The Role of Digital Capabilities and Corporate Social Responsibility on Sustainable Competitive Advantage: The Moderating Effect of Green Entrepreneurship Orientation on MSMEs in Kendari City

Abstract

Amidst increasingly intense competition and growing demands for sustainable business practices, micro, small, and medium enterprises (MSMEs) are faced with the need to build a sustainable competitive advantage over the long term. Several previous studies have highlighted the role of digital capabilities and corporate social responsibility as important factors in creating competitive advantage. However, understanding the conditions that influence the effectiveness of these two factors in driving sustainable competitive advantage remains relatively limited, particularly in the context of MSMEs in developing countries. Based on the resource-based view and stakeholder theory framework, this study aims to analyze the influence of digital capabilities and corporate social responsibility on sustainable competitive advantage. In addition, this study also explores the role of green entrepreneurial orientation as a moderating variable in this relationship. This study uses a quantitative approach with a survey method, involving 205 MSMEs in Kendari City, Indonesia. The collected data were analyzed using the Partial Least Squares Structural Equation Modeling (PLS-SEM) version 4.0. The research findings indicate that digital capabilities have a positive and significant influence on the sustainable competitive advantage of MSMEs. Furthermore, corporate social responsibility has been shown to positively contribute to enhancing sustainable competitive advantage, with this influence being further strengthened when supported by a green entrepreneurial orientation. However, the analysis shows that green entrepreneurial orientation does not act as a moderating variable in the relationship between digital capabilities and sustainable competitive advantage. These findings provide theoretical and practical implications for developing MSME sustainability strategies.