Sustainability Innovation, Firm Competitiveness, Export Performance, and Sales Growth: A System Dynamics Approach

Abstract

In recent times, the interplay between sustainability innovation, firm competitiveness, export performance, and sales growth has garnered significant attention. Research on sustainable innovation's effects on firm competitiveness, export performance, and sales growth remains limited, especially concerning specific contexts like Halal Micro, Small, and Medium Enterprises (MSMEs). The study proposes to bridge this gap by developing a System Dynamics model that considers firm competitiveness, sales growth, export performance, and sustainable innovation. This research uses the system dynamic method which is carried out in four stages. The first stage, analyzing the system mechanism for sustainable innovation, the second stage, building correlations between variables in the system for sustainable innovation, the third stage, developing a causal loop diagram for sustainable innovation, the fourth stage, conclusions and research suggestions. The interconnectedness of firm competitiveness, export performance, and sales growth is emphasized, with the need for further empirical research in understanding these dynamics comprehensively. Thus, the integration of sustainable innovation into business strategies warrants empirical exploration to fully grasp its real-world implications across industries and regions.