The Influence of Knowledge about ASEAN Economic Community on Performance of Indonesian Batik SMEs: Mediating Attitude and Readiness
This research aims to determine the impact of small and medium-sized enterprises’ (SMEs) level of the Association of the South East Asian Nations (ASEAN) Economic Community (AEC) knowledge on attitudes, readiness, and performance. Quantitative methods are used based on a questionnaire for collecting data from 150 SMEs in Central Java, Indonesia. AEC’s implementation only has a small impact on improving SME performance. The results show that SMEs have adequate knowledge, attitude, and readiness about AEC. The structural modeling findings reveal that the knowledge factor has an indirect effect on SMEs’ performance. Both the roles of attitude and readiness are needed to mediate the effect of knowledge on SMEs’ performance. Although ASEAN’s economic cooperation has been applicable since January 2016, SMEs are still not equipped with sufficient knowledge to handle a competitive business environment. Therefore, the government must implement effective mechanisms and regulations to benefit the business operations of SMEs and provide support training to improve knowledge, attitudes, and readiness in dealing with AEC.