INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)  
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025  
Green Entrepreneurship Challenges and Business Growth among the  
Selected Sectors  
Norhidayah Mohamad1*, Nur Amielin Aisyah Hamiza1, Elly Julieanatasha Juma’at1, Mohamed Hafiz  
Md Isa2, Azrina Othman1, Norsamsinar Samsudin3  
1Faculty of Technology Management and Technopreneurship / Universiti Teknikal Malaysia Melaka,  
Malacca, Malaysia  
2Faculty of Mechanical Technology and Engineering / Universiti Teknikal Malaysia Melaka, Malacca,  
Malaysia  
3Faculty of Management and Economics / Universiti Pendidikan Sultan Idris, Malaysia  
*Corresponding Author  
DOI: https://dx.doi.org/10.47772/IJRISS.2025.91100507  
Received: 06 December 2025; Accepted: 12 December 2025; Published: 20 December 2025  
ABSTRACT  
Green entrepreneurship plays a vital role in promoting sustainable development in Malaysia; however,  
entrepreneurs encounter barriers that constrain its growth. This study examines the impact of regulatory,  
financial, market, technological, and infrastructure barriers, as well as knowledge management barriers, on  
business growth across renewable energy, sustainable agriculture, and eco-friendly product sectors. Using a  
quantitative approach, data from 376 entrepreneurs were analysed through ANOVA and multiple regression.  
Results show significant sectoral differences for regulatory (p = 0.035) and financial barriers (p = 0.033). The  
model explained 60.7% of the variance in business growth (R² = 0.607). All barriers significantly affected  
growth, with financial (β = 0.443) and regulatory (β = 0.188) showing the strongest influence, while knowledge  
management had a negative effect (β = –0.141). The findings imply an urgent need for streamlined regulations,  
targeted financial mechanisms, enhanced technological infrastructure, and stronger knowledge management  
systems to support innovation, competitiveness, and long-term sustainability in Malaysia’s green  
entrepreneurship ecosystem.  
Keywords: Green Entrepreneurship, Challenges, Business Growth  
INTRODUCTION  
Entrepreneurship plays a vital role in economic development by introducing new goods, services, processes, and  
business models. At its core, it involves innovation, strategic planning, and the willingness to take risks.  
Entrepreneurs identify market gaps, develop solutions, and mobilize limited resources to create value. Through  
this process, they not only build businesses but also contribute to social progress and national competitiveness.  
In recent decades, the concept of green entrepreneurship has gained global traction as environmental concerns  
intensify. The term originated from Berle’s influential book The Green Entrepreneur (1991), which emphasized  
environmentally responsible business opportunities in areas such as recycling, renewable energy, and  
conservation. Berle’s statement, “One man’s garbage is another man’s treasure,” encapsulates the mindset  
behind green entrepreneurship turning environmental challenges into profitable and sustainable ventures. Later  
scholars, including Allen and Malin (2008), highlight that green entrepreneurs embrace environmental values as  
part of their identity, viewing sustainability not only as a moral obligation but as a source of competitive  
advantage.  
Green entrepreneurs are individuals or teams who integrate ecological and social responsibility into their  
business models. They aim to address environmental problems while remaining commercially viable. Well-  
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INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)  
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025  
known figures such as Yvon Chouinard of Patagonia demonstrate how sustainability-driven business models can  
thrive, proving that environmental activism and profitability can coexist (Green, 2021). The global rise in  
demand for eco-friendly products, combined with stronger environmental regulations and growing awareness of  
sustainability issues, has further accelerated this shift.  
The growth of green entrepreneurship has been particularly notable in regions such as the United States,  
particularly in California, and across Europe, including Germany and the Nordic countries. International bodies,  
such as the United Nations, have reinforced this movement through the Sustainable Development Goals (SDGs),  
which promote environmentally responsible economic growth. Academic research has also expanded, exploring  
green entrepreneurship through theoretical models, policy analysis, case studies, and impact assessments. Hall  
et al. (2010) emphasizes the environmental and economic contributions of green ventures, while Schaper (2002)  
highlights the incentives and barriers eco-entrepreneurs encounter.  
In Malaysia, green entrepreneurship is increasingly relevant as small and medium-sized enterprises (SMEs) play  
a major role in national economic growth. SMEs significantly contribute to the country’s GDP, positioning them  
as essential actors in Malaysia’s sustainability agenda. However, despite rising awareness, the transition toward  
green entrepreneurship remains challenging. Studies indicate that Malaysian green entrepreneurs often face  
regulatory burdens, financial constraints, technological limitations, and knowledge and infrastructure gaps  
(Whah & Merdikawati, 2020). These obstacles reduce their ability to innovate, differentiate products, or secure  
funding for green initiatives.  
Moreover, challenges vary by sector. Demirel et al. (2021) demonstrate that renewable energy businesses  
struggle with high capital requirements and complex regulations; sustainable agriculture ventures face challenges  
related to consumer acceptance; and eco-friendly product manufacturers encounter difficulties with supply chain  
management and market differentiation. Understanding these sector-specific barriers is crucial for developing  
targeted support mechanisms.  
Another key gap in current research is the lack of holistic analysis. Existing studies often examine barriers  
individually, overlooking how regulatory, financial, and technical challenges interact to influence long-term  
business growth (York & Avery). Additionally, global disruptions such as climate change and the COVID-19  
pandemic highlight the need for resilient and adaptable green business models (Shepherd & Williams, 2022).  
Overall, while green entrepreneurship holds immense potential for driving Malaysia’s sustainability transition,  
significant barriers persist. Addressing these gaps through comprehensive research and supportive policy  
frameworks is crucial to empowering SMEs to adopt sustainable practices and contribute effectively to both  
environmental and economic well-being.  
LITERATURE REVIEW  
Green Entrepreneurship  
Green entrepreneurship has gained significant attention as societies increasingly recognize the urgent need to  
address environmental degradation and promote sustainable development. Berle (1991) introduced the concept  
by describing green entrepreneurship as business activities that generate economic value while protecting the  
environment, often transforming waste into productive resources. This perspective reflects the central idea that  
environmental challenges can serve as opportunities for innovation. Green entrepreneurs integrate ecological  
values into their business identity, regarding sustainability not only as an ethical responsibility but also as a  
source of competitive advantage (Allen & Malin, 2008).  
The growing relevance of green entrepreneurship is largely driven by global concerns related to climate change,  
resource depletion, and the long-term social impacts of environmental deterioration. International organizations  
such as the United Nations have promoted sustainability agendas that encourage firms to adopt environmentally  
responsible practices. With increasing pressure from consumers, investors, and regulators, businesses are  
expected to operate more sustainably. Green entrepreneurship provides a strategic pathway for firms to meet  
these expectations while enhancing competitiveness through cost savings, innovation, and market differentiation.  
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INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)  
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025  
Schaltegger et al. (2019) emphasise that green entrepreneurship plays a crucial role in linking economic progress  
with environmental preservation, thereby supporting sustainable development goals.  
However, the degree of acceptance and implementation of green entrepreneurship varies across regions due to  
differences in regulations, cultural values, and consumer awareness. Countries with strong environmental  
policies and a societal commitment to sustainability, such as Germany and the Scandinavian nations, exhibit  
higher levels of green entrepreneurial activity. Regions with weaker regulations or limited public awareness  
often face barriers related to financing, market acceptance, and consumer understanding. Studies by Arshad, M.  
Z., (2020) highlight the importance of government support and consumer education, while Schaltegger and  
Wagner (2019) stress the need for integrated sustainability strategies across industries to enhance green  
entrepreneurial efforts.  
Regulatory  
Regulatory barriers pose a significant constraint to the growth and sustainability of green entrepreneurship,  
particularly in emerging economies such as Malaysia. Although environmental regulations are intended to  
preserve natural resources and ensure responsible business practices, they often impose complex administrative  
and procedural burdens on entrepreneurs. In the Malaysian context, green businesses must navigate multiple  
layers of regulatory requirements, including obtaining environmental permits, complying with audits, and  
obtaining sustainability certifications. These procedures frequently demand considerable time, financial  
resources, and specialized knowledge, placing disproportionate pressure on small and medium-sized green  
enterprises. Such challenges can discourage entrepreneurial activity and limit the industry’s ability to innovate  
or scale sustainably (Vasilescu et al., 2023).  
A notable issue within the regulatory landscape is the inconsistency of policy enforcement and the lack of clarity  
in regulatory guidelines. Entrepreneurs commonly report uncertainty regarding environmental compliance  
procedures, overlapping responsibilities among regulatory agencies, and a lack of guidance on sustainability  
standards. This regulatory ambiguity increases operational risk and contributes to inefficiencies in planning and  
project implementation. Vasilescu et al. (2023) highlight that complex and unclear regulations significantly  
hinder the advancement of green entrepreneurship, as businesses may avoid pursuing environmentally focused  
initiatives due to concerns over regulatory unpredictability.  
Evidence from other developing nations mirrors the Malaysian experience. For example, research by Purva  
Mimaansa (2020) reveals that Indian green entrepreneurs frequently encounter bureaucratic delays, stringent  
environmental approval processes, and unclear legal requirements. These barriers not only delay business  
operations but also reduce the attractiveness of green entrepreneurship as a viable economic activity. The  
similarities across national contexts suggest that regulatory challenges are not isolated but represent a broader  
systemic issue affecting green sectors globally.  
Despite these constraints, effective regulatory engagement remains essential for green entrepreneurial success.  
Entrepreneurs who proactively engage with regulatory bodies, invest in legal and compliance expertise, and  
participate in industry associations are better positioned to navigate these challenges. Collaboration between  
government agencies, industry groups, and entrepreneurs can also contribute to more coherent and streamlined  
regulatory processes. Enhanced communication between regulators and businesses may help reduce ambiguity,  
strengthen compliance, and foster a more conducive environment for sustainable enterprise development.  
H1: Regulatory challenges significantly impact the growth and sustainability of green entrepreneurship  
businesses in Malaysia.  
Financial  
Access to financing is a critical determinant of green entrepreneurship development in Malaysia. Green ventures  
often require substantial initial investments for renewable energy infrastructure, sustainable agricultural  
practices, or eco-friendly product development. Despite growing global interest in sustainable investments,  
traditional financiers frequently perceive such initiatives as high-risk due to limited familiarity with green  
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business models and uncertainties in market demand. This perception constrains green entrepreneurs’ ability to  
access necessary capital, limiting their growth, innovation, and competitiveness (Alvarez & Lowell, 2001).  
The reluctance of traditional lenders is compounded by concerns over the long-term sustainability of  
environmentally friendly technologies and potential regulatory shifts. Profitability uncertainty, coupled with the  
absence of standardized evaluation metrics for green ventures, further heightens perceived risk. Alvarez and  
Lowell (2001) emphasize that conventional financing mechanisms are often inadequate, highlighting the need  
for alternative structures specifically designed to address the challenges of green entrepreneurship.  
Government interventions have emerged as an effective strategy to mitigate these financial constraints. Brnjas  
et al. (2019) demonstrate that grants, subsidies, and low-interest loans can facilitate access to capital, enabling  
green enterprises to pursue growth and innovation. Beyond immediate financial support, these initiatives  
promote resource efficiency, waste reduction, and sustainable business practices, contributing to the broader  
transition toward a circular economy.  
In sum, financing remains a substantial barrier for green entrepreneurs in Malaysia. Overcoming this challenge  
requires coordinated efforts from public and private stakeholders, including innovative financial structures and  
supportive policy frameworks. By addressing these constraints, Malaysia can unlock the potential of its green  
sector, fostering sustainable economic development and long-term environmental benefits.  
H2: Financial constraints significantly impact the growth and sustainability of green entrepreneurship businesses  
in Malaysia.  
Market Dynamics  
Green entrepreneurs face significant challenges in penetrating mainstream markets and encouraging consumers  
to prioritize sustainability. In Malaysia, as in many other countries, consumer behavior is strongly influenced by  
price sensitivity, convenience, and cultural norms. Chang (2011) highlights that, despite growing environmental  
awareness, many consumers continue to prioritize affordability and ease of access when making purchasing  
decisions. This creates a competitive disadvantage for green entrepreneurs, who must contend with conventional  
products that are often perceived as more convenient or less expensive.  
Consumer awareness and market education are critical in driving demand for green products. Hannah (2012)  
emphasizes that, although interest in sustainability is increasing among Malaysian consumers, a gap remains in  
understanding the tangible benefits of green products and services. Effective marketing strategies that clearly  
communicate environmental advantages, product quality, and value propositions are essential for differentiating  
green offerings from conventional alternatives and building consumer trust.  
To navigate these challenges, green entrepreneurs must develop strategies that align with market dynamics while  
promoting sustainability. This includes offering competitive pricing, ensuring convenient access to products,  
and emphasizing tangible sustainability benefits such as cost savings, health improvements, or energy efficiency.  
Strategic partnerships with retailers, e-commerce platforms, and value-aligned influences can further expand  
market reach and enhance visibility for green products.  
In conclusion, successful market penetration in Malaysia requires a comprehensive and adaptive approach that  
addresses consumer preferences, educates the market on the benefits of green products, and strategically  
positions offerings within competitive marketplaces. Green entrepreneurs must adopt agile, innovative, and  
proactive marketing strategies to stimulate demand and drive sustainable consumption in Malaysia’s evolving  
economic and cultural context.  
H3: Market dynamics significantly impact the growth and sustainability of green entrepreneurship businesses in  
Malaysia.  
Technology and Infrastructure  
Developing and implementing green technologies presents significant challenges for entrepreneurs in Malaysia  
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due to the specialized technical expertise required and the rapid evolution of green innovations. Green ventures  
must continuously invest in research and development (R&D) to stay abreast of advancements in waste  
management, renewable energy, and sustainable agricultural methods. However, such R&D activities require  
substantial financial resources and a dedicated focus, which can be challenging for startups and small enterprises  
with limited capital (Fulvia et al., 2011).  
Scaling green technologies to commercial viability adds further complexity. Entrepreneurs face challenges  
related to production processes, supply chain management, and market acceptance. Fulvia et al. (2011) highlights  
that the successful deployment of sustainable technologies, such as renewable energy systems and advanced  
waste management solutions, requires not only technical expertise but also adequate technological infrastructure.  
Without access to these resources, green entrepreneurs may struggle to implement effective solutions or achieve  
operational efficiency.  
Another critical barrier is the limited availability of skilled labor and technology infrastructure in Malaysia. The  
green sector is still emerging, and there is a shortage of professionals with expertise in green technologies. This  
talent gap, combined with the scarcity of facilities such as renewable energy installations or advanced waste  
management systems, can hinder both adoption and scalability of green innovations. Entrepreneurs must  
navigate these structural limitations to develop and implement sustainable solutions effectively (John &  
Stephanie, 2008).  
Continuous innovation is therefore essential for overcoming technical challenges in the green sector. By  
fostering a culture of innovation and strategically investing in research and development, green entrepreneurs  
can develop products and services that meet market demands while minimizing environmental impacts.  
Collaborations with research institutions, industry partners, and government agencies can further facilitate  
knowledge transfer, provide access to technical expertise, and accelerate the adoption of green technologies,  
enabling sustainable growth in Malaysia’s green sector (John & Stephanie, 2008).  
H4: Technology and infrastructure significantly impact the growth and sustainability of Malaysia's green  
entrepreneurship businesses.  
Knowledge Management  
Knowledge management is a critical factor in the success of green entrepreneurship, as it enables entrepreneurs  
to effectively utilize information, experience, and best practices to implement sustainable business operations.  
Green entrepreneurs often face challenges in accessing relevant environmental knowledge, which can hinder  
innovation and reduce competitive advantage (Hockerts, 2017). The ability to gather, share, and apply  
information efficiently is therefore essential for ensuring that sustainable practices are effectively integrated into  
business processes.  
The rapid pace of technological advancement in sustainability further underscores the need for ongoing  
knowledge acquisition and adaptation. Green entrepreneurs must actively update their knowledge base through  
research and development (R&D), participation in industry conferences, and collaboration with environmental  
organizations. Schaltegger and Wagner (2019) highlight that the absence of formal knowledge management  
systems often results in critical insights and experiences being poorly documented or shared within  
organizations, limiting the effectiveness of sustainable business practices.  
Effective knowledge management also enables green entrepreneurs to make informed strategic decisions and  
respond proactively to market and regulatory changes. By understanding consumer preferences, emerging trends,  
and evolving environmental regulations, green enterprises can optimize operational processes and identify new  
opportunities for sustainable innovation. This capability is especially important in dynamic markets where both  
consumer expectations and technological standards are continually evolving.  
Investing in robust knowledge management practices strengthens the overall resilience and sustainability of  
green organizations. By systematically capturing, disseminating, and applying knowledge, green entrepreneurs  
can enhance their innovative capacity, improve operational efficiency, and build sustainable competitive  
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advantages. Ultimately, knowledge management serves as a foundational mechanism that supports the growth,  
adaptability, and long-term success of green ventures in Malaysia and beyond (Hockerts, 2017; Schaltegger &  
Wagner, 2019).  
H5: Knowledge management barriers significantly impact the growth and sustainability of green  
entrepreneurship businesses in Malaysia.  
Based on the discussions above, a conceptual framework is developed, as shown in Figure 1.  
Conceptual Framework  
This study examines the impact of green entrepreneurship barriers on the growth and sustainability of SMEs’  
businesses in Malaysia. The independent variables (IVs) consist of five dimensions of barriers: regulatory,  
financial, market, technology, and infrastructure, as well as knowledge management. The dependent variable  
(DV) is the impact on the growth and sustainability of their businesses.  
Fig. 1. Conceptual framework  
RESEARCH METHODOLOGY  
Methodology  
This study employed a quantitative research design to investigate the challenges faced by green entrepreneurs in  
Malaysia, specifically examining regulatory, financial, market, technological, infrastructural, and knowledge  
management barriers. A positivist philosophy with an objectivist epistemology guided the research, ensuring  
that findings remained unbiased and independent of the researcher’s interpretation. A deductive approach was  
employed to test hypotheses regarding the relationships between identified barriers and the growth and  
sustainability of green enterprises.  
Data were collected using a structured questionnaire distributed to Malaysian entrepreneurs who are engaged in  
or interested in green entrepreneurship. The questionnaire comprised three sections: (A) demographic profile,  
(B) factors influencing green entrepreneurship, and (C) assessment of perceived challenges, with Section C  
measured on a five-point Likert scale. Primary data were collected from a stratified random sample of 384  
entrepreneurs across three sectors: renewable energy, sustainable agriculture, and eco-friendly products.  
Secondary data from literature, reports, and previous studies supplemented the findings to provide context for  
the research.  
Data analysis was conducted using SPSS, incorporating descriptive statistics to identify prevalent challenges,  
ANOVA to compare differences across sectors, and multiple regression to assess relationships between barriers  
and business growth. Reliability analysis was performed to ensure internal consistency of measurement scales,  
while data cleaning and transformation ensured accuracy and readiness for statistical evaluation. A pilot study  
with 30 respondents validated the questionnaire and confirmed the reliability of the measurement model prior to  
full-scale data collection.  
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The study adopted a cross-sectional time horizon, collecting data at a single point to provide a snapshot of current  
challenges in Malaysia’s green entrepreneurship landscape. Stratified random sampling ensured representation  
across geographic regions and economic sectors, enabling generalizable and statistically reliable insights. This  
methodology provided a robust framework for identifying barriers, evaluating their impact, and informing  
strategies to promote sustainable growth in the green sector.  
A total of 374 respondents took part in this study, with the sample size determined using the Krejcie and Morgan  
(1970) method for calculating the population size. Data were collected through online surveys targeting  
entrepreneurs in the renewable energy sector, the eco-friendly products sector, and the sustainable agriculture  
sector in Malaysia, resulting in a 100% response rate. The demographic analysis provides an overview of the  
respondents' characteristics, including their gender, age, business operation period, and business sector.  
This study consisted of 376 respondents, with a slightly higher proportion of males (55.1%) than females  
(44.9%), indicating a relatively balanced gender distribution. Most respondents were young to middle-aged  
adults, primarily between 26 and 34 years old (35.6%), followed by those between 19 and 25 years old (26.9%)  
and 35 and 44 years old (26.6%). A small proportion were 45 years and above (10.9%). Regarding business  
experience, the majority operated enterprises that had been established for 1–6 years, with 35.6% in business for  
4–6 years and 30.9% for 1–3 years, suggesting that most participants manage relatively young to moderately  
established firms. The respondents were engaged in environmentally conscious sectors, with sustainable  
agriculture being the most represented (47.1%), followed by renewable energy (26.9%) and eco-friendly  
products (26.1%).  
RESULT  
Reliability Analysis  
A reliability analysis was conducted during the pilot study to assess the internal consistency of the measurement  
items for each variable using Cronbach’s Alpha. The results, summarized in Table II, indicate that all variables  
exceed the acceptable threshold of 0.7, demonstrating good to excellent reliability. Specifically, regulatory  
challenges had a Cronbach’s Alpha of 0.741, financial challenges 0.803, market challenges 0.763, technology  
and infrastructure challenges 0.798, and knowledge management challenges 0.746. Each of these variables was  
measured using five items, reflecting consistent and reliable measurement.  
The dependent variable, business growth, exhibited the highest internal consistency, with a Cronbach’s Alpha  
of 0.888 across 10 items. These findings confirm that the measurement instruments are reliable and consistent,  
providing confidence in the precision of data collection. The high reliability of these scales establishes a strong  
foundation for further research in the main study.  
Table I Summary of reliability analysis of independent and dependent variables  
Variables  
Cronbach Alpha  
0.741  
No of Items  
Regulatory challenges  
Financial challenges  
5
0.803  
5
Market challenges  
0.763  
5
Technology and infrastructure challenges  
Knowledge management challenges  
Business growth  
0.798  
5
0.746  
5
0.888  
10  
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ANOVA Analysis  
In this study context, ANOVA can be used to determine the difficulties faced by various green entrepreneurship  
sectors, such as renewable energy, sustainable agriculture, and eco-friendly products. This would enable  
understanding whether specific limitations, such as budgetary constraints, regulatory hurdles, or technological  
challenges, differ considerably among various sectors. By doing ANOVA, the researcher can test the hypothesis  
that the problems faced by green entrepreneurs in these sectors are diverse, thereby offering Significant Insights  
For Sector-Specific Strategies.  
Table II Multiple Comparison (Anova) Analysis  
Significant value  
Variable  
Renewable energy Eco-friendly product Sustainable agriculture  
Regulatory  
0.035  
0.033  
0.242  
0.859  
0.067  
0.21  
0.035  
0.304  
0.242  
0.237  
0.765  
Financial  
0.033  
0.23  
Market  
Technology and infrastructure  
Knowledge management  
0.859  
0.373  
This table presents the results of the ANOVA multiple comparison analysis across three business sectors:  
renewable energy, eco-friendly products, and sustainable agriculture. The independent variables examined  
include regulatory, financial, market, technological, and infrastructural aspects, as well as knowledge  
management challenges.  
The analysis reveals that regulatory challenges differ significantly across sectors, with significant values of 0.035  
for renewable energy and sustainable agriculture, indicating sectoral differences in how regulatory issues are  
experienced. Financial challenges also exhibit significant differences in the renewable energy (0.033) and eco-  
friendly product sectors (0.033), whereas the sustainable agriculture sector (0.304) does not show significant  
differences.  
No significant differences were observed for market challenges across any of the sectors, with p-values  
exceeding 0.05 (0.242–0.242). Similarly, technology and infrastructure challenges were not significantly  
different for renewable energy (0.859) and eco-friendly products (0.859), though sustainable agriculture showed  
a lower value (0.237), which remains above the standard significance threshold. Finally, knowledge management  
challenges did not show significant differences across sectors, with p-values ranging from 0.067 to 0.765.  
Overall, the ANOVA results suggest that while regulatory and financial challenges vary significantly between  
certain sectors, other challenges, including market, technology, and knowledge management, are perceived  
relatively similarly across the selected green business sectors. These findings offer insight into sector-specific  
barriers that affect green entrepreneurship and may inform targeted strategies for business growth and innovation  
adoption.  
Multiple Regression Analysis  
By determining the association between the important variables in this study, multiple regression analysis  
accomplishes its goal. This multiple regression technique is also used to determine a straight line that illustrates  
the relationship between the independent variables and the dependent variable in this study.  
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Table III Model Summary  
Model  
1
R
R Square Adjusted R Square  
0.607 0.602  
Std. Error of the Estimate  
0.55768  
Durbin-Watson  
1.782  
0.779  
The table indicates that the R-squared value of 0.607 suggests that approximately 60.7% of the variance in  
business growth is explained by the combined effect of the independent variables. The adjusted R-squared value  
of 0.602 accounts for the number of predictors in the model and confirms that the model provides a good fit to  
the data. The standard error of the estimate (0.55768) indicates the average distance that the observed values fall  
from the regression line. Finally, the Durbin-Watson value of 1.782 is close to 2, indicating that There Is No  
Significant Autocorrelation In The Residuals, And The Assumption Of Independence Is Reasonably Met.  
Table IV Anova  
Model  
1
Source  
Sum of Squares  
177.842  
df  
Mean Square  
35.568  
F
Sig.  
Regression  
Residual  
Total  
5
114.365  
<0.001  
115.073  
370  
375  
0.311  
292.915  
The ANOVA results indicate that the regression model is statistically significant in predicting business growth  
based on the independent variables. The F-value of 114.365 with a p-value < 0.001 demonstrates that the overall  
model explains a significant portion of the variance in business growth. Specifically, the regression sum of  
squares is 177.842, while the residual sum of squares is 115.073, resulting in a total sum of squares of 292.915.  
This confirms that the model provides a strong fit and that the independent variables collectively have a  
significant effect on business growth.  
Table V Coefficients  
Variable  
B
0.604  
Std. Error  
0.164  
Beta  
–
t
Sig.  
(Constant)  
Regulatory  
Financial  
Market  
3.675  
3.321  
8.81  
2.893  
3.358  
<0.001  
<0.001  
<0.001  
0.004  
0.209  
0.063  
0.188  
0.443  
0.164  
0.183  
0.419  
0.048  
0.168  
0.058  
Technology  
& 0.187  
0.056  
<0.001  
Infrastructure  
Knowledge Management  
-0.14  
0.047  
-0.141  
-2.999  
0.003  
Based on the results, the multiple regression analysis indicates that regulatory, financial, market, technology,  
infrastructure, and knowledge management challenges significantly influence business growth. Regulatory  
challenges have a positive impact on growth (B = 0.209, β = 0.188, p < 0.001), suggesting that firms that  
effectively manage regulatory requirements tend to experience growth. Financial challenges have the strongest  
positive impact (B = 0.419, β = 0.443, p < 0.001), highlighting the importance of financial resources and  
management. Market challenges (B = 0.168, β = 0.164, p = 0.004) and technology and infrastructure challenges  
(B = 0.187, β = 0.183, p < 0.001) also positively contribute to growth. Conversely, knowledge management  
challenges have a negative impact on growth (B = -0.140, β = -0.141, p = 0.003), suggesting that gaps in  
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knowledge management can hinder business performance.  
Table VI Hypothesis  
Hypothesis  
p-value  
Decision  
Support  
H1: Regulatory challenges significantly impact Malaysia's growth and 0.001  
sustainability of green entrepreneurship businesses.  
H2: Financial challenges significantly impact Malaysia's growth and sustainability 0.001  
of green entrepreneurship businesses.  
Support  
Support  
Support  
Support  
H3: Market challenges significantly impact Malaysia's growth and sustainability of 0.004  
green entrepreneurship businesses.  
H4: Technology and infrastructure challenges significantly impact Malaysia's 0.001  
growth and sustainability of green entrepreneurship businesses.  
H5: Knowledge management challenges significantly impact Malaysia's growth 0.003  
and sustainability of green entrepreneurship businesses.  
DISCUSSION  
This study identified regulatory, financial, market, technological, and infrastructure barriers, as well as  
knowledge management challenges, as the primary obstacles to green entrepreneurship in Malaysia. Regulatory  
challenges emerged as the most significant obstacle, reflecting complex, inconsistent, or outdated frameworks  
that slow down licensing, compliance, and operational processes. Financial constraints were the second most  
pressing challenge, as green businesses, particularly SMEs, struggle to secure funding for sustainable  
infrastructure, advanced technologies, and innovative operations. Technology and infrastructure barriers further  
compounded these difficulties by limiting access to cost-effective, state-of-the-art solutions necessary for  
sustainable production and operational efficiency. Knowledge management gaps also negatively impacted  
business growth, as entrepreneurs often lack access to critical information, training, and expertise needed to  
innovate and remain competitive. Although market challenges were comparatively less significant, low  
consumer awareness and competition from conventional products still hindered market penetration and scaling.  
The study also revealed that the impact of these barriers varied across green entrepreneurship sectors. Renewable  
energy and sustainable agriculture sectors were disproportionately affected by regulatory constraints, while  
financial challenges were particularly pronounced in the renewable energy and eco-friendly product sectors.  
Sustainable agriculture faced additional challenges related to market access and specialized knowledge,  
including organic cultivation methods and resource-efficient practices. Eco-friendly product businesses  
struggled mainly with securing investment for product development, branding, and market education. These  
sector-specific differences suggest that a one-size-fits-all approach is insufficient, and interventions must be  
tailored to address the unique challenges faced by each industry.  
Multiple regression analysis demonstrated the significance of these barriers in influencing business growth and  
sustainability. Financial barriers had the most significant impact, underscoring the critical need for access to  
capital, specialized funding, and supportive financial policies. Regulatory constraints were also influential,  
emphasizing the importance of simplifying laws, providing incentives, and creating a supportive policy  
environment for green enterprises. Technology and infrastructure limitations, as well as market challenges, were  
found to significantly affect operational efficiency and competitiveness. Knowledge management barriers were  
negatively associated with business growth, confirming that limited expertise, restricted information access, and  
inadequate skill development hinder innovation and long-term success. Collectively, these predictors explained  
60.7% of the variance in business growth, underscoring the close relationship between overcoming these  
challenges and achieving sustainable development.  
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INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)  
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XI November 2025  
In summary, the study highlights that financial, regulatory, and knowledge management barriers are the most  
critical factors affecting green entrepreneurship in Malaysia, while technological, market, and infrastructure  
challenges also play important roles. Addressing these barriers requires coordinated strategies, including policy  
reforms, financial support, training programs, and initiatives to enhance knowledge management systems.  
Sector-specific interventions are particularly necessary to ensure tailored solutions for renewable energy,  
sustainable agriculture, and eco-friendly product businesses. By mitigating these challenges, policymakers and  
stakeholders can promote sustainable business growth, foster innovation, and strengthen Malaysia’s position as  
a leader in environmentally responsible entrepreneurship.  
CONCLUSIONS  
This study offers a comprehensive understanding of the challenges facing green entrepreneurship in Malaysia,  
highlighting the crucial role of knowledge management in promoting sustainable business growth and  
innovation. Ineffective knowledge management processes were found to hinder green innovation and long-term  
sustainability, underscoring the need for strategies that promote the collection, dissemination, and effective  
implementation of information. Additionally, internal and external barriers, such as financial constraints,  
regulatory complexity, and technical limitations, were identified as significant obstacles that entrepreneurs must  
overcome to achieve green business objectives. These findings underscore the importance of a holistic approach  
that combines organizational, financial, and technical interventions to support green entrepreneurship.  
From a theoretical perspective, the study contributes to the understanding of how knowledge management and  
sustainable practices interact to enhance green innovation. By reinforcing the principles of the Natural Resource-  
Based View (NRBV) and the Dynamic Capabilities View (DCV), the research demonstrates that intangible  
assets, such as knowledge and capabilities, are essential for achieving a competitive advantage in green  
entrepreneurship. The study further illustrates how Green Entrepreneurial Orientation (GEO) and Green  
Absorptive Capacity (GAC) serve as key mechanisms for translating knowledge into tangible business and  
environmental outcomes. These contributions lay a strong foundation for future research that explores the  
strategic integration of knowledge management into sustainability initiatives.  
At the managerial level, the study offers practical guidance for enhancing green business performance. Managers  
are encouraged to cultivate GEO within their organizations and strengthen GAC by investing in training,  
development, and systems that facilitate the acquisition and application of external green knowledge. These  
strategies enable businesses to proactively address environmental challenges, improve operational efficiency,  
and achieve compliance while maintaining a competitive advantage. Furthermore, sector-specific insights  
suggest that interventions should be tailored to industry-specific challenges, such as developing financial models  
for renewable energy, providing market education for eco-friendly products, and offering technical support for  
sustainable agriculture.  
Finally, the research highlights avenues for future exploration, including longitudinal studies to examine the  
long-term impacts of GEO on business and environmental performance, sectoral comparative studies, and  
investigations into the influence of external factors such as government policies, market trends, and technological  
advancements. Additionally, the potential of digital solutions, including AI-driven analytics and knowledge-  
sharing platforms, presents new opportunities to enhance green entrepreneurship. By addressing these research  
gaps, scholars and practitioners can develop more effective strategies to foster innovation, competitiveness, and  
sustainability in Malaysia’s green business sector.  
ACKNOWLEDGMENT  
Special thanks are extended to all personnel and individuals who contributed to this research. The author also  
wishes to thank Universiti Teknikal Malaysia Melaka (UTeM) for their support.  
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