The Role of Innovation in Mediation of the Influence of Human Resources Competence and Social Capital on the Sustainability of SMEs in the City of Denpasar, Bali-Indonesia

Innovation, human resource competence, social capital, business continuity, culinary SMEs

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August 18, 2022

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This study aims to examine and analyze the effect of human resource competence and social capital on business sustainability by mediating innovation variables. Business sustainability is a form of consistency of the condition of a business where sustainability is a process of on going business both including growth, development, strategies to maintain business continuity and development, all of which aim at the existence (resilience) of the business. RBV theory which states that a business that has resources can make the business have a competitive advantage and be able to direct the business in a good long term (business continuity). The analytical tool used in this research is Smart PLS analysis. The population in this study is the culinary SME business actors in Denpasar City. The results show that 1) Human resource competence has a negative and insignificant effect on the sustainability of the culinary SME business in Denpasar. 2) Social capital has a positive and significant effect on the business continuity of culinary SMEs in Denpasar. 3) Human resource competence has a positive and significant effect on innovation of culinary SMEs in Denpasar. 4) Social capital has a positive and significant effect on innovation of culinary SMEs in Denpasar. 5) Innovation has a positive and significant impact on the business continuity of culinary SMEs in Denpasar. 6) Innovation acts as a perfect mediator on the influence of human resource competence on the business continuity of culinary SMEs in Denpasar.