A multi-level study of the antecedents of innovation capability on artisan entrepreneurship

Purpose Innovation capability is a core capability among entrepreneurs, but the factors that determine it remain inconclusive. Using dynamic capability theory with a microfoundation perspective, this study aims to examine the influence of artisan creativity, paradox mindset and cultural identity on innovation capability. It also tests customer orientation as a moderator variable. This study aims to examine the influence of artisan creativity, paradox mindset, and cultural identity on innovation capability among entrepreneurs, drawing on dynamic capability theory from a microfoundation perspective. It also aims to investigate the moderating role of customer orientation in these relationships. Design/methodology/approach The hypotheses were tested empirically using data from 202 teams and 619 artisan entrepreneurs in Indonesia. To analyse the data, a multilevel analysis was conducted using MPlus. Findings Artisan entrepreneurs with a paradox mindset and high individual artisan creativity have greater innovation capabilities. This relationship is stronger when craft entrepreneurs are more customer-orientated. Other findings show that the higher the cultural identity, the greater the ability to innovate and this influence is more substantial when one has a lower customer orientation. The paper further discusses academic and managerial implications. Originality/value This study adopts dynamic capability theory from a microfoundations perspective to explain how individual creativity and cultural identity shape innovation capability in artisan entrepreneurship.