Innovation Capability, Green Innovation, and Property Business Performance: Mediating Role of Competitive Advantage

Dwi Retno Setyaningsih; Sabihaini Sabihaini; Heru Kristanto

doi:10.32535/ijabim.v11i2.4664

Innovation Capability, Green Innovation, and Property Business Performance: Mediating Role of Competitive Advantage

Dwi Retno Setyaningsih, Sabihaini Sabihaini, Heru Kristanto

Abstract

The property industry faces growing demands to integrate sustainability into business strategy. This study examines the effects of innovation capability and green innovation on business performance, mediated by competitive advantage, in the property industry of the Special Region of Yogyakarta (DIY). A quantitative explanatory design was applied, with landed housing projects as the unit of analysis. Data comprised 141 project-level responses covering 141 active landed housing projects, collected through a key informant approach and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that innovation capability significantly affects competitive advantage, while competitive advantage significantly affects business performance. Competitive advantage demonstrates indirect-only mediation (full mediation) between innovation capability and business performance. Green innovation, by contrast, does not significantly affect competitive advantage or business performance, either directly or through the mediating pathway. Innovation activities appear to function as integrative capabilities rather than separate practices. These findings confirm the Resource-Based View proposition that internal resources require conversion through competitive advantage. They also reveal the contextual limitations of applying the Natural Resource-Based View in regional property markets that remain price-sensitive and lack a mature green ecosystem.

Keywords

Business Performance; Competitive Advantage; Green Innovation; Innovation Capability; Property Industry

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DOI: https://doi.org/10.32535/ijabim.v11i2.4664