Enhancing the Performance of Indonesian E-Business Start-Ups: The Influence of Innovation Capability and Dynamic Capability

Abstract

Purpose: This study aims to highlight the influence of innovation capability on e-business success by investigating the presence of dynamic capabilities and the impact of government assistance and entrepreneurial orientation in firms. The objective of this research is to enhance the association between dynamic capabilities and the performance of e-business.  Design/methodology/approach: Data was collected from 117 e-commerce startups operating in Indonesia for a duration of less than 5 years. The survey was conducted by disseminating questionnaires by email and Google Form digital channels, and subsequently analyzed using PLS 3.0. Findings: The study found that the effectiveness of the innovation process is a key factor in affecting the dynamic capacities and performance improvement of e-business start-ups. It was determined to be the most significant link between these relationships. Furthermore, government support plays a crucial role in strengthening the link between dynamic capability and the performance of e-businesses.  Practical implications: E-business start-ups and the government should prioritize enhancing their ability to adapt and respond to changing circumstances by investing in training programs and structured initiatives. Additionally, they should aim to improve their capacity for innovation by collaborating with educational institutions and digital communities to develop a skilled workforce. These efforts will ultimately lead to improved performance. Originality/value: This research is expected to fill the gap in knowledge indicated in the literature review and provide a new discovery that improves and complements the research of RBV theory and dynamic capacities, specifically in relation to the performance of e-business start-ups in developing countries.