Do Creativity and Intellectual Capital Matter for SMEs Sustainability? The Role of Competitive Advantage

SMEs as an organization to succeed and to be sustainable must have the most essential and strategic capital, namely creativity, competitive advantage, and intellectual capital. This study aims to explore how creativity and intellectual capital determines SMEs’ sustainability as well as examine the emerging role of competitive advantage in supporting this relationship. A quantitative method was applied to gain a better understanding of the relationship between variables undergoing Structural Equation Modeling with Partial Least Square (SEM-PLS). This study collected data from 123 SMEs in East Java of Indonesia using an online survey. The approach adopted in this study is a convenience random sampling method, which is widely used in entrepreneurship and SMEs’ sustainability research. The findings showed that intellectual capital positively affects both competitive advantage and SMEs’ sustainability. Additionally, the result of this study confirms a robust relationship between intellectual capital and SMEs’ sustainability. However, partially, creativity failed in explaining SMEs’ sustainability. Furthermore, this study confirmed that competitive advantage has successfully mediated both the influence of creativity and intellectual capital to SMEs’ sustainability. Although this research only involved participants in East Java, this study can be the first step for relevant research of SMEs’ sustainability, in particular, in Indonesia.