Strategic Capabilities and Muslim Entrepreneurial Behavior: The Mediating Role of Competitive Advantage on MSME Performance

Nurfadilah Sindika Sari (Universitas Tadulako, Indonesia)
Muhammad Akbar (Universitas Tadulako, Indonesia)
Rizkiani Iskandar (Universitas Tadulako, Indonesia)
Ayu Putri Utami (Universitas Tadulako, Indonesia)
Efriza Pahlevi Wulandari (Universitas Tadulako, Indonesia)

Indonesian Journal of Business and Entrepreneurship Research
Vol. 4 No. 1 (2026): Vol. 4, No. 1, February 2026: Indonesian Journal of Business and Entrepreneursh

This study examines the effects of product innovation, digital marketing, and Muslim entrepreneurial behavior on the performance of Sharia-based MSMEs, with competitive advantage serving as a mediating variable within the Resource-Based View (RBV) framework. A quantitative explanatory approach was employed using a census of 153 fashion-sector MSMEs. Data was collected through Likert-scale questionnaires and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that product innovation and Muslim entrepreneurial behavior have a positive and significant effect on MSME performance, while digital marketing does not show a significant direct effect. Competitive advantage positively influences performance but only mediates the relationship between Muslim entrepreneurial behavior and performance; it does not mediate the effects of product innovation and digital marketing. These findings suggest that Muslim entrepreneurial behavior functions as an intangible strategic resource that builds Sharia-based reputational capital and enhances firm performance. This study extends the RBV framework within the Islamic economics context by highlighting the strategic role of Islamic values in shaping MSME capabilities and performance.