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firstname.lastname@example.org; email@example.com Economic sustainability involves the development of an organisation that meets its Department of Management, future needs through an integrated policy, planning, and social learning process. The Faculty Economic and Business, purpose of this study was to investigate the mediating role of competitive advantage Widya Dharma University in the relationship between strategic orientation and economic sustainability under Pontianak, Kota Pontianak, Kalimantan Barat 78243, unpredictable circumstances. This study collected quantitative data from a total of 284 Indonesia halal small and medium enterprises (SMEs) from Indonesia through structured inter- Faculty of Economics views. Data were analysed using partial least squares structural equation modelling and Business, University Malaysia Sarawak, 94300 Kota Samarahan, (PLS-SEM). Moreover, this study adopted artificial neural network (ANN) analysis for a Sarawak, Malaysia model-free estimation using non-linear, multilayer, and parallel regression. The results UKM-Graduate School revealed statistically significant and positive effect of strategic orientation on economic of Business, Universiti Kebangsaan Malaysia, sustainability. Additionally, this study found that competitive advantage expanded 43600 Bangi, Selangor, Malaysia the effect of strategic orientation on economic sustainability. Findings of ANN analy- Department of Management sis confirm high prediction accuracy of the model. Findings of the sensitivity analysis Information Systems, Prince Sattam Bin Abdulaziz University, highlighted the importance of innovation, network and technological orientation, and Al Kharj 11942, Saudi Arabia the positive effect of competitive advantage on halal SMEs economic sustainability. In Faculty of Entrepreneurship order to achieve long-term economic sustainability, halal SMEs should therefore focus and Business, Universiti Malaysia Kelantan, Pengkalan Chepa, on innovation capacity, vertical and horizontal networking and adoption of the latest 16100 Kota Bharu, Malaysia technologies. The uniqueness of this study focused on the strategic orientation and value of competitive advantage of halal SMEs towards economic sustainability. Addi- tionally, this study was the first to develop hybrid SEM–neural network analysis to apply sensitivity analysis for the evaluation of the contribution of each exogenous predictor towards the endogenous construct. Keywords: Consumer orientation, Competitor orientation, Technology orientation, Network orientation, Innovation orientation, Competitive advantage, Economic sustainability © The Author(s) 2022. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the mate- rial. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http:// creat iveco mmons. org/ licen ses/ by/4. 0/. Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 2 of 28 Introduction The environmental system of an economy is the central factor to gain business opportunities for sustainable development. The concept of sustainability and the interdependence of the economy and environment are increasingly important for pol- icymakers. Small and medium enterprises (SMEs) play essential roles of contributing to the economic growth of developing countries and creating income and job crea- tion; however, numerous small business entrepreneurs face failure (Hyder & Lussier, 2016). The government and authorities support SMEs during their prestart-up line by raising adequate capital and calculating their business costs (Rachapaettayakom et al., 2020). Indonesia Advances (Indonesia Maju) is one of the government’s ini- tiatives to support sustainability development. Shariah economy and finance (herein refers to as “halal economy”) have been identified as key contributors considering that the vast global opportunity of $1.9 trillion in 2020 and domestic opportunity of $184 billion in the related consumer spending market have not been fully tapped. Indone- sia is the largest domestic halal economy market, by 87.0% of the total population or about 236.53 million people. This amount is equivalent to 12.7% of the entire Mus - lim population in the world. The halal economy has remained more unscathed by the effects of the COVID-19 pandemic than the national economy, with a contraction of − 1.70%, as compared to − 2.07% for the national economy in 2020 (Halal Economy and Finance Report, 2020). Indonesia did not occupy a position in the top 10 countries of the halal food indus- try since 2014–2017 (Halal Institution, 2021). Therefore, in the end of 2021, the Indo - nesian government proposed the “Proudly Made in Indonesia National Movement” (Gernas BBI) to support the expansion of halal products through ASEAN Online Sale Day (AOSD). Sustainable development of halal SMEs must meet the needs of customers. Sustainable business strategy is necessary for an organisation to remain competitive, improve brand reputation, gain higher attractiveness and competi- tive advantage, and to reduce costs and business risks (Dyllick & Muff, 2016). Prof - itability, cost reduction, competitiveness, and finance need to be considered to gain economic sustainability (Ferro et al., 2019). In a broader sense, the term of business sustainability focuses on how an organisation achieves profitability and wider social and environmental impacts in the marketplace. According to Dyllick and Muff (2016), an economy truly becomes sustainable when organisations start to consider and act on addressing business challenges. Economic sustainability is feasible for com- mercial businesses when such strategies offer satisfactory economic values to the shareholders. These strategies fall into the domain of share-value creation. In this highly competitive environment, successful halal SMEs utilise strategic orientation to achieve goals, establish direction for future sustainability, and assist in the allo- cation of resources (Kamboj & Rahman, 2017). Strategic orientation correlates with self-learning, innovation, capabilities, and network of halal SMEs towards transform- ing external information to new knowledge for higher competitiveness. Furthermore, Lee et al. (2019) stated that strategic orientation boosts different levels of competitive advantage, and different types of strategic orientation potentially improve the perfor - mance of halal SMEs. Halal SMEs play a crucial role in the economic growth and sus- tainability of developing countries (Daengs et al., 2019). The strategic development of Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 3 of 28 halal SMEs is economically vital for developing countries to expand their halal brand products. Therefore, strategic orientation is essential for halal SMEs to increase their brand and profit in a hyper-competitive setting (Mu et al., 2017). Technology orientation is required to increase profits and improve the efficiency of managing a business unit (Al-Idrus et al., 2020). Moreover, technology enables an organ- isation to achieve economic sustainability (Samsir, 2018). Technology adoption is vital to achieve value in business and to gain specialisation and capability to attain economic growth and competitive advantage. Furthermore, quality halal products increase cus- tomer satisfaction, which then leads to product sustainability. Improving the strategic orientation to understand customers’ needs can enhance competitive advantage. Apart from that, halal SMEs can gain cost leadership-based advantage by reducing other costs, such as material costs. Similarly, an organisation needs product differentiation to obtain competitive advantage. Competitive advantage is crucial in the operation of halal SMEs, especially in this emerging market, in order to achieve halal brand sustainability (Anwar et al., 2018). Therefore, customer orientation, technology orientation, network orienta - tion, and innovation orientation are critical for businesses like SMEs to gain economic sustainability. However, inconsistent findings have been reported, indicating that stra - tegic orientation does not directly influence performance outcomes (Gunawan et al., 2016). The possible explanation for this contradiction is that entrepreneurship context often undergoes turbulent changes in regard to technology, market, and institutions (Zhou, Ayegba, et al., Zhou, Ayegba, et al., 2021). However, only a few studies assessed strategic orientation regarding organisational economic and environmental sustainabil- ity (Ahashan et al., 2021). From the overall halal entrepreneurship perspective on the implementation of strategic orientation concerning economic sustainability, lack of both theoretical and practical literature are evident. Resource-based view (RBV), which was proposed by Penrose (1959), is the most suit- able theory to determine the relationship of strategic orientation, competitive advantage, and economic sustainability. RBV focuses on human capabilities and external capabili- ties, such as network and technology, to achieve competitive advantage—this is reflected in the literature on strategic management. Moreover, the diffusion of RBV in strategic management and related disciplines has involved considerable theoretical development and empirical testing. RBV has become one of the most influential and cited theories in the history of management theorising. A prior study explained the internal sources of a firm’s sustained competitive advantage (SCA). The central of this theory proposi - tion is increasing a firm’s performance to achieve SCA by acquiring and controlling valu - able, rare, inimitable, and non-substitutable (VRIN) resources and capabilities that can absorb and apply them (Barney, 2001). This study argued that strategic orientation enhances halal SMEs’ competitive advantage in a hyper-competitive environment. Thus, this study attempted to explore and develop a framework of developing hybrid SEM–neural network analysis on how customer orientation, competitor orientation, technology orientation, network orien- tation, and innovation orientation affect the economic sustainability of halal SMEs through competitive advantage in Indonesia. The above problem statements and the lack of sufficient findings on the related areas prompted the current study to contrib - ute to the existing body of knowledge and address other gaps, such as the inconsistent Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 4 of 28 findings on the relationship between strategic orientation and economic sustainabil - ity in related literature. In this study, RBV was captured with respect to strategic decision-making orienta- tion and competitive advantage towards the economic sustainability of halal SMEs in Indonesia. This study designed, developed, and validated an instrument to measure the dimensions of strategic orientation, competitive advantage, and economic sus- tainability using the hybrid SEM–neural network analysis. Literature review and hypotheses development Theoretical background RBV (a bona fide theory), which was introduced by Penrose (1959), emphasised the integration position between internal factor (capability) and external environment (competitors). According to Wenerfelt (1984), an organisation’s resources include those tangible (e.g., building, chairs, desks, papers, etc.) and intangible (employees’ capability) assets, which are tied semi-permanently. Barney (2000) classified a firm’s resources into three categories, namely (1) physical capital (Williamson, 1975), which are used to assess raw materials, technology use, and equipment; (2) human capital (Becker, 1964), such as intelligence, relationships, training, and working experience of individuals in the firm, and (3) organisational capital (Tomer, 1987), which is a sys - tem made to control and coordinate one’s work among the groups and in the firm’s environment. Barney (1991) observed the important role of RBV in management information sys- tems. Information and communication technologies have changed and played position in power and availability to gain market competition. This has also led to increased aca - demic attention on the issue of deploying ICTs. Instead, firms often must deploy the most recent ICTs to simply keep pace with their competitors (Powell & Dent-Micallef, 1997). From the perspective of the RBV, ICT has seen as one of the vital tools to cre- ate high competition in this digital era. The interface between skilled users and ICTs may prove to be inimitable, such as the context of halal SMEs. Furthermore, halal SMEs expand their resources by assessing resources, assets, and skills as value (Popli et al., 2017). Resources and capabilities offer substantial gain for halal SMEs with lower trans - action costs and access to external resources and capabilities (Hitt et al., 2016). As a result, according to the RBV, strategic orientation and competitive advantage positively influence the sustainability of SMEs. Furthermore, both resources and quality strategies appear to benefit halal the sustainability and performance of SMEs. Moreover, with respect to emerging markets, studies on RBV have suggested that local firms are interested in using foreign alliances to acquire advantages over their domestic rivals, in emphasising the importance of network ties as an intangible resource for entrepreneurial start-ups, and in understanding the changing benefits of unrelated diversification as economic institutions develop (Barney, 1991). The global competitive innovation in this era of high technology has pushed firms to make long- service relationship and software to demonstrate their competency by exploring new knowledge and capability required to gain competitive advantage, which is known as dynamic capability (Teece et al., 1997) (Table 1) (Fig. 1). Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 5 of 28 Table 1 Definition of variables Definition References Customer orientation focuses on how a company should understand customers’ Jeong et al. (2006) needs through the collection, dissemination of customer-focused strategies, and responsiveness to the potential market Competitor orientation is a set of beliefs that puts the interest of customers first, Deshpandé and Webster (1993) without excluding those of all other stakeholders, such as owners, managers, and employees, in order to develop a long-term profitable enterprise Technology orientation is defined as an organisation’s openness to new ideas Tsou et al. (2014) and inclination to adopt new technology during the development of products Network orientation is a set of actors (persons, teams, organisations, and Borgatti and Foster (2003) concepts) connected by a set of value, friendship, capability with directed (potentially one-directional, as in giving advice to someone) or undirected (as in being physically proximate) Innovation orientation is stated as the transfer and the upstream and down- Bouncken and Koch (2007) stream use of information, shaping, and refining innovation, the willingness to move beyond old habits, the openness to new ideas at different organisational levels, and the inclination to generate novel ideas on processes and products Competitive advantage is defined as the implementation of a strategy that is not Newbert (2008) currently implemented by other firms that facilitates the reduction of costs, the exploitation of market opportunities, and/or the neutralisation of competitive threats; the performance is generally conceptualised as the rents a firm accrues as a result of the implementation of the strategy Economic sustainability is a company’s obligation to open up opportunities for Ferro et al. (2019) growth and profits and consider the influence of their business activities on the financial perspective, such as profitability, cost reduction, and management needed to focus on sustainability Valuable, rare, imperfectly imitable, and non‑substituted capability (VRIN) Barney (1991) stressed that an organisation can gain competitive advantage through four criteria, namely valuable, rare, imperfectly imitable, and non-substituted capability. Valuable resource must enable the organisation to behave in ways that lead to high sales, low costs, high margins, and low risks for higher profits. Moreover, the study stated that valuable resource plays critical factor for an organisation to implement a strategy that improves its efficiency and effectiveness (Lopes et al., 2018). In contrast, RVB provides practical and critical guidance to researchers and managers to understand whether a given resource, in a context, does (or does not) create economic value by creating VRIN (Barney & Mackey, 2016). Through value, rarity, imitation, and implementation in the organisation, RBV can lead to sustainable advantage for SMEs (Barney & Hesterly, 2007). The framework of VRIN stresses one’s capability to create strategy value prior to the implementation in their activities as a resource. Both resource and capability to change and be distinctive from other organisations increase the revenue and create a lower net cost. If a firm’s resources or capabilities do not have these effects, they cannot be a source of competitive parity (Barney & Mackey, 2016). As for the application of the VRIN model, after defining a resource as valuable, the next question deals with rarity. Subsequently, this focuses on the inimitability feature by comparing it with competitors. When a resource is identified as rare, then the resource becomes a source of “tempo - rary” competitive advantage. When the resource is not rare, it becomes a source of com- petitive parity. Resources that are considered rare receive greater weighting in regard to inimitability in terms of defining the likely duration of competitive advantage. High-cost resources that competitors buy or replace represent sources of sustained competitive Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 6 of 28 advantage (Barney & Mackey, 2016). Apart from creating dimensions for organisational strategy, these dimensions cannot be replicated in different contexts. The VRIN model acts in the identification of internal organisational strengths and weaknesses and takes into account the potential of each resource or capability in improving the competitive position of the organisation (Barney, 1991; Barney & Hesterly, 2007). The quadruple and quintuple innovation helix concepts The concept of the triple helix model was originally proposed by Etzkowitz and Ley - desdorff (1995). Theoretically, it draws on evolutional economics, sociology, and public policy. The unique contribution of the triple helix model to innovation studies lies in its attention to the heightened role of the university in the transition towards a knowl- edge-based society. Etzkowitz and Leydesdorff (2000) further expounded the triple helix model into a model of innovation and entrepreneurship to study knowledge-based econ- omies. The triple helix model of knowledge stresses three helices that are intertwined and, by this, generate a national innovation system, namely universities, industries, and governments. According to Quartey and Oguntoye (2021), understanding and achiev- ing sustainable industrialisation based on strategic orientation, innovation, knowledge, and competitive advantage are possible through the triple helix approach (THA). THA enables innovation and knowledge as important collaborative interactions among uni- versities, governments, and industries. However, THA in innovation and knowledge management research has received less theoretical and empirical applications, result- ing in the lack of understanding on industrial sustainability, especially in developing countries. Furthermore, Carayannis and Campbell (2011) added a fourth quadruple helix that is identified as media-based and culture-based public, as well as the civil society. Accord - ing to Carayannis and Campbell (2011), this emphasises that the public requires a broader understanding of knowledge production and innovation application to become more integrated into advanced innovation systems. Carayannis, Campbell, et al. (2021) emphasised that understanding of the concept of the quadruple and quintuple helix can be derived from democracy and ecology. They added that innovation development and knowledge require focus on knowledge democracy and ecological sensitivity. The eco - system would benefit from greater spillover effects, deriving from a synergistic boost to innovation (Carayannis, Dezi, et al., 2021). The public uses and applies knowledge; so, public users are also part of the innovation system. In an advanced knowledge society and knowledge economy, knowledge flows out into all spheres of society. Quadruple helix refers to the structures and processes of the global and local knowledge economy and society, whereas quintuple helix brings in the perspective of the natural environ- ments. Furthermore, the innovation ecosystem, combining and integrating social and natural systems and environments, stresses the importance of pluralism for a diversity of agents, actors, organisations, universities (universities of sciences and arts), SMEs, and major corporations, along the matrix of fluid and heterogeneous innovation net - works and knowledge clusters (Carayannis & Rakhmatullin, 2014). This may result in a democracy of knowledge, driven by pluralism of knowledge and innovation and plu- ralism of paradigms of knowledge modes. The democracy of knowledge, as a concept and metaphor, is carried by an understanding that it operates (at least potentially) a Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 7 of 28 coevolution between the processes of advancing democracy and processes of advancing knowledge and innovation. There is a certain congruence in the processes and structures of advanced knowledge democracy, knowledge society, and knowledge economy (Caray- annis & Campbell, 2010). The concepts of democracy (moving from electoral to liberal and high-quality democracies), and of knowledge and innovation (for example, refocus- ing from triple helix to quadruple and quintuple helices), are becoming broader, which increase their complexities considerably. The democracy ranking conceptually asserted a link between the quality of democracy and sustainable development from a mid- or long-term perspective. Furthermore, with the specific selection of dimensions for their model of democracy and the quality of democracy, Carayannis and Campbell (2011) pointed out that the democracy ranking emphasises knowledge and innovation and the natural environments of society. The current study focused on balancing development and sustainability by address - ing both innovation and sustainability by modifying the original triple helix model. This study considered the triple helix concept within the context of halal SMEs, specifically in terms of their economic sustainability, towards achieving innovation and sustainability in a hyper-competition setting. There is an increasing awareness that a knowledge-based society operates according to a different set of dynamics, as compared to an industrial society, with an emphasis on SMEs. Knowledge-based innovations are more closely linked to sources of new knowledge and human resources. Fostering a continuous pro- cess of the formation of halal SMEs based on advanced technologies moves to the heart of strategy orientation. Additionally, this study supported the quadruple and quintuple innovation helix to change its spin as the production of new knowledge and technology, which has become an increasingly important element for the performance of halal SMEs. This can also drive the sustainability of halal SMEs towards meeting the global and local knowledge economy and society through strategy, democracy of knowledge, and innovation. At this level of the quadruple and quintuple innovation helix, the enhancement of the per- formance of SMEs and other knowledge-producing institutions often becomes the key issue. The concept of democracy of knowledge, ecology, and society is crucial for halal SMEs to obtain innovation. Sustainable development, progress, and performance across different dimensions of halal SMEs explain the success of quadruple helix. Hypotheses development Customer orientation Competitive advantage can be sustained by generating innovative ideas, quick response to customers’ needs, and development of new beneficial products for customers (Parente et al., 2018). An organisation can gain higher market share by providing high- quality products and improving its brand image. Economic sustainability can be derived from continuous improvement and competitive advantage through uniqueness and new information of the market (Na et al., 2019). By addressing customers’ needs, SMEs can gain more knowledge and understanding of the current and future customers’ prefer- ences and expectations for higher competitive advantage (Zhang et al., 2018). Further- more, for sustainability, Wang et al. (2016) highlighted the importance of resources, such as knowledge and capability, in converting customers’ needs and requirements into Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 8 of 28 innovative products or services. Halal SMEs need to rely more on meeting customers’ demands to improve their opportunity to expand more products and gain competitive advantage (Feng et al., 2019). Handa & Manuel (2021) stated that customer orientation is a strategy which focuses on customer information efficiently to meets their needs. How - ever, it does not mean that the company’ strategy will be influenced by customers desire and preference to reach company’ sustainability. Moreover, SMEs should also be encour- aged to emphasise customer-focused business strategies and SMEs with smaller custom- ers over a long-term period should provide revenue and customer’s needs stability of the firm. Additionally, strategies are needed to improve the effectiveness and efficiency of the processes included building customer loyalty and stronger relationships. Focusing on improving the performance of halal SMEs, there is a need to integrate strategies to enhance better services and products for greater customer satisfaction (D’souza et al., 2021). Similarly, Zang et al. (2021) found that understanding the role of customers in business increases the sustainability and performance of SMEs for long-time revenues. Fan et al. (2021) focused on promoting Industry 4.0 and stated that the most crucial innovation that affects organisational sustainability is influenced by customer orienta - tion. Therefore, based on the findings of prior studies, this study proposed the following hypotheses: Hypothesis 1 (H1a) Customer orientation has a positive effect on halal SMEs’ competi - tive advantage. Hypothesis 1 (H1b) Customer orientation has a positive effect on the halal SMEs’ eco - nomic sustainability. Competitor orientation Competitor orientation can improve a company’s standing in the market if the com- pany is willing to learn from the more successful players in that market (Mudanganyi et al., 2020). A firm’s competitor orientation can help in developing a superior experi - ence for its customers (Crick et al., 2019). Hence, competitor orientation is necessary for analyzing the strengths and weaknesses of the competitors and the dissemination and sharing of information inside the halal SMEs (Mamman, 2020). Moreover, halal SMEs need to understand how their competitors improve their strategy to gain their products, marketing strategy, and achieve competitive advantage (Jamilah et al., 2020). Therefore, competitor orientation could change their strategy by improving products quality, ser- vices and human capability to create new opportunity by gaining competitor orientation could either force SMEs to improve existing products, services, processes, and people by offering training or compel them to introduce the cutting-edge competitive advantage of products to the market with innovative production processes (Seilov, 2015). Otieno and Juma (2022) found that a significant relationship between competitor orientation, cus - tomer orientation and inter-functional coordination with organisational performance. Corrinne et al. (2019) stresses the importance of applying strategy planning with sus- tainability and a longer time horizon. The study stated that long-term strategy is crucial for SMEs to survive and gain profits in a highly competitive environment and achieve Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 9 of 28 sustainable business performance. Competitor orientation, customer orientation, and innovation orientation are crucial for strategic implementation. Competitor orientation and innovation orientation enable SMEs to collect intelligence about their competitors. Therefore, competitor orientation enables SMEs to acquire information required for long-term strategies and environmental management approaches that are preferred by customers (Tseng et al., 2021). Thus, this study proposed the following hypotheses for testing: Hypothesis 2 (H2a) Competitor orientation has a positive effect on the halal SMEs’ competitive advantage. Hypothesis 2 (H2b) Competitor orientation has a positive effect on halal SMEs’ eco - nomic sustainability. Technology orientation Technology can drive product innovation more effectively (Yousaf et al., 2020). Moreo- ver, technology orientation determine new products and ideas of innovation (Ardito & Dangelico, 2018). Technology orientation enables halal SMEs to gain current informa- tion and challenges quickly towards business strategy (Chakraborty et al., 2019). Busi- ness units with technology orientation will obtain competitive advantages, and via this technology, they can offer more innovative products for consumers to choose from such as products that use the latest technology (Al-Idrus et al., 2020). Furthermore, Mandal (2017) has indicated that technology orientation enhances competitive advantage and the sustainability of a firm in the event of disruptions. According to Tsao et al. (2022), the perceptions and consciousness of the participants regarding fifth-generation tech - nology affect sustainability. Klumpp and Loske (2021) noted the important roles of gaining competitive advantage and sustainability. Thus, the following hypotheses were proposed for testing: Hypothesis 3 (H3a) Technology orientation has a positive effect on the halal SMEs’ competitive advantage. Hypothesis 3 (H3b) Technology orientation has a positive effect on the halal SMEs’ economic sustainability. Network orientation Network orientation is a way of thinking, developing, and utilisation of network value. Additionally, network can be used to identify new opportunities and demands in the potential market for businesses to introduce products (Zhang et al., 2018). Besides that, network orientation is an important requirement for halal SMEs to acquire knowledge and access to valuable resources (Ferro et al., 2019). Through network capability, busi - nesses obtain valuable and diverse information and resources to discover and create new opportunities, which subsequently increase their competitive advantage (Dong, et al., 2020). Networks directly affect the growth of halal SMEs, with positive causal effects, Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 10 of 28 and networks can provide business information, advices, and solutions to solve custom- ers’ problems (Martins, 2016). Moreover, Haffar et al. (2022) confirmed the positive influence of network capabilities on sustainability. Thus, this study proposed the follow - ing hypotheses for testing: Hypothesis 4 (H4a) Network orientation has a positive effect on the halal SMEs’ com - petitive advantage. Hypothesis 4 (H4b) Network orientation has a positive effect on the halal SMEs’ eco - nomic sustainability. Innovation orientation Innovation is one of the key strategic alternatives for businesses to attain competitive advantage by identifying demands of the market, product substitution, and economic stability (Anning-Dorson, 2018). Thus, an organisation has to pay attention on reformu - lating and implementing innovation in order to compete with its competitors (Andonova and Otálora, 2020). Additionally, innovation is considered as a strategy for halal SMEs to gain profits and opportunities in this highly competitive market (Colclough et al., 2019). Fidel et al. (2018) noted the importance of innovation for SMEs, as an organisa- tion requires innovation of mindset, products, and human capabilities to compete with its competitors. Digital innovation also tends to have positive influence on competitive advantage and sustainability (Cosimato & Vona, 2021). Furthermore, innovation and capabilities play significant influence of internal and ecosystem factors on sustainability, which have been proved to be extremely beneficial (Desiana et al., 2022). Therefore, this study proposed the following hypotheses for testing: Hypothesis 5 (H5a) Innovation orientation has a positive effect on halal SMEs’ com - petitive advantage. Hypothesis 5 (H5b) Innovation orientation has a positive effect on halal SMEs’ eco - nomic sustainability. Competitive advantage As an organisation expands its products in the market, its competitive advantage and sustainability are somehow related. Price, quality, and the position of products from the perspectives of customers can be influenced by the economic stability of develop - ing countries (Kwarteng et al., 2016). Both sustainability and competitive advantage are considered as the core criteria of success (or failure) for halal SMEs in this highly turbulent global economy. Kwarteng et al. (2016) also highlighted the need for halal SMEs to develop dynamic capability in order to address the paradoxical nature of resource environment. According to Fiori and Foroni (2019), competitive advantage is one of key factors for halal SMEs to attain economic sustainability. Organisations that are willing to invest specific resources, such as technology adoption, to create busi - ness value are likely to gain competitive advantage. Sidek et al. (2020) stated that the Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 11 of 28 strategy of meeting customers’ needs helps halal SMEs to gain competitive advantage and subsequently, economic sustainability. This particular result was found similar with the result reported by Mukhsin and Suryanto (2022) on the positive influence of competitive advantage on sustainability. As such, the following hypothesis was pro- posed for testing: Hypothesis 6 (H6) Competitive advantage has a positive effect on the halal SMEs’ eco - nomic sustainability. Mediating effect According to Syapsan (2019), competitive advantage is derived from two types of resources, namely tangible resources (which include physical assets) and intangible resources (e.g., human capability). Human capability is part of an organisation’s valuable assets to gain competitive advantage (Kamboj & Rahman, 2017). Most importantly, the capability to strategically meet customers’ needs ensures customer satisfaction, which is important for halal SMEs in their efforts to gain competitive advantage and sustain - ability (Sihite, 2018). Moreover, Correia et al. (2020) confirmed the mediating role of competitive advantage in the relationship between dynamic capability and business sustainability. Prior studies reported that the mediation effect of competitive advantage enhances the influence of other predictors on sustainability (Anwar et al., 2018; Yang et al., 2018). Mukhsin and Suryanto (2022) found that competitive advantage mediates the statistically significant influence of supply chain management on company perfor - mance. Therefore, this study proposed the following hypothesis: Hypothesis 7 (H7) Competitive advantage mediates the relationship between the eco- nomic sustainability of halal SMEs and customers orientation, competitor orientation, technology orientation, network orientation and innovation orientation. Methodology Research design This section critically clarifies the approaches that were adopted in this study to achieve its objectives. This study employed a quantitative approach in the form of survey design to explore the observable fact and present robust explanations to the identified prob - lems. The survey design and the quantitative nature were deemed essential for this study. A closed-ended type was employed for the developed questionnaire. The most popular form of survey design used in social research is cross-sectional survey design (Rindfleisch et al., 2008). In a cross-sectional survey design, the study collected data at one point in time. Sedgwick (2014) stated that this design has the advantage of measur- ing current attitudes or practices. It also provides valuable information within a short amount of time, such as the time required to administer the survey and collect the infor- mation. However, the timing of the cross-sectional snapshot may be unrepresentative of the behaviour of the group as a whole (Sedgwick, 2014). Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 12 of 28 Population and sample Questionnaires were distributed to halal SMEs in Indonesia via Google Form link from 24 November 2020 to 20 December 2020. Convenience sampling technique was employed to collect data from the respondents because many SME owners in Indone- sia are not registered in SME associations; therefore, this study encountered difficulty in using a probability sampling technique (Riyanti et al., 2022). Although respond- ents were recruited through a non-probability approach, the selection was conducted carefully (Zhou, Su, et al., 2021). The sample size was calculated using the G-Power software. With the power of 0.95 (greater than 0.80 as a requirement in social and behavioural science research) and an effect size of 0.15, a sample size of 111 was required to analyse a model with six constructs. A total of 284 respondents were sam- pled. This study also conducted a pre-test to examine the reliability and validity of each indicator before the distribution of questionnaires. Apart from survey, this study conducted structural interviews to acquire more detailed information on the com- petitive advantage and economic sustainability of halal SMEs in Indonesia. Instruments Focusing on the influence of strategic orientation on economic sustainability, partial least squares structural equation modelling (PLS-SEM) was employed in this study to assess the complex cause–effect relationships (Carrion et al., 2019). Customer orientation in this study focused on how halal SMEs understand customers’ needs through the collection of information, dissemination of customer-focused strategies, and responsiveness to the potential market ( Jeong et al., 2006). The indicators of cus - tomer orientation (six items) were derived from Jeong et al. (2006) and Tseng (2019). Furthermore, the indicators of competitor orientation (five items) were adopted from Jeong et al. (2006) and Sorensen et al. (2008). Next, the indicators of technol- ogy orientation (six items) were adopted from Jeong et al. (2006) and Masa’deh et al. (2018). For the measurement of network orientation, this study adopted indicators (five items) from Borgatti and Foster (2003). Meanwhile, the indicators of innovation orientation (six items) were derived from Bouncken and Koch (2007). Competitive advantage refers to differentiation strategy to obtain customers’ attention, cost reduc - tion, and exploitation of market opportunities for improved performance. The indica - tors of competitive advantage (seven items) in this study were extracted from Kuo et al. (2017). Lastly, economic sustainability (five items) in this study focused on the financial perspective, such as profitability, cost reduction, and management needed to focus on sustainability (Ferro et al., 2019). All above items were measured using a five-point Likert scale, which ranged from “strongly disagree” (1) to “strongly agree” (5). These items were included in the initial questionnaire. The study focused on data collection procedures, such as the purpose of the study, administration of question- naires, and ethical issues. Confidentiality of all respondents was noted. Participation in the study was strictly on a voluntary basis, and respondents were able to withdraw at any time during the study without any fear of victimisation or discrimination. The obtained data were subjected to descriptive statistical analysis, validity and reliability testing, SEM, and neural network analysis. Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 13 of 28 Common method variance (CMV) The one-factor test was utilised to estimate the issue of common method variance (CMV) (Podsakoff et al., 2003). The results of Harman’s single factor test confirmed that CMV was not severe in this study, as the uppermost factor accounted for 44.44% of vari- ance. This was lower than the suggested limit of 50% (Podsakoff et al., 2003). Results and discussion Demographic characteristics The demographic characteristics listed in Table 2 show that halal SMEs with 5–30 employees recorded the highest number of respondents with 38.7%, followed by halal SMEs with 31–60 employees with 34.2% and 60–99 employees with 77.0%. Besides, 177 halal SMEs or 62.3% have been operating their business for more than 10 years, 18.0% for around 5–10 years, while halal SMEs operating for less than 5 years registered a per- centage of below 15.0%. The majority of the SMEs were owned by owner holders (45.1%), whereas 25.7% were by directors and the remaining 13.0% were general manager and 16.0% by other parties such a government, respectively. 44.0% of the SMEs sold food and beverages, 28.9% sold clothes, while 15.1% and 12.0% were related to insurance compa- nies and banks, respectively. Furthermore, 41.5% or 118 halal SMEs generated below Rp. 10 million, 75 or 26.4% had a gross income between Rp. 10.1 million and Rp. 20 million, Table 2 Demographic characteristics Characteristics Classification N % Company size From 5 to 30 employees 110 38.7 From 31 to 60 employees 97 34.2 From 60 to 99 employees 77 27.1 Total 284 100 Number of years operating From 1 to 2 years 24 8.4 From 2 to 5 years 32 11.3 From 5 to 10 years 51 18 More than 10 years 177 62.3 Total 284 100 Respondent title Owner 128 45.1 Director 73 25.7 General manager 37 13 Other (e.g., Government.) 46 16.2 Total 284 100 Business area Food and beverage 125 44.0 Clothes 82 28.9 Insurance 43 15.1 Bank 34 12 Total 284 100 Gross income/month Rp. 1 million- Rp. 10 million 118 41.5 Rp. 10.1 million- Rp. 20 million 75 26.4 Rp. 20.1 million- Rp. 50 million 44 15.5 above Rp. 50 million 47 16.6 Total 284 100 Source: data collection Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 14 of 28 15.5% generated Rp. 20.1 million to Rp. 50 million of gross income per month and 16.6% had a gross profit of above Rp. 50 million. Validity and reliability Construct reliability was estimated using composite reliability and Cronbach’s alpha coefficient. Considering that this study employed confirmatory research design, the con - sidered criterion was that the critical ratio of a construct should be greater than 0.07, indicating adequate reliability (Hair et al., 2014). As depicted in Table 3, the Cronbach’s alpha values of all constructs exceeded 0.07, confirming adequate reliability. Meanwhile, the indicator reliability was assessed using composite reliability, whereby the criterion was that the recorded value of a construct must exceed 0.06. The results revealed the acceptability of composite reliability for all factors. Next, the convergent validity of con- structs was assessed using average variance extracted (AVE). The criterion was that the AVE value must exceed 0.50. The results revealed substantial AVE for all constructs, confirming their convergent validity. Apart from the convergent validity test, the construct validity assessment in PLS-SEM was conducted by evaluating the discriminant validity of the constructs. Discriminant validity ensures that latent variable constructs are different from one another. The results of cross-loadings were referred in this study to assess the discriminant validity of the constructs. The initial discriminant validity of the constructs was tested using another method of assessing the cross-loadings of the indicators (Hair et al., 2014). Table 4 pre- sents the results of cross-loadings. This study confirmed the discriminant validity of all constructs. The loadings of all constructs were found valid, suggesting strong relation - ships among the constructs. Testing of hypotheses As shown in Table 5, the results demonstrated the causal relationship between cus- tomer orientation and competitive advantage (H1a). The results showed the sig - nificant and positive relationship between customer orientation and competitive advantage (t = 2.032, p = 0.021). Thus, H1a was supported. The present study sup - ported the study by Lee et al. (2019), which reported the positive influence of cus - tomer orientation on economic sustainability. Similarly, the results of the current study revealed the significant and positive influence of customer orientation on Table 3 Convergent validity and reliability Constructs No. items Mean SD CA DG rho CR AVE VIF CU 4 1.775 0.811 0.824 0.830 0.883 0.653 2.858 CO 3 4.22 0.804 0.855 0.860 0.912 0.775 2.517 TO 4 3.827 0.803 0.777 0.781 0.858 0.604 2.713 NO 5 3.895 0.951 0.861 0.870 0.900 0.642 3.002 IO 4 3.872 0.936 0.866 0.868 0.909 0.714 2.928 CA 7 3.946 0.822 0.910 0.910 0.929 0.652 ES 5 3.507 1.034 0.908 0.911 0.932 0.732 CU customer orientation, CO competitor orientation, TO technology orientation, NO network orientation, IO innovation orientation, CA competitive advantage, ES economic sustainability, DG’s rho Dillon–Goldstein’s rho, SD standard deviation, CA Cronbach’s alpha, CR composite reliability, AVE average variance extracted, VIF variance inflation factor Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 15 of 28 Table 4 Loadings and cross-loadings Indicators CU CO TO NO IO CA ES Customer orientation New product ideas are derived from 0.833 − 0.650 − 0.463 − 0.543 − 0.527 − 0.408 − 0.430 market Our new products should offer superior 0.801 − 0.577 − 0.531 − 0.495 − 0.461 − 0.355 − 0.437 value to customers We develop new products that are 0.807 − 0.577 − 0.610 − 0.558 − 0.576 − 0.474 − 0.531 responsive to the customer needs We actively seek market information 0.792 − 0.627 − 0.476 − 0.450 − 0.461 − 0.405 − 0.342 to enhance our understanding of customer’ needs Competitor orientation We respond rapidly to competitive − 0.631 0.883 0.447 0.550 0.520 0.417 0.439 actions that threaten us We target customers and customer − 0.683 0.859 0.523 0.540 0.493 0.510 0.486 group in which we have or can develop a competitive advantage Top management regularly discusses − 0.664 0.898 0.479 0.544 0.559 0.487 0.447 competitors’ strength and strategies Technology orientation We build upon proven technological − 0.628 0.623 0.705 0.572 0.548 0.481 0.456 breakthroughs made by other firms We emphasise technological superiority − 0.449 0.335 0.851 0.542 0.587 0.525 0.527 to differentiate our new products We strive to achieve technological lead- − 0.457 0.328 0.833 0.549 0.583 0.566 0.537 ership in the market we compete We aggressively adopt new technolo- − 0.490 0.450 0.706 0.594 0.541 0.551 0.455 gies in their early phrases of introduc- tion Network orientation The relationship of our halal SMEs in − 0.441 0.443 0.533 0.789 0.504 0.506 0.487 network are reciprocated The relationship of our halal SMEs in − 0.463 0.407 0.666 0.754 0.572 0.495 0.570 network are strong There is information exchange between − 0.570 0.590 0.557 0.831 0.635 0.574 0.556 our halal SMEs and the network entities There is materials exchange between − 0.521 0.474 0.506 0.804 0.615 0.489 0.498 our halal SMEs and the network entities Our halal SME uses the tangible − 0.542 0.545 0.644 0.827 0.694 0.658 0.496 resources (e.g., human, financial) of other entities Of halal SMEs of organi- sational network of inter-organisational networks Innovation orientation We actively search for innovative ideas − 0.529 0.464 0.624 0.722 0.787 0.628 0.582 for novel products and services We constantly refine and develop our − 0.484 0.497 0.627 0.643 0.876 0.681 0.640 product and service portfolio We are able to initiate fast and cross- − 0.521 0.503 0.604 0.661 0.894 0.642 0.740 functional implantation of innovation All our personal is encourage to partici- − 0.608 0.549 0.608 0.538 0.819 0.614 0.610 pate in developing novel product and service ideas Competitive advantage Our halal products are difficult for com- − 0.325 0.368 0.567 0.514 0.569 0.787 0.501 petitors to copy Our response to competitive moves in − 0.424 0.456 0.588 0.567 0.659 0.848 0.546 the marketplace in good Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 16 of 28 Table 4 (continued) Indicators CU CO TO NO IO CA ES Our ability to track change in customer − 0.298 0.382 0.521 0.497 0.568 0.832 0.520 needs and wants is good We are quickly to respond to customer − 0.455 0.455 0.582 0.602 0.658 0.816 0.519 complaints Our halal product designs are unique − 0.463 0.489 0.547 0.587 0.636 0.816 0.594 Our halal products have a significant − 0.413 0.446 0.564 0.560 0.588 0.835 0.544 advantage over those of our competi- tors We make effort for halal product − 0.495 0.437 0.503 0.540 0.600 0.708 0.672 changes to overcome customers dissat- isfaction with exiting halal products Economic sustainability Our halal SMEs’ sustainable business − 0.542 0.537 0.580 0.614 0.707 0.630 0.845 practice improves cost efficiency Our halal SMEs’ sustainable business − 0.511 0.476 0.572 0.551 0.640 0.617 0.901 practice contributes positively to other aspects of halal SMEs’ business opera- tions Our halal SMEs’ sustainable business − 0.489 0.476 0.566 0.565 0.705 0.611 0.878 practices require that all direct business partners are engaged in such in such practices Our halal SMEs’ sustainable business − 0.386 0.388 0.494 0.532 0.598 0.552 0.841 practices are derived from corporate polices Our halal SMEs’ sustainable business − 0.376 0.336 0.508 0.503 0.597 0.548 0.809 practices are based on long-term busi- ness perspectives CU customer orientation, CO competitor orientation, TO technology orientation, NO network orientation, IO innovation orientation, CA competitive advantage, ES economic sustainability economic sustainability (t = 2.038, p = 0.022), which supported H1b. Besides that, competitor orientation was found to exhibit significant and positive influence on competitive advantage (H2a) (t = 1.917, p = 0.028) and economic sustainability (H2b) (t = 1.905, p = 0.029). These findings were found to be consistent with the findings reported by Tseng et al. (2021) on the important role of the RBV in describing the capabilities to understand consumers’ needs towards achieving competitive advan- tage and sustainability. Based on the results of the current study, both H2a and H2b were accepted. Meanwhile, technology orientation was found to exhibit significant and positive effects on competitive advantage (H3a) (t = 4.217, p = 0.000) and economic sustain- ability (H3b) (t = 4.107, p = 0.000). In other words, H3a and H3b were accepted. Park and Zhang (2022) stated that implementing new technologies of halal SMEs can ena- ble businesses to gain competitive advantage and economic sustainability, as well as long-term profits. Likewise, network orientation was found to exhibit significant and positive effects on competitive advantage (H4a) (t = 2.000, p = 0.023) and economic sustainability (H4b) (t = 1.979, p = 0.024). These results supported both H4a and H4b. This study also demonstrated the significant and positive influence of innovation ori - entation on both competitive advantage (H5a) (t = 5.110, p = 0.000) and economic sustainability (H5b) (t = 4.904, p = 0.000). This present study supported the study of Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 17 of 28 Table 5 Path coefficients 2 2 2 Hypo Path Beta t p r f Q Decision Direct effect H1a CU → CA 0.149 2.032 0.021 0.021 Supported H1b CU → ES 0.103 2.038 0.021 H2a CO → CA 0.135 1.917 0.028 CA = 0.628 0.020 CA = 403 Supported H2b CO → ES 0.094 1.905 0.029 H3a TO → CA 0.249 4.217 0.000 ES = 0.479 0.063 ES = 0.346 Supported H3b TO → ES 0.173 4.107 0.000 H4a NO → CA 0.160 2.000 0.023 0.023 Supported H4b NO → ES 0.111 1.979 0.024 H5a IO → CA 0.471 5.110 0.000 0.208 Supported H5b IO → ES 0.327 4.904 0.000 H6 CA → ES 0.693 21.950 0.000 0.926 Supported Mediation effect No. Path Beta t p Mediation H7a CU → CA → ES 0.103 2.038 0.021 Mediation H7b CO → CA → ES 0.094 1.905 0.029 Mediation H7c TO → CA → ES 0.173 4.107 0.000 Mediation H7d NO → CA → ES 0.111 1.979 0.024 Mediation H7e IO → CA → ES 0.327 4.904 0.000 Mediation CU customer orientation, CO competitor orientation, TO technology orientation, NO network orientation, IO innovation orientation, CA competitive advantage, ES economic sustainability, t t statistics, p probability/p value, beta path coefficient, 2 2 2 R R squared/determinant coefficient, f effect size, Q quality criteria model, decision decision of hypothesis testing Haffar et al. (2022), which pointed out that organisations in any level should have enough information and network to expand and create strategic position in a highly competitive market. Thus, both H5a and H5b were accepted. Besides that, the results further indicated the significant and positive influence of competitive advantage on economic sustainability (t = 21.950, p = 0.000). Thus, H6 was accepted. Desiana et al. (2022) claimed that a new business must gain and adopt innova- tion capability, and the collaboration between innovation and knowledge helps a start- up achieve competitive advantage and sustainability. Focusing on exploring external and internal resources, innovation can help halal SMEs to create competitive advantage and economic sustainability (Mu et al., 2017). Next, effect size (f ) was calculated according to the criterion suggested by Cohen (1988): the value of effect size can be substantial (0.35), medium (0.150), or small (0.02). Table 5 presents the results of effect size. The f value of around 0.40 showed that all constructs in this study had small effect size on economic sustainability. According to Hair et al. (2014), the blindfolding procedure demonstrates how the values of constructs are well-observed by reconstructing the estimates of the parameters. This procedure can only be applied to endogenous constructs with reflective indicators. The predictive rel - evance of a model in this study was collectively calculated using the predictive relevance (Q ) of all factors at the individual level (single factor). Referring to Table 5, the obtained results of the blindfolding procedure revealed substantial predictive relevance of the model at 0.403%, confirming the integration of the predictors of halal entrepreneurial Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 18 of 28 performance. Therefore, all exogenous variables exhibited small level of predictive rel - evance with the respective endogenous variables. Mediation effect The obtained results of this study revealed the mediation effect of competitive advan - tage on the relationship between customer orientation and economic sustainability ( β = 0.103 , p = 0.021). Moreover, competitive advantage mediated the relationship between competitor orientation and economic sustainability (β = 0.094, p = 0.029). Simi- larly, competitive advantage mediated the relationship between technology orientation and economic sustainability (β = 0.173, p = 0.000) and the relationship between network orientation and economic sustainability (β = 0.111, p = 0.024). Finally, this study also demonstrated the mediation effect of competitive advantage on the relationship between innovation orientation and economic sustainability (β = 0.327, p = 0.000). Table 5 pre- sents the results on mediation effects, which supported H7a, H7b, H7c, H7d, and H7e. Mukhsin and Suryanto (2022) stated the crucial roles of technology, innovation, and network (internal resources) as well as customer orientation and competitor orientation (external resources) for SMEs to achieve competitive advantage by stimulating creative and innovative thoughts of achieving economic sustainability among entrepreneurs. Neural network analysis This section of the analysis focused on predictive accuracy, estimated with the data parted in training and testing of the data. Root mean square of error (RMSE) values for training and testing (see Table 6) of the data describe the relative accuracy of the predic- tion (Hayat et al., 2021). Small and close values of RMSE for trained and test part of data show the high prediction accuracy of the data fitness (as presented in Table 6). Sensitivity analysis utilised to evaluate the contribution of each exogenous predictor for the endogenous construct (Hayat et al., 2021). Findings presented in Table 7 con- firmed that the most influential variable for halal SME’s competitive advantages is inno - vation orientation, followed by technology and network orientation. As for economic sustainability of the halal SMEs, innovation orientation is the most influential variable, followed by competitive advantages and network orientation. Discussion The purpose of this study was to examine the mediation effects of competitive advantage on the relationship between strategic orientation (customer orientation, competitor ori- entation, technology orientation, network orientation, and innovation orientation) and economic sustainability of halal SMEs. This study proposed RBV to explain the roles of halal SME owners’ capabilities of implementing strategic orientation and competitive advantage towards economic sustainability in this highly competitive market (Barney, 1991). The results of this study confirmed that competitive advantage and sustainability can be obtained when halal SMEs are supported by capabilities. Moreover, this study contributed to the quadruple and quintuple innovation helix concepts that explain the crucial roles of environment, policies, and knowledge for SMEs to gain sustainability. Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 19 of 28 Table 6 RMSE values of artificial neural networks (N = 284) Network Sample Sample RMSE RMSE Sample Sample RMSE RMSE size size (training) (testing) size size (training) (testing) (training) (testing) (training) (testing) Model A: factors effecting competitive advantage Model B: factors effecting economic sustainability 1 194 90 0.437 0.382 203 81 0.414 0.414 2 202 82 0.439 0.409 188 96 0.433 0.437 3 187 97 0.429 0.420 193 91 0.469 0.438 4 199 85 0.439 0.369 197 87 0.441 0.469 5 205 79 0.496 0.469 187 97 0.455 0.454 6 208 76 0.463 0.380 199 85 0.476 0.531 7 200 84 0.458 0.388 192 92 0.427 0.408 8 202 82 0.496 0.494 196 88 0.479 0.452 9 202 82 0.452 0.471 196 88 0.447 0.470 10 190 94 0.399 0.547 196 88 0.462 0.421 Mean 0.451 0.433 Mean 0.450 0.449 Standard deviation 0.030 0.059 Standard deviation 0.022 0.036 Source: author’s data analysis Innovation and knowledge can help halal SMEs to expand their market locally and glob- ally (Carayannis & Campbell, 2011). Therefore, this study proposed the significance of innovation, strategic orientation, and knowledge for economic sustainability. This study demonstrated the significant influence of strategic orientation on economic sustainability of halal SMEs. The results of this study confirmed the significant medi - ating role of competitive advantage in increasing the performance and promoting eco- nomic sustainability among halal SMEs. Similarly, Deyganto (2022) found that SMEs strategic orientation has a significant effect on the economic sustainability and growth among others. Furthermore, Daengs et al. (2019) argued that competitive advantage is a consequence of the existing value of potential competitors with strategic differentiation to win this intense competition. The current study showed the significant contributions of customer orientation and competitive advantage on economic sustainability. The pre - sent study supported the study by Lee et al. (2019), which stressed the significance of customer orientation in creating long-term profit and economic sustainability for halal SMEs to avoid falling into the trap of adopting short-term approaches. Apart from that, this study emphasised the significant contribution of competitor orientation on eco - nomic sustainability of halal SMEs through the adoption of competitive advantage. This study also found the significant relationship of competitor orientation with competitive advantage and sustainability. Tseng et al. (2021) reported similar findings on how the RBV can explain the relationship between competitor orientation, as external resource, and competitive advantage. Through competitor orientation and innovation, SMEs obtain information to apply long-term strategies and intelligence for approaches to envi- ronmental benefits that are preferred by customers. Competitor orientation is crucial for competitive activities and strategies. Through competitor orientation, halal SMEs focus on increasing their strategy and diversifying their products and services. Besides that, this study found the positive and significant influence of technology orientation on competitive advantage and sustainability. Technological and innovative Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 20 of 28 Table 7 Sensitivity analysis Network CU CO TO NO IO CU CO TO NO IO CA Factors effecting competitive Factors effecting economic sustainability advantage 1 0.14 0.14 0.18 0.11 0.43 0.18 0.21 0.09 0.16 0.24 0.13 2 0.09 0.14 0.20 0.13 0.45 0.11 0.14 0.08 0.14 0.43 0.11 3 0.13 0.08 0.21 0.19 0.39 0.03 0.12 0.11 0.30 0.26 0.18 4 0.10 0.17 0.28 0.15 0.31 0.11 0.06 0.05 0.22 0.35 0.21 5 0.04 0.04 0.19 0.41 0.32 0.09 0.11 0.02 0.14 0.35 0.30 6 0.05 0.19 0.28 0.05 0.43 0.13 0.09 0.07 0.25 0.14 0.32 7 0.09 0.23 0.11 0.15 0.42 0.20 0.11 0.08 0.12 0.28 0.22 8 0.12 0.17 0.25 0.29 0.18 0.26 0.02 0.07 0.01 0.26 0.39 9 0.10 0.04 0.22 0.26 0.38 0.10 0.13 0.09 0.13 0.27 0.28 10 0.13 0.26 0.13 0.14 0.34 0.17 0.10 0.12 0.04 0.31 0.27 Mean importance 0.10 0.14 0.20 0.19 0.37 0.14 0.11 0.08 0.15 0.29 0.24 Factors effecting competitive Factors effecting economic sustainability advantage 1 33% 31% 42% 25% 100% 77% 90% 36% 66% 100% 57% 2 19% 31% 45% 30% 100% 24% 31% 17% 33% 100% 26% 3 34% 21% 53% 49% 100% 9% 39% 37% 100% 86% 60% 4 30% 53% 88% 48% 100% 31% 16% 15% 62% 100% 61% 5 9% 11% 46% 100% 78% 25% 30% 5% 39% 100% 85% 6 12% 44% 66% 11% 100% 41% 30% 24% 78% 44% 100% 7 22% 54% 25% 36% 100% 70% 38% 28% 43% 100% 79% 8 42% 59% 88% 100% 61% 65% 6% 17% 3% 66% 100% 9 25% 10% 59% 70% 100% 36% 48% 31% 47% 95% 100% 10 39% 76% 39% 39% 100% 54% 34% 38% 13% 100% 88% Relative impor- 26% 39% 55% 51% 94% 43% 36% 25% 48% 89% 76% tance CU customer orientation, CO competitor orientation, TO technology orientation, NO network orientation, IO innovation orientation, CA competitive advantage, ES economic sustainability Source: author’s data analysis Fig. 1 Research framework Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 21 of 28 activities and the potential for both radical and incremental changes are central for the sustainability of halal SMEs. This study also found the significant influence of technology orientation on economic sustainability, such as technological superiority to differentiate new products. This study supported the findings of Park and Zhang (2022) on technol - ogy as a strong attribute of social elements and new information and communication. Technologies provide positive benefits for businesses to increase their acceptability and sustainability. Moreover, the adoption of new technologies helps halal SMEs to gain competitive advantage and economic sustainability. Adding to that, this study pointed out the significant effect of network and competitive advantage and sustainability. The information exchange between halal SMEs and network actors, such as capabilities, devices, and other materials, is essential in building economic sustainability. Network orientation can be successfully implemented to achieve a strategy when an organisation is able to combine networking capability and human networking. This finding was found to be in line with the finding of Haffar et al. (2022) on the necessity of network orienta - tion for knowledge transfer, helping SMEs to innovate and move towards what strategies needed to implement in a hyper-market competition. The study also found that organi - sations require information about market conditions and customers’ needs, suggesting the importance of network orientation. This study demonstrated the significant and positive influence of innovation orienta - tion on competitive advantage and economic sustainability. Desiana et al. (2022) showed that enterprises should increase and gain innovation capability to capture what is hap- pening in the ecosystem and combine it with internal resources to innovate. Moreover, the collaboration between innovation and capabilities can achieve competitive advan- tage and sustainability. Therefore, this study focused on the dynamic capability perspec - tive of a greater insight on how strategic orientation influences economic sustainability. Focusing on exploring external and internal resources, halal SMEs can ensure resource complementary for competitive advantage and economic sustainability (Mu et al., 2017). The current study’s findings on the significant influence of innovation orientation on economic sustainability contributed to the strategic literature. Samsir (2018) stated that entrepreneurs must have an open mindset, such as gaining new ideas and improving learning capability in order to implement the ideas to achieve strategic differentiation. Furthermore, this study argued that competitive advantage is a crucial factor in the relationship between strategic orientation and economic sustainability. Theoretically, the integration of competitive advantage as a mediator in this study extended the RBV theory and literature on dynamic capability. This study concluded the significant role of competitive advantage in mediating the relationship between strategic orientation and economic sustainability. Additionally, the current study extended the halal entre- preneurship literature through human network, network capability, and competitive advantage in the digitalisation era. Besides that, this study demonstrated the mediating role of competitive advantage. Halal SMEs need to recognise the importance of competi- tive advantage by transforming new systems in manufacturing, product delivery system, and online sales platform of halal products in order to accomplish strategic diversifi - cation and innovation (Mukhsin & Suryanto, 2022). SMEs should also consider using technology, innovation, and network (internal resources) as well as customer orienta- tion and competitor orientation (external resources) as support systems to reinforce the Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 22 of 28 willingness of customers to purchase halal products. Competitive advantage stimulates creative and innovative thoughts to experiment with new strategies among entrepre- neurs. Hence, SMEs can unlock their learning potential in new halal product develop- ment and subsequently, achieve economic sustainability. Therefore, SMEs offer the best solutions to the country’s gross domestic development, reduction of unemployment, and creating smooth economic environment (Kassa, 2021). Furthermore, Kostis (2021) stated that SMEs and society are not ready to accept policy change, which would result in policy failure as well as ineffective policy responses, innovation outcomes, and eco - nomic development, affecting the sustainability of the overall economic system. Conclusions Halal SME entrepreneurs need to be competent and continue improving their techno- logical skills and implementing strategies and innovations. The local, global and compet - itive landscapes have been transformed by the influence of knowledge, innovation, and strategy. The government, ecological democracy, and society also play a major role in creating an environment that supports strategy and innovation for halal SMEs to achieve economy sustainability. Theoretical implications This study contributed to the existing literature on strategic management and identified resource-based approach (owners’ capabilities). The quadruple and quintuple innova - tion helix concepts (democracy of knowledge, ecosystem, innovation, and knowledge) are two important basic theories that explain strategic orientation, competitive advan- tage, and economic sustainability of halal SMEs. This study developed RBV through competitive advantage as a mediator, and this study found that all constructs increase the economy sustainability of halal entrepreneurship. Competitive orientation, customer orientation, competitor orientation, network orientation, innovation orientation, and technological turbulence can adequately improve the survival and sustenance of halal enterprises into an unforeseeable future. Resource capability and competitive advan- tage can improve the efficiency of enterprises. Strategic orientation is an attribute that can adequately improve the competitive advantage of halal enterprises. Moreover, the quadruple and quintuple innovation helix concepts explain the significant roles of envi - ronment, policy, and knowledge for SMEs to gain sustainability. The democracy of inno - vation, knowledge, and strategy help halal SMEs to expand their market and position in hyper-competitive market. Practical implications This study offered several recommendations for halal small businesses to remain sus - tainable or competitive through strategy orientation. The study also presented rel - evant recommendations for policymakers and other concerned bodies. Based on the findings of this study, innovation, customer, competitor, network, innovation, and competitive intensity are critical in determining the robustness of resource capability. These aspects adequately improve the growth of sales and the survival and sustenance of halal enterprises into an unforeseeable future, as well as the efficiency of enterprises Y ang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 23 of 28 and competitive advantage of halal enterprises, particularly in trying to be different from other competitors. Additionally, decisions on the survival of enterprises into an unforeseeable future, resource capability of competitive advantage and environmental turbulence should be prioritised. Finally, when it comes to the decisions on economic sustainability, resource capability of strategic orientation should be the main focus. Social, policy, and science implications This present study’s findings also contribute to the social environment. Halal SMEs should focus on strategic orientation by combining internal resources (innovation and network) and external resources (customer orientation and competitor orientation) to gain competitiveness and sustainability. Secondly, customers have been increasingly aware with healthy consumption and habit of purchasing halal products. Consuming halal products can create an eco-friendly system that creates positive life circumstances. Additionally, this study suggested a few policies. Firstly, the regulation maker of halal certification (Islamic Council of Indonesia) serves as an important strategic institution for sustainability by proposing and educating customers to consume healthy and halal products. Secondly, education is a central plot for new start-ups to obtain entrepre- neurial knowledge and training. Thirdly, the government should provide infrastructure development and policies of halal products, which focus on innovation, competition, and growth of SMEs, for halal enterprises to make significant contributions towards eco - nomic sustainability. Additionally, the government can support halal SMEs to invest in modern production facilities (processes, equipment, and technologies) in order to have capabilities and capacities of local industries that meet international quality standards, resulting in more halal SMEs that are able to enter new export markets. Moreover, the government, society, and SMEs should increase knowledge, innovation, and culture change to gain their market share locally and globally and expand the performance and economic sustainability of SMEs. This study also recommended that science and halal SMEs focus on implementing strategies, as these strategies facilitate SME managers or owners to design, develop, and enhance resource-based approach and capabilities. With respect to the quadruple and quintuple innovation helix concepts, establishing science and knowledge in universities can be helpful for quicker exchanges or interactions of strategies and capabilities among universities, industries, the government, and actors of SMEs. Last but not the least, the developed questionnaire in this study served as a tool to discover shortcomings and defi - ciencies in the path of promoting sustainability in science and SMEs. Overall, policy, education and training, and infrastructure development should focus on halal SME innovation, competition, and sustainability for halal enterprises to make significant contributions towards social implementation. Limitations of study and recommendations for future research This study encountered a few limitations. Cross-sectional data were obtained from 284 halal SMEs in Indonesia. Thus, a larger sample is recommended for future research to generalise and better understand the implementation of strategic orientation and policy decision-making for halal SMEs. Secondly, competitive orientation, customer Yang et al. Journal of Innovation and Entrepreneurship (2022) 11:44 Page 24 of 28 orientation, competitor orientation, network orientation, innovation orientation, and technological orientation were employed in this study to explore the role of strategic orientation as well as the mediating role of competitive advantage. Additionally, the profitability and cost reduction were employed in this study to represent economic sus - tainability. Therefore, other indicators of economic sustainability can be implemented to achieve various outcomes. Lastly, the dynamic capability approach can be explored in relation to the economic sustainability of halal enterprises in developing and developed countries. Abbreviations SME Small and medium enterprise PLS-SEM P artial least squares structural equation modelling RBV Resource-based view CMV C ommon method variance AVE Average variance extracted CU Customer orientation CO Competitor orientation TO Technology orientation NO Network orientation IO Innovation orientation CA Competitive advantage ES Economic sustainability DG’s rho Dillon– Goldstein’s rho SD Standard deviation CA Cronbach’s alpha CR Composite reliability VIF Variance inflation factor Beta (β) P ath coefficient RMSE Root mean square of error Acknowledgements None. Author contributions MY, NZ, AAS and NRZ focused on conceptualisation, methodology, resources, and writing—original draft preparation, AAM focused on conceptualisation, methodology, and writing—review and editing. All authors read and approved the final manuscript. Funding No funding. Availability of data and materials Data will be available on request. 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Journal of Innovation and Entrepreneurship – Springer Journals
Published: Jun 21, 2022
Keywords: Consumer orientation; Competitor orientation; Technology orientation; Network orientation; Innovation orientation; Competitive advantage; Economic sustainability
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