Based on Stakeholder Theory and Social Cognitive Theory. This research aims to determine the influence of the
relationship between green process innovation on the performance of MSMEs and moderating perceived environmental
volatility. This research uses a survey. Research population of MSME owners in Solo City, Indonesia. Convenience sampling was
used with a sample size of 120 respondents. Data analysis used PLS-SEM version 3.0. The research results show that green
transformational leadership has a significant effect on the performance of MSMEs. Green process innovation has a significant
effect on the performance of MSMEs. Moderation of perceived environmental volatility in the relationship between green
process innovation has a significant effect on the performance of MSMEs and has a positive but not significant effect. The
current research provides useful insights into green process innovation and perceived environmental volatility that can improve
MSME performance.
