Innovative Responses to Exogenous Shocks in Indonesian Transportation Firms: Mediating Role of Sustainable Performance and Outcomes Abdullah M. Al-Ansi 1* , Manar Hazaimeh 2 , Aseel Hendi 3 , Jebril AL-hrinat 4 , Ghadeer Adwan 5 , Askar Garad 6 1 Faculty of Education, Thamar University, Thamar 55855, Yemen 2 Department of Counseling and Educational Psychology, Yarmouk University, Irbid 566-21163, Jordan 3 Industrial Engineering Department, The Hashemite University, Zarqa 566-5235, Jordan 4 Faculty of Education, Arab American University, Hebron 12567, Palestine 5 Faculty of Education, Islamic University of Gaza, Gaza 20643, Palestine 6 Master Management Program, Universitas Muhammadiyah Yogyakarta 55183, Indonesia Corresponding Author Email: abdullahalansi@umy.ac.id https://doi.org/10.18280/ijsdp.180905 ABSTRACT Received: 8 May 2023 Revised: 13 July 2023 Accepted: 3 August 2023 Available online: 26 September 2023 Innovative responsiveness to exogenous shocks for sustainability is a proactive methodology for mitigating and adapting to unforeseen events and challenges that could jeopardize the sustainability of ecosystems or organizations. This research aims to examine three innovative strategies—minimizing impact, shifting approaches, and short-long term planning—for responding to exogenous shocks in two Indonesian private sector transportation firms, Gojek and Grab, and the influence of this response on sustainable development. In addition, sustainable performance and outcomes are employed as mediators between the innovative response and sustainable development. A total of 385 drivers from Gojek and Grab in Yogyakarta, Indonesia, were enlisted to answer questionnaires. The survey was distributed online via social media applications, and the collected data was analyzed using SEM-PLS 4. The findings indicate that the innovative response strategies to exogenous shocks—including minimizing impact, shifting to new approaches, and short- and long-term planning—were effective and contributed to the sustainable development of both companies. The results also suggest that minimizing impact has a negative but insignificant impact on sustainable outcomes, whereas both sustainable performance and outcome positively enhance the sustainable development of both firms. These research findings contribute to the literature by addressing a gap related to sustainability during crises in the Indonesian context. They also have practical implications by raising awareness of innovative, technology-based solutions. Keywords: innovative response, exogenous shock, sustainable development, sustainable performance, sustainable outcomes, transportation firms, Indonesia 1. INTRODUCTION Sustainable development is garnering increased attention from academics, industries, investors, policy makers, and economic and political decision makers. In this research, sustainable development is viewed through the lens of sustainable performance and sustainable outcomes. Sustainable development pertains to the practice of promoting economic, social, and environmental progress that satisfies current needs without endangering the capability of future generations to meet their needs [1]. The goal of sustainable development is to underscore a balanced and comprehensive approach towards growth, prioritizing resource efficiency and conservation, biodiversity protection, and social equity [2]. On the other hand, innovative response to exogenous shocks refers to the capacity of companies and organizations to adapt and weather unexpected external events [3]. These shocks can manifest as a natural disaster, economic crisis, political instability, or even swift technological change [4]. A successful innovative response necessitates flexibility, creativity, and forward-thinking strategies, allowing businesses to promptly modify their operations, product offerings, and resource allocation as required. Responsiveness strategies and techniques to external shocks during a crisis are vital for maintaining sustainability and outcomes. For instance, during the COVID-19 pandemic, many small businesses in Indonesia shuttered, while many others struggled and suffered considerable losses [5]. Gojek and Grab, the largest transportation firms in Indonesia specializing in transport, logistics, and online goods and food delivery, have more than two million drivers each [6]. According to the latest reports, the average number of trips per minute is 3860, with an average of 100 million transactions monthly [7]. Grab Indonesia is part of the international Grab business, while Gojek is a purely Indonesian private sector business headquartered in Jakarta. Gojek also operates in Singapore with 30 million transactions, representing 20% of the company's full operation [8]. These two companies exemplify a successful response to the COVID-19 crisis, sustaining their performance and development during and after the pandemic. A number of scholars have highlighted the importance of innovation and creativity in transforming businesses, especially during crises [9-11]. The innovative response of International Journal of Sustainable Development and Planning Vol. 18, No. 9, September, 2023, pp. 2663-2672 Journal homepage: http://iieta.org/journals/ijsdp 2663