EFFECTS OF SOCIAL NETWORKING AND KNOWLEDGE ABSORPTION ON MICRO ENTERPRISE PERFORMANCE OF “BATIK”

Abstract

Batik "Gajah Oling" is a form of mixing of “Using” people culture and business values in Banyuwangi Regency, East Java Province, Indonesia. The disappearance of batik "Gajah Oling" will make one of belief also disappear, therefore it needs to be preserved. In this study, we attempt to understand and explain the influence of social networks the knowledge absorption, entrepreneurial orientation, product innovation, and competitive advantage to the business performance of micro batik "Gajah Oling" as well as the direct influence of each variable on performance. The research location is in Banyuwangi. The study population is 154 craftsmen. The sampling technique used simple random sampling method. Determination of the number of respondents used Slovin formula, the result is 111 respondents. Data collection instrument put the questionnaire. Data analysis used structural equation modeling with software SmartPLS 3. The findings show i) the performance of micro-enterprises of batik "Gajah Oling" was directly affected by the competitive advantage, entrepreneurial orientation, and knowledge absorption, ii) the performance of micro-enterprises of batik "Gajah Oling" was affected not directly by the knowledge absorption through competitive advantage, entrepreneurial orientation and product innovation, iii) social network has an indirect effect on the performance of micro-enterprises of batik "Gajah Oling" through knowledge absorption.