Linking Social Capital, Business Environment, Product Innovation, and Sustainable Competitive Advantage: Empirical Evidence from Farmers in Karo Regency, North Sumatra, Indonesia

Maretta Ginting, Hasan Basri Tarmizi, Endang Sulistya Rini, Yeni Absah

2019

Abstract

Competitiveness of Indonesian agricultural commodity products requires more attention from stakeholders. The problems faced by farmers and traders of horticulture products are still low competitiveness. Horticultural products have been unable to compete with agricultural products from ASEAN countries such as Thailand and Malaysia. In a competitive marketplace, social approaches and social attributes and sustainability levels of competitive advantages are, among others, explained through the RBT-resource-based theory of the firm's approach. The purpose of this study is to investigate the effect of several constructs such as social capital, business environment, product innovation towards sustainable competitive advantage. The present study used a quantitative approach based on structural equation modeling (SEM) analysis. The number of samples was 500 farmers from Karo Regency, North Sumatra, Indonesia. The empirical evidence indicates that social capital has an insignificant effect on product innovation. The business environment has a significant effect on product innovation. Social capital has an insignificant effect on sustainable competitive advantage. The business environment has a significant effect on sustainable competitive advantage. The product innovation has a significant effect on sustainable competitive advantage. The business environment has a significant effect on the sustainable competitive advantage of horticultural products through product innovation. Social capital has an insignificant effect on the sustainable competitive advantage of horticultural products through product innovation. The ability to adopt technology should be in line with the ability to respond to the movement of market behavior. Therefore, the role of farmers is expected to be more proactive in observing the direction of changes in the horticultural product market behavior. Export market access is required and standardize product according to market demand. Therefore, learning is needed to empower farmers to achieve a target market that has broad coverage.

Paper Citation

in Harvard Style

Ginting M., Tarmizi H., Rini E. and Absah Y. (2019). Linking Social Capital, Business Environment, Product Innovation, and Sustainable Competitive Advantage: Empirical Evidence from Farmers in Karo Regency, North Sumatra, Indonesia. In Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC, ISBN 978-989-758-498-5, pages 137-150. DOI: 10.5220/0009200301370150

in Bibtex Style

@conference{ebic19,
author={Maretta Ginting and Hasan Basri Tarmizi and Endang Sulistya Rini and Yeni Absah},
title={Linking Social Capital, Business Environment, Product Innovation, and Sustainable Competitive Advantage: Empirical Evidence from Farmers in Karo Regency, North Sumatra, Indonesia},
booktitle={Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,},
year={2019},
pages={137-150},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009200301370150},
isbn={978-989-758-498-5},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,
TI - Linking Social Capital, Business Environment, Product Innovation, and Sustainable Competitive Advantage: Empirical Evidence from Farmers in Karo Regency, North Sumatra, Indonesia
SN - 978-989-758-498-5
AU - Ginting M.
AU - Tarmizi H.
AU - Rini E.
AU - Absah Y.
PY - 2019
SP - 137
EP - 150
DO - 10.5220/0009200301370150