Sriwidadi TEGUH, Prabowo HARTIWI, Bramulya Ikhsan RIDHO, Simamora H. BACHTIAR, Atas Sari SYNTHIA, Hazlina Ahmad NOOR / Journal of Asian Finance, Economics and Business Vol 8 No 5 (2021) 0127–0134 127 127 Print ISSN: 2288-4637 / Online ISSN 2288-4645 doi:10.13106/jafeb.2021.vol8.no5.0127 Innovation Capability and Sustainable Competitive Advantage: An Entrepreneurial Marketing Perspective Sriwidadi TEGUH 1 , Prabowo HARTIWI 2 , Bramulya Ikhsan RIDHO 3 , Simamora H. BACHTIAR 4 , Atas Sari SYNTHIA 5 , Hazlina Ahmad NOOR 6 Received: January 15, 2021 Revised: March 21, 2021 Accepted: April 01, 2021 Abstract This study aims to determine the role of innovative capabilities as a mediator in analyzing entrepreneurial marketing’s effect on sustainable competitive advantage in food and beverage micro-, small-, and medium- enterprises (MSMEs). Data was obtained from a food and beverage store manager in Tangerang City, comprising 119 samples. Furthermore, the G*Power, a tool used to calculate statistical power analysis for various t-tests, F tests, χ 2 tests, z tests, and several exact tests, was used to determine the number of research samples, the α error probability of 5%, and 3 variables. The data collection method used questionnaires with Likert Scale 1–5 to indicate strongly disagree to strongly agree. To analyze data, we used Path Analysis supported by SmartPLS statistics software. Path analysis is a form of multiple regression statistical analysis that is used to evaluate causal models by examining the relationships between a dependent variable and two or more independent variables. It aims to provide estimates of the magnitude and significance of hypothesized causal connections between sets of variables. The data processing process took place in two stages, namely the estimation model testing with validity and reliability, and the structural model testing to decide the impact or correlation between variables utilizing the t-test. The result showed a positive and significant effect of entrepreneurial marketing to innovative capability and competitive advantage through the innovative capability of MSMEs. Keywords: Entrepreneurial Marketing, Innovative Capability, Sustainable Competitive Advantage, MSMEs, Path Analysis JEL Classification Code: D22, F18, F63, L26, O35 to their contribution to production, exports, and employment. In the Asian region specifically, statistics show that MSMEs account for 96% of total enterprises, employ 62% of the labor workforce, and contribute an average of 42% of gross domestic. Therefore, it is vital for Asian economies’ economic success that they have fully functioning support measures for MSMEs (Yoshino & Taghizadeh-Hesary, 2018). However, MSMEs face major challenges in accessing cheap finance, mainly because of the asymmetric information problem between suppliers and demanders of funds and the high transaction costs. These lead to more collateral requirements for lending to SMEs with higher lending interest rates, which hinder their growth. Ratnawati (2020) showed that financial inclusion influences MSMEs’ performance both directly and indirectly through mediation from financial intermediation and access to capital. The direct influence means that the efforts to increase access to financial services, especially access to credit financing for MSMEs, will be able to increase market share, the number of workers, sales, as well as the profit of the MSMEs. Increased financial inclusion has a major impact on improving MSMEs’ performance through 1 First Author and Corresponding Author. Management Department, BINUS Online Learning, Bina Nusantara University, Indonesia [Postal Address: Jl. K H. Syahdan No. 9 Kemanggisan – Palmerah Jakarta Barat, 11480, Indonesia] Email: tsriwidadi@binus.edu 2 Management Department, BINUS Online Learning, Bina Nusantara University, Jakarta, Indonesia. Email: hartiwi@binus.edu 3 Management Department, BINUS Online Learning, Bina Nusantara University, Jakarta, Indonesia. Email: ridho.ikhsan@binus.edu 4 BINUS Business School Undergraduate, Binus University, Jakarta, Indonesia. Email: bsimamora@binus.edu 5 BINUS Business School Undergraduate, Binus University, Jakarta, Indonesia. Email: Synthia@binus.edu 6 School of Management, University Sains Malaysia, Malaysia. Email: Hazlina@usm.my © Copyright: The Author(s) This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited. 1. Introduction Micro-, Small-, and Medium- Enterprises (MSMEs) play a significant role in the economic growth of the country owing