THE ROLE OF COMPETITIVE ADVANTAGE MEDIATES THE EFFECT OF INNOVATION ON BUSINESS PERFORMANCE

ABSTRACT: The purpose of this study was to explain the role of the variable competitive advantage inmediating the influence of innovation on business performance at MSME Songket in Jembrana Regency. Thisresearch was conducted at UMKM Songket, located in Jembrana Regency. The sample size in this study was 36UMKM songket with purposive sampling method and data collection using a questionnaire. Data analysis usingPLS-based SEM analysis technique. The results showed that 1) innovation has a positive and significant effecton business performance, 2) innovation has a positive and significant effect on competitive advantage, 3)competitive advantage has a positive and significant effect on business performance, 4) competitive advantagesignificantly mediates the effect of innovation on business performance. the performance of songket UMKM inJembrana Regency.

Keywords: innovation, competitive advantage, business performance