Abstract
This study aims to examine the dynamic capability model and its implications for innovation performance in the context of competitive advantage. The research design used is causal quantitative research using survey methods. Respondents were 106 managers of village unit cooperatives in the Kediri and Madiun areas, East Java, Indonesia. The measurement variable uses seven Linkert scales. Partial Least Square (PLS) is used to test the causal relationship between constructs. Based on the results of the analysis, it shows that dynamic capabilities and adaptive creative capabilities do not have a positive effect on innovation performance, dynamic capabilities and adaptive creative capabilities have a positive effect on competitive advantage. Competitive advantage has a positive effect on innovation performance. Finally, the results provide support for the model of dynamic capabilities, adaptive creative capabilities, and the implications of innovation performance in the context of competitive advantage, therefore village unit cooperatives must increase the elements of competitive advantage by increasing dynamic capabilities and adaptive creative capabilities to managers.
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