THE DETERMINANTS OF SMEs' SUSTAINABILITY

Abstract

Purpose of the study: This study aims to prove the determination of SMEs' sustainability in Madiun's views of intellectual capital and competitive advantage empirically. Methodology: Data was collected using a questionnaire filled out directly by SME entrepreneurs in Madiun, randomly selected by 200 respondents. This study applied quantitative research conducted in two phases. First, perform exploratory factor analysis tests, and the second phase, confirmatory factor analysis using AMOS version 18. Main Findings: The results of the study found that intellectual capital directly did not significantly impact SMEs' sustainability. Intellectual capital significantly affects a competitive advantage. Furthermore, competitive advantages significantly impact SMEs' sustainability. Competitive advantage moderates the impact of intellectual capital on SMEs' sustainability. Applications of this study: The research is expected to be used by SMEs entrepreneurs to improve their business to be more developed and able to compete in the global market by attention to intellectual capital and the competitive advantage of the company. Novelty/Originality of this study: Previous studies revealed that intellectual capital has an impact on competitive advantage and SMEs' performance with a focus on financial aspects. This study to prove the determinants of SMEs' sustainability in Madiun as measured by financial and non-financial elements.