As Thailand advances regional economic revitalization through the Southern Thailand Special Economic Corridor (SSEC), small and medium-sized enterprises (SMEs) have become pivotal to sustainable economic transformation. However, limited empirical evidence explains how environmental pressures are translated into sustained firm-level performance within policy-driven regional economies. To address this gap, this study examines the structural relationships among the external environment, dynamic capabilities, business model innovation, and SMEs’ business success across four SSEC provinces. Drawing on Dynamic Capabilities Theory (DCT) and the Resource-Based View (RBV), the study proposes that external conditions stimulate internal adaptive capabilities, which subsequently enable firms to reconfigure business models and achieve durable business performance. Using stratified sampling, data were collected from 412 SMEs in the manufacturing, trade, and service sectors. The data were analyzed using covariance-based structural equation modeling. The results reveal that while the external environment does not exert a significant direct effect on business success, it influences performance indirectly through a sequential capability–innovation pathway, supporting an indirect-only mediation pattern. Dynamic capabilities significantly enhance both business model innovation and business success, whereas business model innovation emerges as the strongest direct predictor of performance. By identifying an indirect-only mediation mechanism, the study specifies the structural boundary condition under which environmental dynamism translates into sustainable firm performance within regional economic corridors. From a sustainability perspective, the findings further demonstrate that long-term regional resilience in emerging economic corridors depends not solely on macro-level policy initiatives but on SMEs’ capability to continuously reconfigure resources, renew business models, and adapt strategically under structural volatility. Accordingly, the study provides integrated theoretical and policy insights for capability-driven sustainability and innovation-oriented regional development.
Sutthirak et al. (Sat,) studied this question.