The Impact of Social Media Adoption on Innovation Quality and Business Performance in Bali’s Handcrafted Jewelry SMEs: A Dynamic Capability Perspective

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Nilna Muna
Nyoman Sri Subawa
Ida Bagus Raka Suardana
Ni Wayan Lasmi

Abstract

This study examines the impact of social media adoption on innovation quality and business performance among small and medium-sized enterprises (SMEs) in Bali’s handcrafted jewelry sector. Grounded in Dynamic Capability Theory, the research employs a quantitative approach, collecting data from 236 owner-managers through a structured online survey using convenience sampling. The numerical data collected were subsequently analyzed using AMOS 23 software. The findings indicate a significant positive relationship between social media adoption and innovation quality, suggesting that effective use of digital platforms enhances creativity and product development. Additionally, innovation quality positively influences market entry speed and overall business performance, highlighting its critical role in achieving a competitive advantage. This research contributes to the literature by clarifying how social media drives innovation in creative industries. It also addresses the limitations of convenience sampling, recommending that future studies utilize random sampling methods to improve generalizability across various sectors. The implications of this study are particularly relevant for policymakers and practitioners seeking to leverage social media for fostering innovation and enhancing the performance of SMEs in the creative economy.

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