(Peer Review + Similarity + Document) SMEs’ Strategies for Improving Financial Performance Through Competitive Advantages

Abstract. This study aims to examine the direct effect of entrepreneurial
orientation and innovation on competitive advantage and the impact of competitive
advantage on the performance of SMEs. Furthermore, this study will also examine
the indirect influence of entrepreneurial orientation and innovation variables
on financial performance through competitive advantage. This is quantitative
research using a survey method. The respondents are SMEs owners in the field of
cultivation industry in Jember regency, Indonesia. This study uses the Structural
Equation Model (SEM) as a data analysis technique, which is assisted by Warp PLS
software. Statistical results show that entrepreneurial orientation and innovation
have a direct effect on competitive advantage. Other results show that there is
a direct effect of competitive advantage on financial performance. A company
is said to have a competitive advantage if it can outperform other companies to
create higher economic value. The results of the indirect effect test show that
entrepreneurial orientation also has an indirect effect on financial performance
through competitive advantage. Furthermore, the results of this study also prove
that innovation affects financial performance through competitive advantage.