This study fills the gap made by past studies regarding green intellectual capital on competitive advantage and
develops them. This research examines the impact of green intellectual capital on competitive advantage with
Islamic business ethics as the moderating variable. The construct of green intellectual capital is shown by
three dimensions: green human capital, green structural capital, and green human capital. The population of
this study is Muslim batik entrepreneurs. The data was collected through questionnaires distributed to 313
respondents, Muslim batik entrepreneurs, who were selected using purposive sampling method and processed
using interaction regression analysis. This study finds that the three independent variables, i.e. green human
capital, green structural capital, and green relational capital, have significant impacts on the competitive
advantage of small and medium enterprises. Furthermore, Islamic business ethics only moderate the
relationship between green human capital and competitive advantage. In addition, corporate investment in
green intellectual capital not only is demanded by regulation, environmentalists, consumers, competition and
the government but also improves the competitive advantage of small and medium enterprises.
Keywords: green human capital, green structural capital, green relational capital, Islamic business ethics,
competitive advantage