BUSINESS SUSTAINABILITY MODEL: THE MEDIATING ROLE OF FINANCIAL RESILIENCE AND DYNAMIC CAPABILITIES IN MADURA FISH PROCESSING UNITS
DOI:
https://doi.org/10.70248/jmie.v4i1.4747Abstract
The fishery product processing sector on Madura Island faces operational vulnerabilities due to maritime climate anomalies, fluctuations in fishermen's catch supply, and surge in raw material price volatility. This study aims to test and analyze the influence of dynamic capabilities on business sustainability with financial resilience as a mediating variable in fishery product processing business units on Madura Island. This study uses an explanatory quantitative approach to 70 respondents who are leaders and managers of business units in Sumenep Regency and Pamekasan Regency who were selected through purposive and snowball sampling techniques. Primary data was collected using a 5-point Likert scale structured questionnaire and analyzed using Partial Least Squares-Structural Equation Modeling (PLS-SEM) with SmartPLS 4.1 software. Outer model evaluations confirmed indicator reliability, convergent validity (AVE > 0.50), and discriminant validity across constructs. The results of the structural model evaluation prove that dynamic capabilities have a positive and significant effect on financial resilience (= 0.723; = 8.928; = 0.000) and business sustainability (= 0.572; = 4.669; = 0.000). On the other hand, financial resilience has a positive and insignificant effect on business sustainability (= 0.193; = 0.152) and does not mediate the relationship between dynamic capabilities and business sustainability (= 0.139; = 0.166). These findings confirm the occurrence of the phenomenon of direct effect dominance, where business continuity is more directly determined by the agility of product diversification innovation, adaptation of post-harvest processing methods, and supply chain loyalty with local fishers rather than the accumulation of liquidity cash reserves alone. This study recommends that business units prioritize upgrading the quality of value-added products and urges local governments to develop mentoring programs focusing on operational inn
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