FACTORS INFLUENCING SUSTAINABLE GROWTH: THE ROLE OF MEDIATING FACTORS FROM CAPABILITY INNOVATION

Abstract

Sustainable growth becomes focus main for organization in face increasing global competition dynamic. Growth sustainable No only determined by factors economy, but also by the ability organization integrate aspect social and environmental in its business strategy. Research This aim For analyze The influence of entrepreneurial leadership, strategic auditing, financial agility, and digital business on sustainable growth with innovation capability as variables mediation in Micro and Small Enterprises (MSEs) in Southwest Papua. The number sample in research This as many as 241 owners / managers MSEs businesses in the Southwest Papua region (Sorong City and Sorong Regency). The research method used is approach quantitative with Structural Equation Modeling (SEM) analysis. Research results show that entrepreneurial leadership, financial agility, and digital business have influence positive and significant towards innovation capability and sustainable growth. On the contrary, strategic auditing is proven No influential significant to both of them, indicate that strategic audit practices in MSEs are still focus on aspects compliance administrative and not yet optimized as instrument innovation and growth sustainable. In addition, innovation capability is proven play a role as variables mediation significant bridging​ the influence of entrepreneurial leadership, financial agility, and digital business on sustainable growth, but not on strategic auditing. Findings This confirm importance innovation as bridge strategic in strengthen growth sustainable. For MSEs in Southwest Papua, success achieving sustainability requires synergy between leadership entrepreneurship, agility financial, as well as directed digital transformation for strengthen capability innovation organization.