The Impact of Export Capabilities and Competitive Advantage on SME’s International Performance

Small and Medium Enterprises (SMEs) are very influential to the Indonesian economy regarding their contribution to the national GDP and employment. This research aims to examine the impact of export capabilities and competitive advantage to SMEs’ international performance. There is still an inconsistency among previous research on capabilities-competitive advantage-performance relations. This research would confirm which capabilities are the most impactful to SME’s international performance, and examines whether competitive advantage has a mediating role between capabilities and performance. This research uses the quantitative method with 55 respondents from Indonesia, and then the analysis uses PLS-SEM with SmartPLS software. The product innovation does not influence the competitive advantage. Market intelligence, marketing communication, and pricing influence the competitive advantage. Also, the competitive advantage influences international performance but does not have the mediate role between the export capabilities and international performance. Between export capabilities: market communication, pricing, and market intelligence are the most impactful to SMEs’ international performance. SMEs leaders should focus on the resources on those capabilities, while government and academic researchers still support on product innovation