Exploring the impact of managerial abilities on the competitive advantage and performance of creative industries in Indonesia during the post-pandemic recovery phase

Abstract

In the pre-COVID-19 era, the creative fashion industry stood as a robust pillar in Indonesia's economy, contributing to over 50 percent of the nation's creative economy exports. Batik clothing and hijabs were at the forefront, emerging as the key export products. However, with the advent of the COVID-19 pandemic, this once thriving sector suffered substantial setbacks. This study aims to investigate how managerial ability influences competitive advantage, and whether the performance of that small-medium creative sectors is directly affected by managerial ability or indirectly through the mediation of competitive advantage. Our study aims to extent the existing studies by focusing on the sustained resilience of businesses in a post-pandemic. The study's sample consists of 134 Batik business owners and/or managers from East Java, Indonesia. The gathered data was then processed and analyzed using a structural equation model. Although the findings indicated that managerial ability did not directly affect business performance, there was a positive relationship between managerial ability and business performance when mediated by the competitive advantage. These findings suggest that competitive advantage continues to play a crucial role in business performance. The higher the managerial ability, the greater the potential to enhance their competitive, which in turn escalates their performance.