Projecting Experience of Technology-Based MSMEs in Indonesia: Role of Absorptive Capacity Matter in Strategic Alliances and Organizational Performance Relationship

Abstract

This paper investigates absorptive capacity’s significance in mediating strategic alliance and organizational performance using the partial least square structural equation model (PLS-SEM) Warp PLS 7.0. The online and offline questionnaires were distributed to 308 Indonesian MSME owners/managers. The results suggest that strategic alliance directly influences the organizational performance of MSME’s technology-based in Indonesia. Further analysis attests that absorptive capacity partially mediates strategic alliance and organizational performance relationships; this research is specific to MSMEs in Indonesia, and thus generalization to other countries needs further verification. MSME’s owners or managers can use the knowledge on the relationship between the strategic alliance and organizational performance, including absorptive capacity in mediating the relationship, for policymaking and manifesting strategic alliances through collaboration with partners to achieve companies’ common goals is also highly recommended.