Firm Age as A Strategic Contingency: Strengthening the Effects of Innovation and Branding Capabilities on Competitive Advantage and Performance

Abstract

Purpose – This study examines whether firm age conditions relationships among innovation capability, branding capability, competitive advantage, and business performance. Design/methodology/approach – Survey data from 306 owners and managers of medium-sized batik enterprises in Madura, Indonesia, were analysed using PLS-SEM. Findings – Innovation capability strengthened branding capability, competitive advantage, and performance; branding capability strengthened competitive advantage but not performance directly; competitive advantage improved performance. Firm age positively moderated the four tested capability–outcome relationships. Research limitations/implications – The single-industry, single-region design limits generalisability. Practical implications – Managers should align innovation and branding investments with organisational maturity. Social implications – Capability development may support the sustainability of culturally embedded batik enterprises. Originality/value – The study positions firm age as a strategic contingency explaining when internal capabilities translate into competitive outcomes.