Proceedings of the 24th Malaysia-Indonesia International Conference on Economics, Management, and Accounting (The 24th MIICEMA) in conjunction with The 9th Sriwijaya Economics, Accounting, and Business Conference (The 9th SEABC) (MIICEMA-SEABC 2025)

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Sustainability Competitive Advantage of SME in Indonesia: The Role of Innovation Capability, Government Support, and Green Economy as a Strategic Focus

Authors
Eva Ariesty1, *, Sulastri Sulastri1, K. M. Husni Thamrin1
1Sriwijaya University, Palembang, Indonesia
*Corresponding author. Email: dabukke.82@gmail.com
Corresponding Author
Eva Ariesty
Available Online 23 February 2026.
DOI
10.2991/978-94-6463-994-0_7How to use a DOI?
Keywords
SCA; Innovation Capability; Green Economy; Government Support; SME.First Section
Abstract

This research investigates the impact of innovation capability on sustainable competitive advantage among Indonesian SMEs, taking into account the green economy as a strategic orientation and government support as a moderating factor. The study employs Structural Equation Modeling (SEM) to assess the interrelationships among innovation capability, green economy orientation, government support, and sustainable competitive advantage. Data were gathered through questionnaires administered to 300 SME owners and managers representing various industrial sectors across Indonesia. The findings reveal that innovation capability exerts a significant positive influence on sustainable competitive advantage, and this relationship is further strengthened when SMEs adopt a green economy focus as part of their business strategy. Moreover, government support plays a critical moderating role, amplifying the effect of innovation capability on competitive sustainability. These results underscore the necessity of enhancing innovation practices aligned with green economic principles and emphasize the government’s vital contribution in fostering a supportive business ecosystem for SME sustainability. Both the practical and theoretical implications of this research offer valuable insights for advancing scholarly understanding and policy formulation related to the development of sustainable competitive advantage within Indonesia’s SME sector.

Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 24th Malaysia-Indonesia International Conference on Economics, Management, and Accounting (The 24th MIICEMA) in conjunction with The 9th Sriwijaya Economics, Accounting, and Business Conference (The 9th SEABC) (MIICEMA-SEABC 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
23 February 2026
ISBN
978-94-6463-994-0
ISSN
2352-5428
DOI
10.2991/978-94-6463-994-0_7How to use a DOI?
Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Eva Ariesty
AU  - Sulastri Sulastri
AU  - K. M. Husni Thamrin
PY  - 2026
DA  - 2026/02/23
TI  - Sustainability Competitive Advantage of SME in Indonesia: The Role of Innovation Capability, Government Support, and Green Economy as a Strategic Focus
BT  - Proceedings of the 24th Malaysia-Indonesia International Conference on Economics, Management, and Accounting (The 24th MIICEMA) in conjunction with The 9th Sriwijaya Economics, Accounting, and Business Conference (The 9th SEABC) (MIICEMA-SEABC 2025)
PB  - Atlantis Press
SP  - 85
EP  - 97
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-994-0_7
DO  - 10.2991/978-94-6463-994-0_7
ID  - Ariesty2026
ER  -