<![CDATA[Purpose – This study aims to analyze and explain the effects of dynamic capabilities, entrepreneurial orientation, and innovation on the business performance of Creative Economy MSMEs in Malang City. The research seeks to identify the strategic capabilities that enable MSMEs to improve competitiveness and achieve superior business performance amid increasingly intense market competition. Design/Methodology/Approach – This study employs a quantitative explanatory research design to examine the causal relationships between the independent variables and business performance. Using Roscoe’s Rules of Thumb, a sample of 150 Creative Economy MSMEs in Malang City was selected through non-probability purposive sampling, with most respondents affiliated with the Malang Creative Center (MCC). Research instruments were tested for validity and reliability, followed by classical assumption tests. Data were analyzed using multiple linear regression for hypothesis testing and descriptive statistical analysis to classify respondents’ responses. Findings – The findings indicate that dynamic capabilities, entrepreneurial orientation, and innovation each have a positive and significant effect on business performance. These results demonstrate that MSMEs with stronger adaptive capabilities, entrepreneurial behavior, and innovation capacity achieve better business performance in the creative economy sector. Originality/Value – This study contributes to strategic management and entrepreneurship literature by integrating dynamic capabilities, entrepreneurial orientation, and innovation into a single analytical framework within the context of Creative Economy MSMEs in Malang City. The findings provide practical implications for MSME owners and policymakers by emphasizing the importance of strengthening organizational capabilities and innovation to improve competitiveness and sustainable business performance.]]>
