How Do Indonesia Firms Encounter Covid-19 Pandemic? An Evidence of Transformation of the Roots of Competitive Advantage from EMDE Country

Abstract

Scholars found factors contributing to competitive advantages, including dynamic capabilities and distinctive competencies. However, these factors are occasionally fail to perform optimally due to turbulent situations, current global pandemic. Hence, this situation makes it increasingly difficult to sustain a competitive advantage. As a result, this study aims to develop a new root of competitive advantage for the pandemic period. This study hypothesizes that pandemic leadership and resilience system will strengthen the intercourse between distinctive competencies and competitive advantage. This study provides a powerful method by including curvilinear into the moderate effect of pandemic resilience management, a new term created by combining pandemic leadership with resilience system. We use structural equation modelling to evaluate our proposed model on a sample of 200 Indonesia multinational firms. Additionally, a robustness test was performed to evaluate results and demonstrate the model application simulated under a variety of different scenarios. The findings show a positive relationship between dynamic capabilities and competitive advantage through distinctive competencies. furthermore, pandemic leadership and resilience system moderate the relationship between distinctive competencies and competitive advantage in a beneficial way. Pandemic resilience management was confirmed to have moderate role in the relationship between distinctive competencies and competitive advantage with the ∪-shape curvilinear model.