Hatidja, Bahtiar, Jamaluddin, Asriani

The Impact of Dynamic Capabilities on Innovation and Performance of Culinary Creative Enterprises

Introduction

The impact of dynamic capabilities on innovation and performance of culinary creative enterprises. Discover how dynamic capabilities (sensing, seizing, and reconfiguring) enhance innovation & business performance in culinary MSMEs in Central Java, Indonesia.

Abstract

The culinary creative industry is one of the most dynamic and competitive subsectors of the creative economy, particularly in developing economies such as Indonesia. This study examines the impact of dynamic capabilities on innovation and business performance among culinary creative enterprises. Using a quantitative approach with Structural Equation Modeling-Partial Least Squares (SEM-PLS), data were collected from 203 owners and managers of culinary micro, small, and medium enterprises (MSMEs) in Central Java through purposive sampling. Dynamic capabilities were operationalized through three dimensions: sensing, seizing, and reconfiguring. The findings reveal that dynamic capabilities positively and significantly influence innovation (path coefficient = 0.487, p < 0.001) and business performance (path coefficient = 0.312, p < 0.001). Innovation also significantly mediates the relationship between dynamic capabilities and business performance (path coefficient = 0.206, p < 0.001), confirming a partial mediation effect. These results underscore the critical role of cultivating adaptive organizational capabilities as a competitive lever in volatile markets. The study contributes novel empirical evidence from the culinary creative economy context, bridging gaps between dynamic capability theory and creative industry performance in an emerging market setting.

Review

This study delves into a highly pertinent area, examining the impact of dynamic capabilities on innovation and business performance within the culinary creative industry, a vibrant and competitive subsector, particularly in developing economies such as Indonesia. By focusing on culinary micro, small, and medium enterprises (MSMEs), the research addresses a critical need to understand how these organizations can adapt and flourish in volatile market conditions. The paper's stated contribution of bridging the gap between dynamic capability theory and creative industry performance in an emerging market context positions it as a valuable addition to current literature. Methodologically, the authors employed a quantitative approach, utilizing Structural Equation Modeling-Partial Least Squares (SEM-PLS) to analyze data from 203 owners and managers in Central Java. The operationalization of dynamic capabilities through the established dimensions of sensing, seizing, and reconfiguring provides a sound theoretical framework for the empirical investigation. The findings clearly indicate that dynamic capabilities significantly and positively influence both innovation (path coefficient = 0.487, p < 0.001) and overall business performance (path coefficient = 0.312, p < 0.001). Crucially, the study also reveals a significant partial mediation effect of innovation in the relationship between dynamic capabilities and business performance (path coefficient = 0.206, p < 0.001), highlighting innovation as a vital channel for value creation. The implications drawn from these findings are substantial, emphasizing the critical role of adaptive organizational capabilities as a competitive lever in dynamic markets. The empirical evidence from the culinary creative economy offers novel insights, affirming the applicability and importance of dynamic capabilities theory in a practical, industry-specific context. While the use of purposive sampling in a specific region (Central Java) might limit direct generalizability, the study’s clear demonstration of the relationships between dynamic capabilities, innovation, and performance provides a strong foundation for future research and offers valuable guidance for both entrepreneurs and policymakers aiming to foster sustainable growth within the creative economy.

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