Factors affecting batik SME performance and sustainability: The role of government support and business associations

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Batik SMEs, especially in Solo Raya, Indonesia, face challenges in business sustainability. Considering that batik is one of Indonesia’s cultural heritages, maintaining the sustainability of batik SMEs means contributing to the preservation of batik culture. Therefore, the study aimed to analyze the influence of entrepreneurial leadership, social capital, and digital literacy on the sustainability of batik SMEs mediated by business performance and moderated by government support and the role of business associations. The quantitative method is used with SEM-PLS analysis. The population included 273 owners and managers of batik SMEs in Solo Raya, Central Java, Indonesia; 155 were used as the research sample. Data were collected through questionnaires conducted online through Google Forms and offline face-to-face. This study found that entrepreneurial leadership and social capital positively and significantly affect performance. Entrepreneurial leadership and business performance have a positive and significant effect on sustainability. Performance mediates the impact of entrepreneurial leadership and social capital on sustainability. In contrast, government support weakens the impact of entrepreneurial leadership on sustainability in its moderating role. This study confirms the ability of batik SMEs in Solo Raya to sustain their business by referring to the resource-based view, survival-based, social capital, and sustainability theories.

Acknowledgment
The authors would like to acknowledge Universitas Kristen Satya Wacana [Satya Wacana Christian University] for providing the opportunity to conduct this analysis. Batik business associates are acknowledged for their willingness to be respondents and facilitate this investigation. Additionally, the support of the SME department is recognized in granting permission and assisting in facilitating this analysis.

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    • Figure 1. Conceptual model
    • Table 1. AVE, CR, and VIF values
    • Table 2. HTMT values
    • Table 3. Hypotheses testing
    • Conceptualization
      Suprayitno
    • Data curation
      Suprayitno
    • Investigation
      Suprayitno, Christantius Dwiatmadja, Lieli Suharti
    • Methodology
      Suprayitno, Christantius Dwiatmadja, Lieli Suharti
    • Resources
      Suprayitno
    • Validation
      Suprayitno, Christantius Dwiatmadja, Lieli Suharti
    • Visualization
      Suprayitno
    • Writing – original draft
      Suprayitno
    • Writing – review & editing
      Suprayitno, Christantius Dwiatmadja, Lieli Suharti
    • Formal Analysis
      Christantius Dwiatmadja, Lieli Suharti
    • Supervision
      Christantius Dwiatmadja, Lieli Suharti
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