<![CDATA[This study examines the mediating role of sustainable entrepreneurship in the relationship between self-efficacy, individual entrepreneurial orientation (IEO), and firm performance in the wood processing industry in Lumajang Regency, Indonesia. The study addresses the trade-offs faced by resource-based industries between economic performance, environmental sustainability, and regulatory compliance, while filling a research gap by examining these relationships simultaneously. Data were collected from 114 wood processing companies and analyzed using partial least squares structural equation modeling (PLS-SEM). The results show that IEO has a positive and significant effect on sustainable entrepreneurship, whereas self-efficacy has a positive but insignificant effect. Sustainable entrepreneurship has a positive and significant effect on firm performance, while self-efficacy also has a significant direct effect on firm performance. In contrast, IEO does not have a significant direct effect on firm performance. Mediation analysis indicates that sustainable entrepreneurship does not mediate the relationship between self-efficacy and firm performance, indicating a direct-only effect. However, sustainable entrepreneurship significantly mediates the relationship between IEO and firm performance through an indirect-only effect. This study integrates social cognitive theory, entrepreneurial orientation, and the resource-based view, demonstrating that sustainable entrepreneurship functions as a strategic mechanism for improving firm performance in resource-based industries. The findings provide practical implications for developing adaptive and sustainable business strategies.]]>
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