Operational resilience as a dynamic capability for achieving sustainable agribusiness MSMEs

Purpose. This study aims to identify and analyse the relationship between business performance and the sustainability of agribusiness micro, small, and medium enterprises (MSMEs) with operational resilience as a mediating variable. This study also seeks to explain how the dimensions of business performance, including financial performance, operational efficiency, market access, and innovation, can promote the achievement of economic, social, and environmental sustainability within the Triple Bottom Line (TBL) framework. Methodology. A quantitative approach was used through a survey of 300 agribusiness MSME actors in Central Java Province, Indonesia. Data analysis was performed using Structural Equation Modelling – Partial Least Squares (SEM-PLS) to test the model of direct and indirect relationships between variables. Validity and reliability tests were conducted to ensure data quality, while bootstrapping tests were used to confirm the significance of the mediation path. Results. The results show that business performance has a positive and significant effect on operational resilience (β = 0.297; p < 0.01) and MSME sustainability (β = 0.325; p < 0.01). It was found that operational resilience partially mediates the relationship between business performance and sustainability (VAF = 28.5%). Among the dimensions of business performance, market access and innovation exerted the most significant influence on enhancing both operational resilience and business sustainability. Originality. This study expands on the Resource-Based View (RBV) and Dynamic Capabilities theories by positioning operational resilience as a dynamic capability that bridges business performance and sustainability. The proposed conceptual model extends existing RBV and Dynamic Capabilities frameworks by explaining how internal performance-based resources are transformed into sustainable outcomes through operational resilience as a dynamic capability. Practical implications. The research findings offer valuable policy guidance for decision-makers aiming to enhance the resilience of MSMEs. Key strategies include improving access to financing, providing managerial training, facilitating market digitisation, and strengthening agribusiness cooperatives. Strengthening operational resilience has been shown to effectively accelerate progress toward achieving the Sustainable Development Goals (SDGs 8, 9, and 12) within Indonesia’s agribusiness sector.