The co-operative plays an important role in Indonesia’s economic development since it can improve people’s welfare and support SMEs through its unique character, which is a combination of the economic and social character. As an enterprise, co-operative is not immune to
environmental changes. Therefore co-operative must be able to compete with other industries to reach the best performance in globalization era. The capability to cope with environmental pressure is known as dynamic capability. Research on the implementation of dynamic capabilities, however,
only focus on conceptual discussions and empirical studies are still limited, especially in co-operatives. This research is proposed to fill the gap by conducting the empirical research, in order to examine the effect of dynamic capabilities for the formation of competitive advantage to achieve
co-operatives’ performance in terms of economic and social performances. The result shows that dynamic capability could be implemented in Indonesian credit co-operatives to establish a competitive advantage and ultimately be used to achieve a better firm’s performances. However,
dynamic capability cannot be used directly to achieve a better performance. The firms must choose the right and superior capability to compete with their competitors.
Pollution and economic development: an empirical research review
