The Impact of External Integration and Internal Integration to Product Innovation and Competitive Advantage on Small and Medium Enterprises (SMEs)

Chamdan Purnama, Ludi Wishnu Wardana, Yusriyah Rahmah, Dinda Fatmah and Mirhamida Rahmah
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Chamdan Purnama: School of Economics Al-Anwar Mojokerto, Indonesia
Ludi Wishnu Wardana: Faculty of Economics, State University of Malang, Indonesia
Yusriyah Rahmah: Faculty of Computer Science, University of Brawijaya Malang
Dinda Fatmah: School of Economics Al-Anwar Mojokerto, Indonesia
Mirhamida Rahmah: School of Economics Al-Anwar Mojokerto, Indonesia

International Journal of Innovation and Economic Development, 2020, vol. 6, issue 4, 82-95

Abstract: This study aims to analyze the influence of external integration and internal integration to product innovation and competitive advantage. The research was conducted on a sample of 180 manager small and medium enterprises (SMEs) in East Java clothing taken with stratified cluster sampling technique. Selection of sample areas based on areas that have the potential development of the industry. Data collection was done by using questionnaire that has been tested for its validity and reliability. Data analysis used Structural Equation Modeling (SEM) analysis with help of AMOS version 21 program. Based on the analysis of SEM, it was found that the first, external integration influence on product innovation SMEs and affect the competitive advantage of SMEs. Second, the internal integration effect on product innovation SMEs and affect the competitive advantage of SMEs. Third, product innovation SMEs effect on the competitive advantage of SMEs. In this respect, the company needs to build a collaboration of external integration and internal integration in order to improve product innovation and competitive advantage of SMEs.

Keywords: External integration (EI); Internal integration (II); Product innovation (PI); Competitive advantage (CA); Small and medium enterprises (SMEs) (search for similar items in EconPapers)
JEL-codes: M00 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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