Knowledge Management, Absorptive Capacity, and SME Performance: The Mediating Role of Innovation in the Craft Sector

Ari Sulistyowati, Evan Afandi

Abstract


ABSTRACT
This study aims to examine the influence of knowledge management and absorptive capacity on performance, with innovation as a mediating variable, in the handicraft SME sector. The handicraft SME sector holds great potential for enhancing economic value and the competitiveness of the creative industry; however, it still faces various challenges in knowledge management and innovation development. This study employs a quantitative approach using a survey method. Data collection was conducted by distributing questionnaires to craft SME operators as respondents. Data analysis utilized Structural Equation Modeling based on Partial Least Squares (SEM-PLS) to test the relationships among the study variables. The results indicate that knowledge management and absorptive capacity have a positive effect on innovation. Furthermore, innovation significantly influences performance and acts as a mediating variable in the relationship between knowledge management and absorptive capacity on performance. These findings suggest that the ability of SMEs to manage and absorb knowledge can drive innovation, which in turn enhances performance.

Keywords


Knowledge Management, Absorptive Capacity, Innovation, Performance

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References


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DOI: http://dx.doi.org/10.30813/jbam.v19i1.9865

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