Examining the Impact of Knowledge Sharing on Sustainable Competitive Advantage: The Mediating Role of Innovation Culture and Social Capital

Abstract

This study analyzes the role of knowledge sharing in shaping sustainable competitive advantage, with innovation culture and social capital serving as mediating mechanisms, within Bank Perkreditan Rakyat Badan Kredit Kecamatan (BPR BKK) in Central Java. Employing an explanatory quantitative design, primary data were collected from executive managers of 34 BPR BKK institutions using a census approach. The proposed model was tested using Partial Least Squares–Structural Equation Modeling (PLS-SEM) to evaluate both direct and indirect effects among the variables. The results demonstrate that knowledge sharing does not exert a significant direct influence on sustainable competitive advantage. However, it significantly enhances innovation culture and social capital, which subsequently have a positive and significant impact on sustainable competitive advantage. These findings indicate that the strategic benefits of knowledge sharing are realized through organizational culture and relational assets rather than direct performance effects. Furthermore, innovation culture and social capital are confirmed as full mediators in the relationship between knowledge sharing and sustainable competitive advantage. This research advances the strategic management and banking literature by integrating knowledge-based and social capital perspectives and offers managerial implications for microfinance institutions to foster innovation-oriented environments and strong internal networks in order to achieve sustained competitiveness.