Micro, Small and Medium Enterprises (MSMEs) have a very important role for a country. This research aims to examine the variables that influence the business performance of MSMEs. This research uses a causal design approach to test the relationship between independent variables and dependent variables using Structural Equation Modeling (SEM) with the AMOS 24 statistical tool. The number of samples used in this research was 300 respondents from MSME activists in Indonesia. This research will also develop a model that looks at the indirect influence of dynamic capabilities, competitive advantages and innovation capability as mediating variables through a more comprehensive measurement construct so as to provide a broader perspective on results compared to previous research.
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