Do Dynamic Capabilities and Digital Transformation Improve Business Resilience during the COVID-19 Pandemic? Insights from Beekeeping MSMEs in Indonesia

Abstract

This study investigated the influence of Dynamic Capabilities (DC) and Digital Transformation (DT) on Business Resilience During the COVID-19 Pandemic. Using cross-sectional data from 388 micro, small, and medium enterprises (MSMEs) of beekeeping in Indonesia. Furthermore, the data were analyzed by Structural Equation Model (SEM) analysis and executed by SmartPLS 3.0 software. The main results of this study indicate that DC plays an important role in improving MSMEs’ DT. However, the essential role of DT on firm resilience only happened for micro, small, and medium firms of family businesses. However, DT has an insignificant effect on firm resilience in small nonfamily businesses. Yet, the effect of DC on firm resilience is mediated by DT. Nevertheless, our empirical findings indicate heterogeneous effects among micro, small, and medium firms. Based on the study’s findings, we suggested that the policy implication in developing beekeeping firms should be more specific based on the firm scale. The results of this study can be generalized to the national level to inform decision-making regarding the intangible assets of MSME livestock products in developing countries. The findings are also relevant to other livestock products, which tend to be dynamic during a crisis.