Development and Validation Measures for Green Entrepreneurship and Environmental Sustainability of SMEs in Nigeria

Abstract

The global emphasis on environmental sustainability has placed pressure on Small and Medium Enterprises (SMEs) to embrace green entrepreneurial practices. Despite increasing global emphasis on sustainable business practices, empirical tools tailored to the Nigerian SME context remain scarce. This research aimed to develop and validate measurement scales that incorporated five proxies of green entrepreneurship (environmental entrepreneurship, green institutional entrepreneurship, and green market appropriating entrepreneurship, green producer-focused and green customer-focused informational entrepreneurship) as well as ecological entrepreneurship of SMEs in Nigerian context. A total of 313 entrepreneurs took part in this research. Data were analyzed through exploratory factor analysis (EFA) and confirmatory factor analysis (CFA), by the use of partial least square – structural equation modeling (PLS-SEM) approach. The reliability was achieved through the composite reliability (rho_a and rho_c), outer loading constructs, and cronbach’s alpha. The validity was performed through convergent validity which was obtained by measuring the average variance extracted (AVE), while the discriminant validity of the instrument was confirmed through heterotrait-monotrait (HTMT). CR and AVE values showed a satisfactory level to establish measurement model and all values assed to prove discriminant validity achieved the HTMT criterion. Model fit assessment was performed through SRMR and NFI criteria, which confirmed the study’s model fit as sufficiently robust to support further analysis. Fundamentally, the development and validation of measurement scale through PLS-SEM has showed that the scales developed in this research are valid and statistically reliable.