Dynamic capabilities and competitiveness: Relationship among industrial policy, structural transformation, and economic growth in Indonesian regional industries

Arief Rachadiono Wismansyah; Abdul Rahman Kadir; Sumbangan Baja; Muhammad Yunus Amar

doi:10.24294/jipd.v8i5.3773

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Dynamic capabilities and competitiveness: Relationship among industrial policy, structural transformation, and economic growth in Indonesian regional industries

Arief Rachadiono Wismansyah

Abdul Rahman Kadir

Sumbangan Baja

Muhammad Yunus Amar

Journal of Infrastructure Policy and Development 2024, 8(5), 3773; https://doi.org/10.24294/jipd.v8i5.3773

Submitted：20 Dec 2023

Accepted：08 Jan 2024

Published：09 May 2024

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Abstract

The complex interactions of industrial Policy, structural transformation, economic growth, and competitive strategy within regional industries are examined in this research. Using a dynamic capabilities framework, the study examines the mediating roles of organizational innovation and adaptability in the link between competitiveness and macroeconomic variables. A two-way fixed effects model is used in this study to examine the influence of structural transformation (ST) on Industrial Policy (IP). Using regional data covering the years 2010 to 2022, the research undertaken in this paper explores the dynamics of the Indonesian economy by empirically assessing the consequences of structural change on industrial Policy. In order to establish a comprehensive model that clarifies the mechanisms through which industrial policies and structural shifts impact the development of dynamic capabilities, ultimately influencing competitiveness strategies, this research draws on a large amount of empirical data and integrates insights from seminal works. Our research adds to our knowledge of strategic management in regional industries by providing detailed information on how economic development and policy interventions influence businesses’ ability to adapt and gain a competitive edge. In addition to advancing scholarly discourse, this study offers business executives and politicians valuable insights for managing the intricacies of global economic processes.

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