Model Sustainability Competitive Advantage for Manufacturing SMEs: A Structural Equation Modelling Approach

This study aims to analyze the influence of strategic drivers on cleaner production and increasing the sustainable competitiveness of manufacturing Small and medium-sized enterprises (SMEs) in Indonesia. The manufacturing SMEs studied were the Batik cloth and clothing industry. The number of samples in this research was 365 Batik SME entrepreneurs in Indonesia, taken using a purposive sampling method. The analysis data used is Partial Least Square-Structural Equation Modelling (PLS-SEM). This study found that strategic drivers, namely entrepreneurial orientation and management knowledge orientation, directly affect cleaner production and indirectly affect the sustainable competitive advantage of Batik SMEs in Indonesia. Cleaner production, innovation capabilities, and business networks directly influence the sustainable competitive advantage of Batik SMEs in Indonesia. This research contributes to developing a model of sustainable competitive advantage in SMEs using a strategic driver and environmental sustainability approach. This article aims to study the factors influencing sustainable competitive advantage in manufacturing industries in developing countries.