The Impact of Environmental Dynamism, Social Capital on Competitive Advantage through Absorptive Capability, Knowledge Sharing and Entrepreneurial Orientation

Abstract

A resource-based perspective emphasizes the importance of a firms having unique resources and capabilities in order to gain above-average performance. Environmental dynamism  and social capital are unique resources that can be utilized by companies to have a competitive advantage. This study aims to determine the mediating role of absorptive capability, knowledge sharing and entrepreneurial orientation in generating competitive advantage at local startup companies. The research used quantitative method, with 208 samples taken purposively from top managers in local startup companies and structural equation modeling was used to test the data. The results show that absorptive capability was better than entrepreneurial orientation and knowledge sharing when mediated the relationship of social capital and environmental dynamism on competitive advantage. In the early stages, startups need to build absorptive capabilities. Knowledge sharing acts as a driving force for entrepreneurial orientation but does not have a significant direct influence on absorptive capability and competitive advantage. Future research is expected to examine the factors that influence competitive advantage in startups by use different proxy from performance measurements