The Impact of Export Capabilities and Competitive Advantage on SME’s International Performance

. Small and medium businesses (SMEs) have a significant impact on the Indonesian economy, both in terms of GDP and jobs. This research aims to examine the impact of export capabilities and competitive advantage to SMEs’ international performance. Background Problems: There is still an inconsistency among previous research on capabilities-competitive advantage-performance relations. Objective: This study would determine which capabilities have the greatest influence on a SME's international success, as well as whether competitive advantage plays a role in mediating the relationship between capabilities and performance. Research Methods: This research uses the quantitative method with 55 respondents from all over Indonesia, and then the analysis uses PLS-SEM with SmartPLS software. Findings/Results: The product innovation does not influence the competitive advantage. Market intelligence, marketing communication, and pricing influence the competitive advantage. Also, the competitive advantage influences international performance but does not have the mediate role between the export capabilities and international performance. Conclusion: Between export capabilities: market communication, pricing, and market intelligence are the most impactful to SMEs’ international performance. SMEs leaders should focus on the resources on those capabilities, while government and academic researchers still support on product innovation.