The Role of Innovation Capability and Social Media Orientation in Mediating Market Orientation and Digital Leadership on Business Performance: Evidence from Women-Led Seafood Processing SMEs

Abstract

This study examines the influence of market orientation and digital leadership on the business performance of women-led seafood processing SMEs in coastal areas of Pandeglang Regency, Indonesia, with innovation capability and social media orientation as mediating variables. The study is motivated by the persistent gap between the region’s substantial marine resource potential and the relatively low economic welfare of local communities, particularly women entrepreneurs operating in informal and resource-constrained environments. A quantitative approach was employed using data from 255 respondents selected through accidental sampling. The data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) to examine both direct and indirect relationships. The findings reveal that market orientation and digital leadership do not have a direct effect on business performance. However, both variables significantly influence innovation capability and social media orientation. Furthermore, innovation capability and social media orientation have positive and significant effects on business performance. Mediation analysis confirms that both variables fully mediate the relationship between market orientation, digital leadership, and business performance. These results indicate that strategic orientation and leadership contribute to performance indirectly through capability-based mechanisms. This study contributes to the literature by integrating a gender perspective into SME performance research and extending the Resource-Based View and Dynamic Capabilities Theory. It highlights the critical role of innovation capability and digital engagement in transforming strategic resources into performance outcomes. Practically, the findings underscore the importance of strengthening innovation capability and digital literacy to enhance SME competitiveness and sustainability in coastal economies.