Abstract
Business model innovation (BMI) is receiving increased attention in the firm's practice and research. Business models have become essential for a firm to commercialize new ideas and technologies. However, the practice of business model innovation in SMEs still needs to be improved, whereas BMI can be beneficial for SMEs. The studies investigating dynamic capabilities as an exogenous variable for business model innovation still need to be completed. This study aims to see the influence of networking capability and learning capability as part of dynamics capability on business model innovation which further leads to firm performance. A quantitative study was conducted to see the relationship. A total of 234 respondents participated in this study, and the data were eligible for further analysis. SMART PLS version 3.3.3 was used to analyze the data. The result showed that networking and learning capability positively influenced business model innovation, and business model innovation positively influenced firm performance. This research validated the concept of dynamic capabilities relationship with business model innovation. This research reinforced the statement that the business model innovation construct is mediative. This research strengthens various studies on the positive influence of business model innovation on firm performance.
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