Agus Syarip Hidayat
ABSTRACT
This paper examines the effect of collaborative advantage (CA) on Small Medium Enterprises (SMEs) performance. Prior examining this effect, the conceptualization of CA model is investigated. Based on a questionnaire survey from the Indonesian SMEs automotive component industry, the analysis is conducted using PLS-SEM two stage reflective-formative Hierarchical Component Model (HCM). By taking account the unique features of SMEs, we conceptualized CA of SMEs in eight constructs (collaborative commitment, collaborative efficiency agreement, collaborative risk sharing, collaborative planning, collaborative resource sharing, collaborative relational capital, collaborative information & knowledge sharing, collaborative synchronizing response) and further re-categorise it into three pillars (inter-firm trust, dynamic synchronization and resources investment). The empirical findings show that CA is positively and significantly affecting SMEs performance, and the effect is stronger when the firm's capability is taken into account. This study contributes to the theory of CA by reformulating the CA constructs that fit for SMEs to strengthen inter-firm trust building and to synchronize the firms' response on external factors change.
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