Leveraging Business Capacity For Sustainable SME Performance: The Roles Of Social Media Marketing, Strategic Orientation, And Government Regulation

Isnaini Nurkhayanti; Dika Vivi Widyanti; Azizah; Alya Hasna Fauziyyah; Jati Nugroho

doi:10.63922/ijevss.v5i03.5119

Isnaini Nurkhayanti Semarang State Polytechnic, Indonesia
Dika Vivi Widyanti Semarang State Polytechnic, Indonesia
Azizah Semarang State Polytechnic, Indonesia
Alya Hasna Fauziyyah Semarang State Polytechnic, Indonesia
Jati Nugroho Semarang State Polytechnic, Indonesia

DOI: https://doi.org/10.63922/ijevss.v5i03.5119

Keywords: Sustainable Performance, Social Media Marketing, Strategic Orientation, Government Regulation, Business Capacity

Abstract

This study investigates how Social Media Marketing, Strategic Orientation, and Government Regulation contribute to Sustainable Performance through Business Capacity among handicraft SMEs. Drawing upon the Resource-Based View (RBV), the research proposes that organizational capabilities serve as strategic resources that enhance long-term business sustainability. Data were collected from 120 handicraft SMEs operating in Magelang Regency, Indonesia, using purposive sampling. Structural Equation Modeling (SEM) with AMOS was employed to examine both the measurement and structural models. The findings demonstrate that Social Media Marketing, Strategic Orientation, and Government Regulation significantly strengthen Business Capacity, which subsequently improves Sustainable Performance. Furthermore, the three antecedent variables also exhibit direct positive effects on Sustainable Performance. Business Capacity partially mediates these relationships, indicating that internal organizational capability is a critical mechanism through which external strategic initiatives generate sustainability outcomes. This study extends the RBV literature by integrating digital marketing capability, strategic orientation, and regulatory support into a comprehensive sustainability framework for SMEs. The findings provide practical implications for SME managers and policymakers seeking to improve long-term competitiveness and sustainability through capability development.

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