AI-Driven Entrepreneurial Orientation and Sustainable Green Innovation Toward University Financial Sustainability Through Circular Economy Principles and Green Metrics for Self-Efficacy

Universities worldwide face escalating financial pressures while simultaneously confronting demands to adopt sustainable practices. This study examines whether Sustainable Green Innovation (SGI) serves as the central transmission mechanism through which AI-Driven Entrepreneurial Orientation (AI-DEO) and Green Metrics for Self-Efficacy (GMSE) influence University Financial Sustainability (UFS) in higher education institutions, within the broader framework of Circular Economy Principles (CEP). Cross-sectional survey data were collected from 1279 faculty and staff members at King Faisal University (Saudi Arabia) and Benha University (Egypt) between October 2025 and January 2026. Regression-based structural path analysis with nonparametric bootstrapped mediation testing (5000 resamples) was employed to test four hypotheses. The results show that AI-DEO emerged as the dominant positive predictor of SGI (β = 0.732, p < 0.001), while GMSE did not show a statistically significant association with SGI once AI-DEO was included in the model (β = −0.034, p = 0.246). SGI emerged as the strongest predictor of UFS (β = 0.369, p < 0.001), supporting an innovation-mediated route to financial sustainability. The indirect effect of CEP on SGI through AI-DEO was statistically significant (indirect = 0.3473; 95% CI [0.3123, 0.3835]), supporting full mediation. Hypotheses H1, H2a, H2b, and H3 were supported; H4 was not supported. These findings indicate that financial resilience in universities is primarily innovation-mediated and orientation-driven. The study contributes to the sustainability-in-higher-education literature by clarifying SGI as a central transmission mechanism and highlighting the importance of building operational green competence alongside strategic AI-Driven entrepreneurial orientation.