Strengthening Sustainable Competitive Advantage Through Green Innovation and Social Capital: Evidence from Coastal Small and Medium Enterprises

Coastal small and medium enterprises (SMEs) in Indonesia operate in resource-constrained environments while facing increasing environmental pressures and sustainability demands. This study aims to examine the relationships among social capital, green innovation, and sustainable competitive advantage in coastal SMEs. A quantitative approach was employed, with data collected from 78 coastal SMEs using a structured questionnaire and analyzed through partial least squares structural equation modeling (PLS-SEM). The results indicate that social capital has a significant positive effect on sustainable competitive advantage (β = 0.597; p < 0.001) and green innovation (β = 0.530; p < 0.001). In addition, green innovation positively influences sustainable competitive advantage (β = 0.372; p = 0.001), highlighting its complementary role in strengthening firms’ competitive positions. These findings suggest that relational resources and eco-innovative practices jointly support long-term competitiveness in coastal business contexts. The study extends the Resource-Based View (RBV) by highlighting social capital as a strategic resource that supports green innovation, and it offers practical guidance for strengthening collaborative networks and green innovation initiatives to enhance sustainability and resilience in coastal regions