Unlocking Export Performance: The Mediating Power Of Competitive Advantage For Indonesian Smes

Abstract

Micro, Small, and Medium Enterprises (MSMEs) contribute greatly to the national economy, but their involvement in exports is still minimal. This study analyzes the effect of export capabilities on MSME performance with competitive advantage as a mediating variable. The six capabilities analyzed include market intelligence, product innovation, pricing, marketing communication, distribution, and product development capability. This study used a quantitative approach with the Partial Least Squares Structural Equation Modeling (PLS-SEM) method, involving 250 export MSME actors selected through purposive sampling. Data were collected through questionnaires and analyzed using SmartPLS 4.0. The results showed that five of the six export capabilities - except product innovation capability - have a significant effect on competitive advantage. Competitive advantage itself is proven to have a strong effect on MSME performance and mediates the relationship between several export capabilities and that performance. A significant positive mediation effect was found in market intelligence (0.501), marketing communication (0.506), and distribution capability (0.338). However, pricing and product development capability showed a negative mediation effect. This research provides practical contributions for MSMEs and policy makers in designing strategies to increase export competitiveness. The development of capabilities such as distribution, marketing communications, and market intelligence needs to be prioritized.