of Yogyakarta Street have suddenly become garbage dumps due to the effects of landfill closures.Based on data from the DIY Regional Development Agency in 2023 until the second this article was made, Yogyakarta DI Province can produce up to 1,231 tons of waste per day.Culinary and household MSMEs are indicated to be the top two largest contributors of waste in Yogyakarta Province [5].This is because the Food Waste phenomenon still occurs in Yogyakarta, which has serious implications for waste management and makes Yogyakarta Province a waste emergency zone with Jakarta and Bandung [6].This condition aligns with the Ministry of Environment and Forestry of the Republic of Indonesia's (2021) statement that 40.79% of Indonesia's waste is food or waste materials [7].All business sectors, especially Culinary MSMEs in Yogyakarta Province, are encouraged to participate in solving waste problems through the green business movement as a transformation of sustainable economic growth and focus on environmentally friendly activities.Environmental researchers offer various solutions for culinary MSMEs, ranging from using environmentally friendly places, independent organic waste management, biopores, and making composters from waste to recycling waste with technology [8].However, a proper knowledge management green process is required in the green business movement.Knowledge management facilitates the dissemination of knowledge in the business world.It supports the capabilities of MSMEs in building green businesses [9].The subject of this study is environmental, social, and economic sustainability as a sustainable business dimension in culinary MSMEs in Yogyakarta due to the interaction between green knowledge management and green business capabilities towards sustainable business performance.So, this study aims to analyze the influence of green management knowledge practices in green business capability and its implications for the sustainable performance of Yogyakarta Culinary MSMEs.This study is the first interconnection study between green knowledge management, green business capabilities, and its role in improving sustainable business performance in the MSME sector.

Food Waste Emergency Problem
Indonesia's food waste emergency is a serious problem with multiple impacts: hunger and unsustainability [10].Food wastage rates are high due to problems in the food supply chain, from farmers who have to throw away crops to consumers who often throw away food due to a lack of education.Food waste also damages the environment and contributes to climate change.In culinary MSMEs, one of the causes is a lack of planning, causing excessive food to be thrown away [11].MSME actors need knowledge and understanding of efficient, effective, sustainable food planning and management.The problem of food waste must be addressed immediately to reduce hunger and environmental impact.

Resource Based View (RBV) Theory
RBV (Resource-Based View) theory emphasizes the emphasis on the competitive advantage that comes from within the organization [12].This forms the basis of the company's strategy, focusing on identifying, managing, and developing resources and capabilities for the best results.The key to success in implementing this strategy is maintaining resource diversity, preventing competitors from imitating or owning unique resources, and managing resources efficiently.RBV theory considers resources essential for analyzing opportunities and addressing threats in business [13].It encourages companies to manage internal resources as the primary source of long-term competitive advantage, leaving aside the focus on the external competitive environment.It is an approach that emphasizes the value of resources and capabilities in measuring organizational success.

Green Knowledge Management
Green Knowledge Management is managing knowledge to support environmental sustainability in organizations [14].It includes the creation, management, and efficient use of knowledge.In the context of green business, it focuses on using knowledge to achieve sustainability.It involves a culture of knowledge sharing and supporting innovation.Knowledge plays a role in encouraging creativity and innovation, enabling MSMEs to combine knowledge resources to create added value [15].Knowledge Management also spurs corporate innovation activity and helps address contemporary environmental and socio-economic challenges [16].

Circular Economy Capabilities
Circular Economy capability is organizations' ability, including culinary MSMEs, to adopt circular economy principles to reduce resource waste and environmental impact [17].This involves the management of food waste, efficiently using foodstuffs and cooperation with local producers.With this capability, MSMEs can save production costs, increase efficiency, and deliver more affordable products while protecting the environment.Circular economy capabilities are a key aspect in the sustainability of culinary MSMEs, enabling them to align green business practices with sustainable economic growth [18].

Tax Adherence
Tax compliance is important for green MSMEs.This includes paying taxes according to the law and supporting sustainable business practices [19].Taxes can be an incentive for MSMEs to adopt green practices.The state provides tax breaks for green technology and renewable energy.The tax also funds environmental projects such as recycling and energy efficiency [20].MSMEs must comply with taxes conscientiously, create a good reputation, and seek green tax incentives.Combine green practices with tax compliance to positively impact the environment, society, and financial sustainability [21].

Green Innovation
Green Innovation is the process of creating new solutions focused on environmental sustainability [22].This includes Green Technological Innovation, where new technologies are developed, or existing technologies are modified to reduce negative environmental impacts [23].An example is the development of renewable energy and waste treatment technologies that are more environmentally friendly.In addition, Green Innovation also involves Green Management Innovation, a change in how businesses and organizations manage to minimize their environmental footprint [24].This could be using green business practices, sustainable supply chain management, or adopting stricter environmental policies.These aspects, Green Technological Innovation, and Green Management Innovation work together to create more sustainable solutions in business and society.

Corporate Social Responsibility in the MSME Sector
Corporate Social Responsibility (CSR) in the MSME (Micro, Small, and Medium Enterprises) sector includes the commitment of small and medium businesses to social and environmental responsibility [25].MSMEs should consider the positive impact on surrounding communities and the environment.This includes implementing sustainable business practices, such as environmentally friendly waste management, supporting local work, and contributing to community development [26].By integrating CSR, MSMEs can strengthen their reputation, increase consumer engagement, and ensure sustainable growth.This important commitment helps create a long-term positive impact on the surrounding community and environment.

Digitalization Capabilities
Digitalization capability is the ability of an organization or individual to adopt, integrate, and optimize digital technologies in their operations and business strategies [27].It includes an understanding of technology, the ability to select and implement appropriate digital solutions, and skills to manage data and information efficiently.Digitalization capability enables organizations or individuals to increase efficiency, innovation, and responsibility in rapidly changing business environments [28].With this ability, they can run a more adaptive, competitive, and sustainable business in the digital age.

Sustainable Business Performance
Sustainable business performance refers to the ability of a company to achieve its financial and operational goals while maintaining a balance between social and environmental aspects [29].This includes economically, socially, and ecologically sustainable business practices and paying attention to their long-term impact.Companies that succeed in sustainable business performance can create long-term added value, minimize environmental and social risks, enhance reputation, and respond to customer demands and increasingly stringent regulations related to sustainability [30].Thus, sustainable business performance promotes sustainable business growth, positively impacts society, and maintains balance with the environment.

Research Methods
This study uses a quantitative research approach, and primary data is collected using survey methods to investigate the influence of green knowledge management in green business capabilities to achieve sustainable culinary MSME business performance.This study has seven variables including green knowledge management, circular economy capability, tax adherence, green innovation, corporate social responsibility and digitalization capability as exogenous variables and sustainable business performance as endogenous variables.The instrument was developed based on previous research evidence [14,19,22,26,27,30,31] The constructive variables and path hypotheses are further illustrated in the following figure 1.This study proposes 10 hypotheses, namely: H1: Green knowledge management has a significant effect on circular economy capability H2: Green Knowledge Management has a significant effect on tax compliance H3: Green Knowledge Management has a significant effect on green innovation H4: Corporate social responsibility has a significant effect on H5: Green Knowledge Management has a significant effect on digitalization capability H6: Circular economy capability has a significant effect on sustainable business performance H7: Tax adherence has a significant effect on sustainable business performance H8: Green innovation has a significant effect on sustainable business performance H9: Corporate social responsibility has a significant effect on sustainable business performance H10: Digitalization capability has a significant effect on sustainable business performance The population in this study are all MSME owners engaged in the culinary sector.The population in this study is unknown in detail and considerable numbers.Sample determination using the opinion of Heir et al. (2017) states that the sample size is at least five times the indicator [31], so the sample analyzed was 290 respondents.The questionnaire distribution process was carried out online via Google form and disseminated based on the research team's social media and entrepreneurial coaching relations.
The method used to analyze data and test hypotheses in this study is the Structural Equation Modeling method with Partial Least Square (SEM-PLS).SEM-PLS is a multivariate statistical analysis technique to examine a variable's direct and indirect influence [32].The PLS-SEM analysis method excels because it is suitable for non-normal and complex data, allows small samples, and focuses on partial models, making it more flexible and effective in modeling complex relationships between variables [33].

Respondents Characteristics
This research succeeded in getting 300 respondents who were owners of Culinary MSMEs in Indonesia, with the majority of participants being women (80%), while only 20% were men.In terms of age, most participants were between 20 and 40 years old, with the largest portion being in the 20-30 year old range (36%).Furthermore, the majority of respondents came from Java (49%), followed by Kalimantan (18%) and Bali-Nusa Tenggara (12%) in terms of geographical location.The latest educational information shows that most respondents have completed higher education with a Bachelor's/Diploma degree (30%).In comparison, the other 35% have a high school educational background.Main Course is the most common type of culinary business (56%), followed by Snacks (28%) and Beverages (16%).In terms of business categories, the majority are at the Micro (43%) and Small (33%) levels.Lastly, most businesses have been operating for 1-2 years (44%), with the rate of 3-4 year businesses (25%) being the second largest.The data results are more detailed in Table 1 below.

Measurement Outer Model
The measurement model is an analysis carried out to test the relationship between latent variables and indicators, or what is usually called an outer model [34].The measurement model in this research is a hierarchical component model (multidimensional construct) with a reflective-formative indicator model.Reflective model testing is tested using validity and reliability test analysis.The loading factor value must be above 0.7 to achieve good validity, and the Average Variance Extracted (AVE) value must be above 0.5 [35].Meanwhile, the composite reliability and Cronbach alpha values are above 0.7 for good reliability results.
Table 2 shows that the loadings factor scale value for each variable in the indicator is more than 0.70.Apart from that, the AVE values for all constructs have met the recommended values, namely more than 0.50.Apart from that, the composite reliability and Cronbach alpha values for all variables are above 0.70.So, it can be concluded that validity and reliability have been achieved and can be continued at the next stage.

Inner Structural Model
The structural model is an analysis carried out on the inner model, which explains the relationship between latent variables.In the structural model, hypothesis testing is carried out by analyzing the determinant coefficient (R2) and through a bootstrapping process with a significance level of 5% [36].
The coefficient of determination, abbreviated as R-squared, is a statistical measure used in regression analysis to measure the extent to which a regression model can explain variability in data.R-squared ranges from 0 to 1, with 0 meaning the model does not explain any variability and 1 meaning the model explains all the variability data.The R-Square test has three classifications: above 0.7 in the large category, values in the range of 0.3-0.7 in the medium category, and below 0.3 in the small category [37].Table 3 shows that all endogenous variables have an R-Square value above 0.7, or it can be concluded that the value of the simultaneous relationship between exogenous and endogenous variables is very strong.
Next, hypothesis testing is carried out to find the significance of the relationship.The hypothesized relationship is accepted if the Path Coefficient value is positively charged, the t-value < 1.96, and the p-value > 0.05 [38].Based on the test results in Table 3, it was found that all the proposed hypotheses were accepted.It should be noted that H5, with the statement on the influence of green knowledge management on digitalization capability, is the strongest relationship.The assessment of the results of hypothesis testing will be presented further in the discussion subchapter.

Discussion
The results of hypothesis testing found that Green knowledge management significantly influences the circular economy capability of Indonesian culinary MSMEs.By managing green knowledge, MSMEs can identify environmentally friendly practices and food production and distribution innovations.This can reduce waste, save resources, and promote material reuse.In addition, knowledge about sustainable marketing and green resources can help culinary MSMEs build a positive image in a market increasingly concerned about the environment.Thus, green knowledge management is the key to improving the capabilities of culinary MSMEs in realizing a sustainable circular economy.Green Knowledge Management was also found to have a significant influence on tax compliance of Culinary MSMEs because, through sustainable knowledge management, MSMEs can understand and implement green practices that can potentially reduce the tax burden.Knowledge of tax incentives and sustainable strategies can help MSMEs optimize their tax obligations, increase tax compliance, and reduce audit risk.
Additionally, this knowledge enables MSMEs to identify tax incentive opportunities linked to sustainable practices, encouraging investment in more efficient green technologies and practices, which can ultimately increase their competitiveness and business growth.Green knowledge management plays an important role in increasing the green innovation of Culinary MSMEs.By managing relevant environmental knowledge, MSMEs can identify green innovation opportunities, such as environmentally friendly raw materials or more sustainable production processes.Additionally, sharing information and collaborating with other stakeholders can broaden horizons and access to resources that support innovation.Therefore, green knowledge management is a key foundation for encouraging green innovation in culinary MSMEs.
Furthermore, the results of hypothesis testing found that green knowledge management significantly affects the corporate social responsibility (CSR) of culinary MSMEs.With access to knowledge about green practices, MSMEs can reduce their environmental impact, promote better business ethics, and meet the demands of customers increasingly concerned about sustainability.This helps improve a company's image, increase consumer trust, and improve social performance.Next, green knowledge management significantly influences the digitalization capability of Culinary MSMEs because it allows MSMEs to access relevant information and sustainable practices.This can increase operational efficiency, minimize environmental impacts, and create added value for increasingly environmentally conscious consumers.By utilizing green knowledge, Culinary MSMEs can more easily adapt to digital technology, expand their markets, and strengthen their competitiveness in the digital era.
This study examines the determination of the green business capabilities of Culinary MSMEs on sustainable business performance.The result is that circular economy capability, tax adherence, green innovation, corporate social responsibility, and digital capability significantly influence the sustainable business performance of culinary MSMEs.First, the circular economy capability allows MSMEs to reduce waste and utilize resources efficiently, reducing operational costs and increasing long-term profitability.Second, tax adherence reflects the commitment of MSMEs to comply with tax regulations, which can avoid legal risks and provide confidence to stakeholders.Third, green innovation allows MSMEs to create environmentally friendly products and processes, attracting consumers increasingly concerned about the environment.Fourth, corporate social responsibility (CSR) builds a positive reputation and customer trust by contributing to society and the environment.Lastly, digital capability accelerates market access, operational efficiency, and online marketing, increasing the visibility and competitiveness of MSMEs.Combining these factors allows culinary MSMEs to achieve sustainable business performance by reducing environmental impacts, complying with regulations, creating products in demand in the market, building a positive reputation, and utilizing digital technology for sustainable growth.This creates an ecosystem that supports the sustainable growth of culinary MSME businesses.

Conclusion
In this research, it is concluded that green knowledge management positively and significantly impacts various aspects of the performance of culinary MSMEs in Indonesia.Green knowledge management helps MSMEs identify environmentally friendly practices, innovation, meeting tax demands, corporate social responsibility (CSR), and digitalization capabilities.This opens opportunities to reduce waste, save resources, and promote sustainability while improving operational efficiency and competitiveness.These factors, including circular economy capability, tax adherence, green innovation, CSR, and digital capability, support sustainable business performance for culinary MSMEs.This conclusion highlights the important role of green knowledge management in realizing sustainable growth in the culinary industry.
There are several recommendations that the Government and Indonesian Culinary MSMEs can make.The government needs to support education and training initiatives regarding green knowledge management for culinary MSMEs.This program can help MSMEs identify sustainable practices and green innovation in food production and distribution.The government can incentivize MSMEs to implement sustainable practices and manage tax knowledge well.This will encourage tax compliance and reduce their tax burden.The government must create an environment that supports green innovation in culinary MSMEs.This includes support for ongoing product research and development and collaboration with related parties.The government can encourage culinary MSMEs to be active in CSR activities by giving awards or recognition to those who excel.This will strengthen the company's positive image and improve its social performance.The state's role is important in promoting a circular economy by incentivizing MSMEs to reduce waste and utilize resources efficiently.Indonesian culinary MSMEs must focus on Green Knowledge Management to improve sustainable business performance.By managing green knowledge, MSMEs can reduce waste, save resources, and promote environmentally friendly practices.Additionally, knowledge of sustainable marketing and tax incentives can help build a positive image and maximize tax liabilities.Collaboration with stakeholders is also needed to expand green innovation.In addition, investment in digitalization capability is important to expand markets and increase efficiency.This combination will enable culinary MSMEs to achieve sustainable growth by reducing environmental impact, complying with regulations, and utilizing technology to create products that are in demand and build a positive reputation.This study reflects the strong interconnection between sustainable knowledge management and sustainable business capabilities within the culinary MSME sector in Indonesia's food waste emergency zone.Its relevance to the Sustainable Development Goals (SDGs) lies in its contribution to achieving several SDGs, such as SDG 12 (Responsible Consumption and Production) by reducing food waste, SDG 9 (Industry, Innovation, and Infrastructure) through the enhancement of sustainable business capabilities, and SDG 13 (Climate Action) by promoting environmentally friendly practices.This underscores the crucial role of green knowledge in supporting sustainable development in Indonesia, particularly in the culinary MSME sector, and illustrates how this research aligns with the SDGs.

Table 2 .
Outer Model Measurement Test

Table 3 .
Hypothesis Testing Results & R-Square