BUSINESS INTELLIGENCE CAPABILITIES AND ECONOMIC PERFORMANCE: SERIAL MEDIATION OF KNOWLEDGE ABSORPTIVE CAPACITY AND INNOVATION
Abstract
Numerous studies have delved into the performance of SMEs. In contrast, the intricate interplay between Business Intelligence Capabilities, Knowledge Absorptive Capacity, Innovation, and the Economic Performance of SMEs in Indonesia's creative economy remains unexplored, making this research a unique and significant contribution to the field. This research not only uncovers the serial mediating role of Knowledge Absorptive Capacity and Innovation in the relationship between Business Intelligence Capabilities and Economic Performance, but also provides practical insights for the 210 creative-economy-based SMEs in East Java, Indonesia. The findings suggest that enhancing Business Intelligence Capabilities can lead to increased knowledge absorptive capacity, innovation and economic performance, highlighting the potential for these SMEs to improve their business strategies. The theoretical implications of this research open the boundaries of Resource-based and Knowledge-based theory of the firm in the context of creative economy-based SMEs in developing countries that SMEs can already carry out simple business intelligence with existing resources. Future research needs to investigate qualitatively to what extent SMEs in the Society 5.0 era carry out Business Intelligence practices and how deep the absorption of knowledge is so that it can produce innovation that is out of the box.
References
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Cuthbertson, R. W., & Furseth, P. I. (2022). Digital services and competitive advantage: Strengthening the links between RBV, KBV, and innovation. Journal of Business Research, 152(July), 168–176. https://doi.org/10.1016/j.jbusres.2022.07.030
Dabić, M., Obradović Posinković, T., Vlačić, B., & Gonçalves, R. (2023). A configurational approach to new product development performance: The role of open innovation, digital transformation and absorptive capacity. Technological Forecasting and Social Change, 194(September), 122720 (1-12). https://doi.org/10.1016/j.techfore.2023.122720
Fulgence, B. E., Hu, X., Larbi-siaw, O., Tuo, S. J., & Gnahe, E. (2023). Impact of knowledge absorptive capacity on innovative performance in SMEs : mediating effect of cluster environment. Kybernetes, 52(12), 6001–6024. https://doi.org/https://doi.org/10.1108/K-03-2022-0373
Garson, G. D. (2016). Partial Least Squares: Regression & Structural Equation Models. In Statistical Associates Publishing Publishing (2016 Editi). https://doi.org/10.3726/978-3-0353-0280-6/8
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Hair, J. F., Howard, M. C., & Nitzl, C. (2020). Assessing measurement model quality in PLS-SEM using confirmatory composite analysis. Journal of Business Research, 109(December 2019), 101–110. https://doi.org/10.1016/j.jbusres.2019.11.069
Hair, J. J. F., Sarstedt, M., Hopkins, L., & Kuppelwiesier, V. G. (2014). Partial Least Squares Structural Equation Modeling ( PLS-SEM ) An Emerging Tool in Business Research. European Business Review, 26(2), 106–121. https://doi.org/10.1108/EBR-10-2013-0128
Huang, Z. xiong, Savita, K. S., Dan-yi, L., & Omar, A. H. (2022). The impact of business intelligence on the marketing with emphasis on cooperative learning: Case-study on the insurance companies. Information Processing and Management, 59(2), 102824 (1-10). https://doi.org/10.1016/j.ipm.2021.102824
Huang, Z. xiong, Savita, K. S., & Zhong-jie, J. (2022). The Business Intelligence impact on the financial performance of start-ups. Information Processing and Management, 59(1), 102761 (1-13). https://doi.org/10.1016/j.ipm.2021.102761
Khan, M. S. (2022). Absorptive capacities approaches for investigating national innovation systems in low and middle income countries. International Journal of Innovation Studies, 6(3), 183–195. https://doi.org/10.1016/j.ijis.2022.07.004
Larios-Francia, R. P., & Ferasso, M. (2023). The Relationship Between Innovation and Performance in MSMEs: The Case of the Wearing Apparel Sector in Emerging Countries. Journal of Open Innovation: Technology, Market, and Complexity, 9(1), 100018 (1-18). https://doi.org/10.1016/j.joitmc.2023.100018
Li, C., Khan, A., Ahmad, H., & Shahzad, M. (2022). Business analytics competencies in stabilizing firms’ agility and digital innovation amid COVID-19. Journal of Innovation and Knowledge, 7(4), 100246 (1-8). https://doi.org/10.1016/j.jik.2022.100246
Li, L., Zhu, W., Wei, L., & Yang, S. (2022). How can digital collaboration capability boost service innovation? Evidence from the information technology industry. Technological Forecasting and Social Change, 182(June), 121830 (1-9). https://doi.org/10.1016/j.techfore.2022.121830
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Shaik, A. S., Alshibani, S. M., Mishra, S., Papa, A., & Cuomo, M. T. (2023). Does learning from innovation failure enhance innovation performance? A quantitative investigation of small businesses. Technovation, 127(March), 102818 (1-15). https://doi.org/10.1016/j.technovation.2023.102818
Singh, R., Chandrashekar, D., Subrahmanya, B., Hillemane, M., Sukumar, A., & Jafari-sadeghi, V. (2022). Network cooperation and economic performance of SMEs : Direct and mediating impacts of innovation and internationalisation. Journal of Business Research, 148(October 2021), 116–130. https://doi.org/10.1016/j.jbusres.2022.04.032
Tian, Q., Cao, G., & Weerawardena, J. (2024). Strategic use of social media in new product development in B2B firms: The role of absorptive capacity. Industrial Marketing Management, 120(June), 132–145. https://doi.org/10.1016/j.indmarman.2024.05.012
Tsai, F. S., Cabrilo, S., Chou, H. H., Hu, F., & Tang, A. D. (2022). Open innovation and SME performance: The roles of reverse knowledge sharing and stakeholder relationships. Journal of Business Research, 148(September), 433–443. https://doi.org/10.1016/j.jbusres.2022.03.051
Wang, J., Omar, A. H., Alotaibi, F. M., Daradkeh, Y. I., & Althubiti, S. A. (2022). Business intelligence ability to enhance organizational performance and performance evaluation capabilities by improving data mining systems for competitive advantage. Information Processing and Management, 59(6), 103075 (1-14). https://doi.org/10.1016/j.ipm.2022.103075
Weidner, N., Som, O., & Horvat, D. (2023). Technovation An integrated conceptual framework for analysing heterogeneous configurations of absorptive capacity in manufacturing firms with the DUI innovation mode. Technovation, 121(May 2021), 102635 (1-16). https://doi.org/10.1016/j.technovation.2022.102635
Xu, Y., Li, X., Mustakim, F. bin, Alotaibi, F. M., & Abdullah, N. N. (2022). Investigating the business intelligence capabilities’ and network learning effect on the data mining for start-up’s function. Information Processing and Management, 59(103055), 1–10. https://doi.org/10.1016/j.ipm.2022.103055
Yang, M., Sulaiman, R., Yin, Y., Mallamaci, V., & Alrabaiah, H. (2022). The effect of business intelligence, organizational learning and innovation on the financial performance of innovative companies located in Science Park. Information Processing and Management, 59(2), 102852 (1-13). https://doi.org/10.1016/j.ipm.2021.102852
Anjaningrum, W. D., Azizah, N., & Suryadi, N. (2024). Spurring SMEs ’ performance through business intelligence , organizational and network learning , customer value anticipation , and innovation - Empirical evidence of the creative economy sector in East Java , Indonesia. Heliyon, 10(7), e27998 (1-16). https://doi.org/10.1016/j.heliyon.2024.e27998
Anjaningrum, W. D., Hermawati, A., Yogatama, A. N., & Puji, R. (2021). Creative Industry in the Post-Pandemic Digital Era : Meaningful Incubation , Customer Focus , and High Innovation as Strategies to Compete. International Conference of Economic , Business, and Entrepreneurship (ICEBE), 2–8. https://doi.org/10.4108/eai.7-10-2021.2316784
Anjaningrum, W. D., & Moko, W. (2023). Can Holistic Empowerment and Digital Platform Arouse Creative Economy Innovation? Asia Pacific Management and Business Application, 12(1), 1–18. https://doi.org/10.21776/ub.apmba.2023.012.01.1
Anjaningrum, W. D., Yogatama, A. N., Sidi, A. P., Hermawati, A., & Suci, R. P. (2024). The impact of Penta-Helix Collaborative Business Incubation Process on the creative business strategic orientation and innovation capability. International Journal of Learning and Intellectual Capital, 21(1), 60–77. https://doi.org/10.1504/IJLIC.2024.136380
Aslam, M. S., Qammar, A., Ali, I., Yaqub, M. Z., Ahmed, F., & Mohapatra, A. K. (2024). Fostering innovation speed and quality in ICT firms: The role of knowledge governance mechanisms, absorptive capacity and environmental dynamism. Technological Forecasting and Social Change, 205(November 2023), 123460 (1-13). https://doi.org/10.1016/j.techfore.2024.123460
Bag, S., Dhamija, P., Singh, R. K., Rahman, M. S., & Sreedharan, V. R. (2023). Big data analytics and artificial intelligence technologies based collaborative platform empowering absorptive capacity in health care supply chain: An empirical study. Journal of Business Research, 154(December 2021), 113315 (1-18). https://doi.org/10.1016/j.jbusres.2022.113315
Benyahya, P., & Matošková, J. (2021). Partnership Between the Employer and the Staff as a Vital Factor for Knowledge Sharing. International Journal of Learning and Intellectual Capital, 18(1), 5–27. https://doi.org/10.1504/IJLIC.2021.113659
Božič, K., & Dimovski, V. (2019a). Business intelligence and analytics for value creation: The role of absorptive capacity. International Journal of Information Management, 46(December 2018), 93–103. https://doi.org/10.1016/j.ijinfomgt.2018.11.020
Božič, K., & Dimovski, V. (2019b). Business intelligence and analytics use, innovation ambidexterity, and firm performance: A dynamic capabilities perspective. Journal of Strategic Information Systems, 28(4), 101578 (1-20). https://doi.org/https://doi.org/10.1016/j.jsis.2019.101578
Caseiro, N., & Coelho, A. (2019). The influence of Business Intelligence capacity, network learning and innovativeness on startups performance. Journal of Innovation & Knowledge, 4(3), 139–145. https://doi.org/10.1016/j.jik.2018.03.009
Chen, Y., & Lin, Z. (2021). Business Intelligence Capabilities and Firm Performance: A Study in China. International Journal of Information Management, 57(August 2020), 102232 (1-15). https://doi.org/10.1016/j.ijinfomgt.2020.102232
Cuevas-vargas, H. (2022). Impact of capital structure and innovation on firm performance . Impact of capital structure and innovation on firm performance . Direct and indirect effects of capital structure Direct and indirect effects of capital structure. Procedia Computer Science, 199, 1082–1089. https://doi.org/10.1016/j.procs.2022.01.137
Cuevas-Vargas, H., Aguirre, J., & Parga-Montoya, N. (2022). Impact of ICT adoption on absorptive capacity and open innovation for greater firm performance. The mediating role of ACAP. Journal of Business Research, 140(December 2021), 11–24. https://doi.org/10.1016/j.jbusres.2021.11.058
Cuthbertson, R. W., & Furseth, P. I. (2022). Digital services and competitive advantage: Strengthening the links between RBV, KBV, and innovation. Journal of Business Research, 152(July), 168–176. https://doi.org/10.1016/j.jbusres.2022.07.030
Dabić, M., Obradović Posinković, T., Vlačić, B., & Gonçalves, R. (2023). A configurational approach to new product development performance: The role of open innovation, digital transformation and absorptive capacity. Technological Forecasting and Social Change, 194(September), 122720 (1-12). https://doi.org/10.1016/j.techfore.2023.122720
Fulgence, B. E., Hu, X., Larbi-siaw, O., Tuo, S. J., & Gnahe, E. (2023). Impact of knowledge absorptive capacity on innovative performance in SMEs : mediating effect of cluster environment. Kybernetes, 52(12), 6001–6024. https://doi.org/https://doi.org/10.1108/K-03-2022-0373
Garson, G. D. (2016). Partial Least Squares: Regression & Structural Equation Models. In Statistical Associates Publishing Publishing (2016 Editi). https://doi.org/10.3726/978-3-0353-0280-6/8
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Thousand Oaks. In Sage (Second Edi). Washington DC, USA.
Hair, J. F., Howard, M. C., & Nitzl, C. (2020). Assessing measurement model quality in PLS-SEM using confirmatory composite analysis. Journal of Business Research, 109(December 2019), 101–110. https://doi.org/10.1016/j.jbusres.2019.11.069
Hair, J. J. F., Sarstedt, M., Hopkins, L., & Kuppelwiesier, V. G. (2014). Partial Least Squares Structural Equation Modeling ( PLS-SEM ) An Emerging Tool in Business Research. European Business Review, 26(2), 106–121. https://doi.org/10.1108/EBR-10-2013-0128
Huang, Z. xiong, Savita, K. S., Dan-yi, L., & Omar, A. H. (2022). The impact of business intelligence on the marketing with emphasis on cooperative learning: Case-study on the insurance companies. Information Processing and Management, 59(2), 102824 (1-10). https://doi.org/10.1016/j.ipm.2021.102824
Huang, Z. xiong, Savita, K. S., & Zhong-jie, J. (2022). The Business Intelligence impact on the financial performance of start-ups. Information Processing and Management, 59(1), 102761 (1-13). https://doi.org/10.1016/j.ipm.2021.102761
Khan, M. S. (2022). Absorptive capacities approaches for investigating national innovation systems in low and middle income countries. International Journal of Innovation Studies, 6(3), 183–195. https://doi.org/10.1016/j.ijis.2022.07.004
Larios-Francia, R. P., & Ferasso, M. (2023). The Relationship Between Innovation and Performance in MSMEs: The Case of the Wearing Apparel Sector in Emerging Countries. Journal of Open Innovation: Technology, Market, and Complexity, 9(1), 100018 (1-18). https://doi.org/10.1016/j.joitmc.2023.100018
Li, C., Khan, A., Ahmad, H., & Shahzad, M. (2022). Business analytics competencies in stabilizing firms’ agility and digital innovation amid COVID-19. Journal of Innovation and Knowledge, 7(4), 100246 (1-8). https://doi.org/10.1016/j.jik.2022.100246
Li, L., Zhu, W., Wei, L., & Yang, S. (2022). How can digital collaboration capability boost service innovation? Evidence from the information technology industry. Technological Forecasting and Social Change, 182(June), 121830 (1-9). https://doi.org/10.1016/j.techfore.2022.121830
Menaouer, B., Mohammed, S., & Nada, M. (2022). The Impact of Business Intelligence and Knowledge Management on Sustainability Performance in the Tourism Industry in Algeria. Indonesian Journal of Sustainability Accounting and Management, 6(1), 168–187. https://doi.org/10.28992/ijsam.v6i1.550
Olszak, C. M. (2022). Business Intelligence Systems for Innovative Development of Organizations. Procedia Computer Science, 207, 1754–1762. https://doi.org/10.1016/j.procs.2022.09.233
Shahzad, M., Qu, Y., Ur Rehman, S., Zafar, A. U., Ding, X., & Abbas, J. (2020). Impact of knowledge absorptive capacity on corporate sustainability with mediating role of CSR: analysis from the Asian context. Journal of Environmental Planning and Management, 63(2), 148–174. https://doi.org/10.1080/09640568.2019.1575799
Shaik, A. S., Alshibani, S. M., Mishra, S., Papa, A., & Cuomo, M. T. (2023). Does learning from innovation failure enhance innovation performance? A quantitative investigation of small businesses. Technovation, 127(March), 102818 (1-15). https://doi.org/10.1016/j.technovation.2023.102818
Singh, R., Chandrashekar, D., Subrahmanya, B., Hillemane, M., Sukumar, A., & Jafari-sadeghi, V. (2022). Network cooperation and economic performance of SMEs : Direct and mediating impacts of innovation and internationalisation. Journal of Business Research, 148(October 2021), 116–130. https://doi.org/10.1016/j.jbusres.2022.04.032
Tian, Q., Cao, G., & Weerawardena, J. (2024). Strategic use of social media in new product development in B2B firms: The role of absorptive capacity. Industrial Marketing Management, 120(June), 132–145. https://doi.org/10.1016/j.indmarman.2024.05.012
Tsai, F. S., Cabrilo, S., Chou, H. H., Hu, F., & Tang, A. D. (2022). Open innovation and SME performance: The roles of reverse knowledge sharing and stakeholder relationships. Journal of Business Research, 148(September), 433–443. https://doi.org/10.1016/j.jbusres.2022.03.051
Wang, J., Omar, A. H., Alotaibi, F. M., Daradkeh, Y. I., & Althubiti, S. A. (2022). Business intelligence ability to enhance organizational performance and performance evaluation capabilities by improving data mining systems for competitive advantage. Information Processing and Management, 59(6), 103075 (1-14). https://doi.org/10.1016/j.ipm.2022.103075
Weidner, N., Som, O., & Horvat, D. (2023). Technovation An integrated conceptual framework for analysing heterogeneous configurations of absorptive capacity in manufacturing firms with the DUI innovation mode. Technovation, 121(May 2021), 102635 (1-16). https://doi.org/10.1016/j.technovation.2022.102635
Xu, Y., Li, X., Mustakim, F. bin, Alotaibi, F. M., & Abdullah, N. N. (2022). Investigating the business intelligence capabilities’ and network learning effect on the data mining for start-up’s function. Information Processing and Management, 59(103055), 1–10. https://doi.org/10.1016/j.ipm.2022.103055
Yang, M., Sulaiman, R., Yin, Y., Mallamaci, V., & Alrabaiah, H. (2022). The effect of business intelligence, organizational learning and innovation on the financial performance of innovative companies located in Science Park. Information Processing and Management, 59(2), 102852 (1-13). https://doi.org/10.1016/j.ipm.2021.102852
Published
2024-09-27
How to Cite
ANJANINGRUM, Widiya Dewi et al.
BUSINESS INTELLIGENCE CAPABILITIES AND ECONOMIC PERFORMANCE: SERIAL MEDIATION OF KNOWLEDGE ABSORPTIVE CAPACITY AND INNOVATION.
Proceedings of the International Conference of Islamic Economics and Business (ICONIES), [S.l.], v. 10, n. 1, p. 1141-1156, sep. 2024.
ISSN 2541-3333.
Available at: <https://conferences.uin-malang.ac.id/index.php/iconies/article/view/2982>. Date accessed: 15 may 2026.
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Articles
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