The Role of Government Policy in the Relationship Between Specialization Strategy and Business Resilience: Evidence from Indonesia’s Cosmetic Raw Materials Industry

This study examines how government policy shapes the relationship between specialization strategy and business resilience in Indonesia’s cosmetic raw-materials industry. Drawing on the Resource-Based View and resilience theory, cross-sectional survey data from 189 key informants, each representing one supplier firm, were analyzed using partial least squares structural equation modeling. Specialization Strategy was positively and significantly associated with Business Resilience (β = 0.271, t = 5.286, p < 0.001), and Government Policy also showed a positive direct association with Business Resilience (β = 0.240, t = 4.421, p < 0.001). The interaction between Government Policy and Specialization Strategy was negative and significant (β = −0.089, t = 4.605, p < 0.001), indicating that stronger perceived policy support attenuated, rather than reversed, the positive relationship between Specialization Strategy and Business Resilience. The findings therefore indicate a dual policy role: Government Policy was positively associated with Business Resilience overall, while higher perceived policy support reduced the marginal contribution of Specialization Strategy to resilience. The study contributes to strategic management and administrative science by integrating firm-specific capabilities with external policy conditions in an import-dependent emerging economy. The findings also suggest that industrial policy may be more effective when support instruments are differentiated, adaptive, and aligned with the strategic and operational characteristics of affected firms.