A Resource-Based and Dynamic Capabilities Perspective on Batik SME Performance: The Sequential Mediating Roles of Digital Marketing and Innovation Capability
DOI:
https://doi.org/10.62794/ijober.v4i2.255Keywords:
Entrepreneurial capability, Digital marketing, Innovation, Business performance, Serial mediationAbstract
This study investigates the relationships between entrepreneurial capability, Digital Marketing Capability (DMC), Innovation Capability (IC), and Business Performance (BP) in batik SMEs. Based on the Resource-Based View (RBV) and Dynamic Capabilities Theory (DCT), it proposes a serial mediation model in which DMC and IC elucidate the link among EC and business performance. A quantitative cross-sectional survey was conducted among owners of batik SMEs in Central Java, Indonesia. Using purposive sampling, 380 valid responses were collected and analyzed using Structural Equation Modeling (SEM-AMOS). The proposed mediation effects were evaluated using a bootstrapping procedure. The results reveals that EC is positively associated with DMC, IC, and BP. DMC and IC are also positively effects with business performance. Bootstrapping results support the sequential mediating roles of DMC and IC in linking EC to business performance. This study extends RBV and DCT by empirically validating a serial mediation model that explains how EC is translated into BP through the sequential development of DMC and IC. The findings provide new evidence from batik SMEs in Indonesia, an underexplored context in the capability and digital marketing literature.
References
Abbas, J., Balsalobre-Lorente, D., Amjid, M. A., Al-Sulaiti, K., Al-Sulaiti, I., & Aldereai, O. (2024). Financial innovation and digitalization promote business growth: The interplay of green technology innovation, product market competition and firm performance. Innovation and Green Development, 3(1), 100111. https://doi.org/10.1016/j.igd.2023.100111
Abrokwah-Larbi, K., & Awuku-Larbi, Y. (2023). The impact of artificial intelligence in marketing on the performance of business organizations: evidence from SMEs in an emerging economy. Journal of Entrepreneurship in Emerging Economies, February. https://doi.org/10.1108/JEEE-07-2022-0207
Agyapong, A., Ayentimi, D. T., & Sandow, J. N. (2026). The impact of IT capability on the performance of SMEs in Ghana: the mediating role of business process agility. Technology Analysis & Strategic Management, 38(1), 33–48. https://doi.org/10.1080/09537325.2024.2322022
Antenozio, L., Marques, P., & Bikfalvi, A. (2026). Digital orientation and performance in innovative SMEs: exploring the (curvi)linear effects. Technovation, 151, 103478. https://doi.org/10.1016/j.technovation.2026.103478
Apasrawirote, D., Yawised, K., & Muneesawang, P. (2022). Digital marketing capability: the mystery of business capabilities. Marketing Intelligence and Planning, 40(4), 477–496. https://doi.org/10.1108/MIP-11-2021-0399
Asadullah, A., & Faik, I. (2026). How digital platform-provided resources enable SMEs to develop organizational capabilities: An organizational learning perspective. International Journal of Information Management, 88, 103041. https://doi.org/10.1016/j.ijinfomgt.2026.103041
Bansal, A., Panchal, T., Jabeen, F., Kumar, S., & Singh, G. (2023). A study of human resource digital transformation ( HRDT): A phenomenon of innovation capability led by digital and individual factors. Journal of Business Research, 157(December 2022), 113611. https://doi.org/10.1016/j.jbusres.2022.113611
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
Barney, J. B., Ketchen, D. J., & Wright, M. (2021). Resource-Based Theory and the Value Creation Framework. Journal of Management, 47(7), 1936–1955. https://doi.org/10.1177/01492063211021655
Bekele, H. & Raj, S. (2025). Digitalization and digital transformation in the tourism industry: A bibliometric review and research agenda. Tourism Review, 80(4), 894–913. https://doi.org/10.1108/TR-07-2023-0509
Bhatti, S. H., Sumbal, M. S., & Ahmed, A. (2025). Digital strategy for firm performance-mediating role of digital platform capabilities and digital culture in manufacturing SMEs. Technology Analysis & Strategic Management, 37(1), 2068–2082. https://doi.org/10.1080/09537325.2024.2339379
Buraiki, W. Al, & Nofal, R. (2026). Entrepreneurial orientation and marketing performance in SMEs : The mediating roles of digital marketing capabilities and digital marketing implementation in Oman. Sustainability (Switzerland), 18(4), 1925. https://doi.org/10.3390/su18041925
Chinakidzwa, M., & Phiri, M. (2020). Impact of digital marketing capabilities on market performance of small to medium enterprise agro-processors in Harare, Zimbabwe. Business: Theory and Practice, 21(2), 746–757. https://doi.org/10.3846/btp.2020.12149
Danzen, O. B. (2022). Measuring the level of digital marketing capabilities, digital marketing strategies and challenges and issues of SMEs in adopting digital marketing. Journal of Marketing Advances and Practices (JMAP), 4(1), 79–96. https://www.researchgate.net/publication/359229894
Elgarhy, S. D., & Abou-Shouk, M. (2023). Effects of entrepreneurial orientation, marketing, and innovation capabilities, on market performance: the mediating effect of sustainable competitive advantage. International Journal of Contemporary Hospitality Management, 35(6), 1986–2004. https://doi.org/10.1108/IJCHM-04-2022-0508
Fernandes, C. I., Ferreira, J. J. M., & Veiga, P. M. (2025). Dynamic capabilities as a moderator: enhancing the international performance of SMEs with international entrepreneurial orientation. Review of Managerial Science, 19(4), 1073–1094. https://doi.org/10.1007/s11846-024-00784-8
Gomes, G., Seman, L. O., Berndt, A. C., & Bogoni, N. (2022). The role of entrepreneurial orientation, organizational learning capability and service innovation in organizational performance. Revista de Gestão, 29(1), 39–54. https://doi.org/10.1108/REGE-11-2020-0103
Hair, J. F., Jr., Black, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate data analysis (8th ed.). Cengage Learning.
Hashim, N., Taleb, T. S. T., & Faudzi, M. S. (2023). Entrepreneurial bricolage and micro-business performance: A moderated mediation of innovation capability and digital marketing capabilities marketing capabilities. Journal of Strategic Marketing, 00(00), 1–16. https://doi.org/10.1080/0965254X.2023.2216203
Hat, N. D., Tan, K., Lam, N., Vi, N., Phu, N. A., & Ting, H. (2025). The Influence of customer relationship management in enhancing hospitality business performance : The conditional mediation of digital marketing capabilities. International Journal of Hospitality & Tourism Administration, 26(3), 520–546. https://doi.org/10.1080/15256480.2024.2346142
Hernández-Perlines, F., Millán-Atenciano, M. A., & Ribeiro-Navarrete, S. (2026). Family business performance: the role of dynamic capabilities, entrepreneurial orientation, and socioemotional wealth. Review of Managerial Science, 1–56. https://doi.org/10.1007/s11846-026-00992-4
Hidayati, H. A., Astuti, E. S., & Kusumawati, A. (2025). The nexus between entrepreneurial and market orientation on digital marketing capabilities and marketing performance of SMEs in emerging markets. Cogent Business & Management, 12(1), 2526150. https://doi.org/10.1080/23311975.2025.2526150
Holopainen, M., Saunila, M., Rantala, T., & Juhani Ukko. (2026). Striving for sustainability performance through digital platforms and advanced collaboration in digital transformation. Business Strategy and the Environment, 33, 665–680. https://doi.org/10.1002/bse.70201
Hussein, A. S., Kartikasari, A., Hapsari, R., Yudha, K., & Wahyuli, E. F. (2026). From heritage to high-tech: Digital strategies for sustainable growth in Indonesian batik SMEs. Cogent Business & Management, 13(1), 2607803. https://doi.org/10.1080/23311975.2025.2607803
Kim, J., & Jin, W. (2024). Impact of digital capabilities on entrepreneurial performance in SMEs. Journal of Innovation & Knowledge, 9(4), 100609. https://doi.org/10.1016/j.jik.2024.100609
Koliby, I. S. Al, Mehat, N. A. B., Al-Swidi, A. K., & Al-Hakimi, M. A. (2024). Unveiling the linkages between entrepreneurial culture, innovation capability, digital marketing capability and sustainable competitive performance of manufacturing SMEs: evidence fromemerging countries. The Bottom Line, 37(4), 473–500. https://doi.org/10.1108/BL-08-2023-0241
Lestari, S. D., Leon, F. M., Widyastuti, S., Brabo, N. A., & Putra, A. H. P. K. (2020). Antecedents and consequences of innovation and business strategy on performance and competitive advantage of SMEs. Journal of Asian Finance, Economics and Business, 7(6), 365–378. https://doi.org/10.13106/JAFEB.2020.VOL7.NO6.365
Masrianto, A., Hartoyo, H., Hubeis, A. V. S., & Hasanah, N. (2022). Digital marketing utilization index for evaluating and improving company digital marketing capability. Journal of Open Innovation: Technology, Market, and Complexity, 8(3), 153. https://doi.org/10.3390/joitmc8030153
Mulyana, M., Nurhayati, T., & Putri, E. R. P. (2024). Improvement of marketing performance: Role of market sensing, digital marketing, and value creation ambidexterity. Contaduria y Administracion, 69(2), 235–259. https://doi.org/10.22201/fca.24488410e.2024.5017
Munir, A. R., Kadir, N., Umar, F., & Lyas, G. B. (2023). The impact of digital marketing and brand articulating capability for enhancing marketing capability. International Journal of Data and Network Science, 7(1), 65–72. https://doi.org/10.5267/j.ijdns.2022.12.005
Musah, A., Emilson, D., & Okyere, B. (2026). The moderating role of entrepreneurial orientation in the relationship between digital transformation, corporate tax reputation, and tax compliance among SMEs. Sustainable Futures, 11, 101641. https://doi.org/10.1016/j.sftr.2025.101641
Nahar, S., & Alam, M. (2026). Technology- enabled cross-border entrepreneurship: The role of digital platforms in SME expansion through the lens of institutional theory. Thunderbird International Business Review, 1–24. https://doi.org/https://doi.org/10.1002/tie.70093
Ngo, T. T., & Vu, T. H. (2025). The impacts of psychological capital , risk-taking propensity , and entrepreneurial competence on the sustainability performance of SMEs and entrepreneurial competence on the sustainability. Cogent Business & Management, 12(1), 2466810. https://doi.org/10.1080/23311975.2025.2466810
Phuong, L. N., Tuan, K. C., Duc, N. N., & Thi, U. N. (2022). The Impact of absorption capability, innovation capability, and branding capability on firm performance—An empirical study on Vietnamese retail firms. Sustainability (Switzerland), 14(11). https://doi.org/10.3390/su14116422
Qiu, L., Jie, X., Wang, Y., & Zhao, M. (2020). Green product innovation, green dynamic capability, and competitive advantage: Evidence from Chinese manufacturing enterprises. Corporate Social Responsibility and Environmental Management, 27(1), 146–165. https://doi.org/10.1002/csr.1780
Ramadani, A. N., Riptiono, S., & Wibawanto, S. (2025). The role of marketing ambidexterity to upscaling SME’s business performance. Journal of Management and Entrepreneurship, 27(1), 43–52. https://doi.org/10.9744/jmk.27.1.43-52
Rhamdhani, I. M., & Riptiono, S. (2023). Menguji niat konsumen menggunakan layanan bank digital di Jawa Tengah : Perpanjangan modeL UTAUT2. Jurnal Ilmiah Manajemen Fakultas Ekonom, 9(2), 81–94. https://doi.org/10.34203/jimfe.v9i2.8484
Ribau, C. P., Mereira, A. C., & Raposo, M. (2017). SMEs innovation capabilities and export performance: an entrepreneurial orientation view. Journal of Business Economics and Management, 18(5), 920–934. https://doi.org/10.3846/16111699.2017.1352534
Robertson, J., Caruana, A., & Ferreira, C. (2023). Innovation performance: The effect of knowledge-based dynamic capabilities in cross-country innovation ecosystems. International Business Review, 32(2), 101866. https://doi.org/10.1016/j.ibusrev.2021.101866
Sackey, B. B., Jingzhao, Y., & Asumah, S. (2026). The role of digital marketing and employee engagement in driving organizational resilience: evidence from turbulent markets in an emerging economy. Cogent Business & Management, 13(1). https://doi.org/10.1080/23311975.2025.2612413
Saeed, M., Adiguzel, Z., Shafique, I., Kalyar, M. N., & Abrudan, D. B. (2023). Big data analytics-enabled dynamic capabilities and firm performance: examining the roles of marketing ambidexterity and environmental dynamism. Business Process Management Journal, 29(4), 1204–1226. https://doi.org/10.1108/BPMJ-01-2023-0015
Salah, O. H., & Ayyash, M. M. (2024). E-commerce adoption by SMEs and its effect on marketing performance: An extended of TOE framework with ai integration, innovation culture, and customer tech-savviness. Journal of Open Innovation: Technology, Market, and Complexity, 10(1), 100183. https://doi.org/10.1016/j.joitmc.2023.100183
Salamzadeh, A., Mortazavi, S., Hadizadeh, M., & Braga, V. (2023). Examining the effect of business model innovation on crisis management: the mediating role of entrepreneurial capability, resilience and business performance. Innovation & Management Review, 20(2), 132–146. https://doi.org/10.1108/INMR-11-2021-0213
Santos-Vijande, M. L., López-Sánchez, J. Á., Loredo, E., Rudd, J., & López-Mielgo, N. (2022). Role of innovation and architectural marketing capabilities in channelling entrepreneurship into performance. Journal of Innovation and Knowledge, 7(2). https://doi.org/10.1016/j.jik.2022.100174
Sari, D., Kusuma, B. A., Sihotang, J., Febrianti, T., Sari, D., Kusuma, B. A., Sihotang, J., & The, T. F. (2023). The role of entrepreneurial marketing & innovation capability in the performance of SMEs during covid-19 pandemic: Evidence of MSMEs in West Java. Cogent Business & Management, 10(1). https://doi.org/10.1080/23311975.2023.2194091
Scuotto, V., Del Giudice, M., & Carayannis, E. G. (2017). The effect of social networking sites and absorptive capacity on SMES’ innovation performance. Journal of Technology Transfer, 42(2), 409–424. https://doi.org/10.1007/s10961-016-9517-0
Shafik, N. S., Ragheb, M. A., Omar, F., & Sadek, H. H. (2024). Influence of innovation capabilities and customer experience on loyalty: Empirical study in the Egyptian private hospitals. Arab Journal of Administration, 44(6), 1–14. https://doi.org/10.21608/aja.2024.273726.1601
Somwethee, P., Aujirapongpan, S., & Ru-zhue, J. (2023). The influence of entrepreneurial capability and innovation capability on sustainable organization performance: Evidence of community enterprise in Thailand. Journal of Open Innovation: Technology, Market,and Complexity, 9(May), 100082. https://doi.org/10.1016/j.joitmc.2023.100082
Somwethee, P., Ru-zhue, J., & Aujirapongpan, S. (2025). Developing social entrepreneurial capability in Thai community enterprises: The roles of intellectual capital, creating shared value , and organizational agility on sustainability. Social Sciences & Humanities Open, 11, 101269. https://doi.org/10.1016/j.ssaho.2024.101269
Tapanainen, T., Dao, K. T., Thanh, H. N. T., Nguyen, H. T., Dang, N. B., & Nguyen, N. D. (2022). Impact of dynamic capabilities and firm characteristics on the firm performance of Vietnamese small and medium-sized retail enterprises. International Journal of Management and Enterprise Development, 21(1), 28–61. https://doi.org/10.1504/IJMED.2022.120539
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7%3C509::AID-SMJ882%3E3.0.CO;2-Z
Truong, M. C., Gia, N., Tran, K., & Pham, Q. T. (2026). Impact of Digital Transformation on Export Performance and Sustainability of SMEs in Vietnam. In Innovating Business and Education for Sustainable Development (pp. 223–252). Cham: Springer Nature Switzerland. https://doi.org/10.1007/978-3-032-10065-8_13
Umar, A., Mohd, C., Che, Z., Sahandri, M., Hamzah, G., & Hashim, A. (2018). The Mediating Effect of Innovation on Entrepreneurial Competencies and Business Success in Malaysian SMEs. International Business Research, 11(8), 142–153. https://doi.org/10.5539/ibr.v11n8p142
Utonga, D., Tundui, C. S., & Mkuna, E. (2026). Harnessing performance through digital technology adoption: an empirical analysis of SMEs in the Tanzanian fruit juice processing industry. Cogent Business & Management, 13(1), 2612771. https://doi.org/10.1080/23311975.2026.2612771
Wang, F. (2020). Digital marketing capabilities in international firms: a relational perspective. International Marketing Review, 37(3), 559–577. https://doi.org/10.1108/IMR-04-2018-0128
Wang, S., & Zhang, H. (2025). Digital transformation and innovation performance in small and medium sized enterprises: A systems perspective on the interplay of digital adoption, digital drive, and digital culture. Systems, 13(1), 43. https://doi.org/10.3390/systems13010043
Wiwoho, G., & Riptiono, S. (2025). Upgrading SME’s marketing performance: adaptive, innovative capability, and isolating mechanism. Jurnal Manajemen, 29(01), 21–41. https://doi.org/10.24912/jm.v29i1.2281
Wongsansukcharoen, J., & Thaweepaiboonwong, J. (2023). Effect of innovations in human resource practices, innovation capabilities, and competitive advantage on small and medium enterprises’ performance in Thailand. European Research on Management and Business Economics, 29(1), 100210. https://doi.org/10.1016/j.iedeen.2022.100210
Yadav, U. S., Vyas, S., Ghosal, I., & Kumar, A. (2024). Impact of entrepreneurial leadership, Social media, digital technology, Entrepreneurial orientation and innovation on business performance in the handicraft sector: Talent management as mediating construct. Journal of Innovation and Entrepreneurship, 13(1), 72. https://doi.org/10.1186/s13731-024-00434-z
Zahara, Z., Ikhsan, Santi, I. N., & Farid. (2023). Entrepreneurial marketing and marketing performance through digital marketing capabilities of SMEs in post-pandemic recovery. Cogent Business and Management, 10(2). https://doi.org/10.1080/23311975.2023.2204592
Zhou, L., Peng, M. Y. P., Shao, L., Yen, H. Y., Lin, K. H., & Anser, M. K. (2021). Ambidexterity in social capital, dynamic capability, and SMEs’ performance: Quadratic effect of dynamic capability and moderating role of market orientation. Frontiers in Psychology, 11(February), 1–15. https://doi.org/10.3389/fpsyg.2020.584969
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Mrs. Intan Muliana Rhamdhani, Dr. Sulis Riptiono

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
