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The aim of this paper is to examine relationships among organizational learning, imitating capability, innovation and competitiveness advantage in the small and medium enterprise (SME). Furthermore, the paper also examines the mediation effect of innovation in the relationship between organizational learning and imitating capability to competitiveness advantage. Using empirical data drawn from 200 SMEs managers in Indonesia, the data were analyzed using partial least squares variance-based structural equation modeling (PLS-SEM). Results indicate that that organizational learning and imitating capability were an important determinant of organizational innovation and competitive advantage. Innovation had a positive relationship with competitiveness and has a mediating role in the relationship between organizational learning and imitating capability to competitiveness advantage. The implication of this study is that SMEs can increase their competitiveness through learning and imitating strategies that are applied simultaneously. This research is original in that it deliberately focuses on learning and imitating capability in low-technology SMEs, especially in the Indonesian context. Through learning, imitating capability, and innovation, SMEs in Indonesia can maintain a competitive position in the ASEAN free market.
Efendi et al. (Wed,) studied this question.