A causality model of people equity, VRIN resource, social capital, innovation capability and SMEs performance

Abstract

This research purpose is to test and analyze the influence of: 1) people equity, VRIN resources, innovation capability towards SMEs performance; 2) social capital and people equity toward innovation capability; 3) social capital towards people equity; and 4) social capital towards VRIN resources. The population in this research is all group produces of small and medium enterprises (SMEs) in Kasongan Clay Crafts Centers which is the biggest one in Indonesia, located on Bantul Regency, Province of Daerah Istimewa Yogyakarta (DIY). The sampling technique that is used in this research is purposive sampling with amount of sample 237 SMEs. Whereas, statistic technique used in this research is Partial Least Square. Conclusion of this research is: 1) people equity, VRIN resources, and innovation capability have a significant positive result toward innovation capability; 2) social capital and people equity have a significant positive result toward innovation capability; 3) social capital has a significant positive result towards People Equity; 4) social capital has a significant positive result towards VRIN Resources.