<![CDATA[This study examines the role of halal–sustainability cognitive drivers in enhancing sustainable competitive advantage and business performance among halal MSMEs in Surabaya. The topic is relevant due to the rapid growth of the global halal industry and the increasing integration of sustainability in business practices. However, many halal MSMEs still face limitations in cognitive capabilities and strategic orientation, which hinder sustainable competitiveness. The research investigates how halal literacy and sustainability literacy influence Sustainable Halal Business Model Innovation (SHBMI), and how SHBMI contributes to competitive advantage and business performance. This study proposes an integrative model linking these variables, which remains underexplored, particularly in developing countries like Indonesia. Using a quantitative cross-sectional approach, data were collected from 250 halal MSMEs and analyzed with PLS-SEM using SmartPLS 4. The results show that both halal literacy and sustainability literacy have a positive and significant effect on SHBMI. Furthermore, SHBMI enhances sustainable competitive advantage and improves business performance, both directly and indirectly.In conclusion, SHBMI serves as a key mechanism connecting cognitive drivers with competitiveness and performance. Strengthening halal and sustainability literacy is therefore essential for MSMEs and policymakers to support long-term business sustainability in the halal sector.]]>
