What Drives International Competitiveness? An Empirical Test in Emerging Indonesian Market

Anotace: This study tried to identify factors which drive international sustainable competitive advantage using Indonesian listed-multinational companies. The study began with identifying the terminology for emerging market using a single index model. We then deployed the three measurements for competitive advantage which are return on sales, return on asset and return on equity. Our results showed that all three measurements have the power to explain each competitive factor for Indonesian multinational firm, but statistically, ROA showed as the best proxies. Moreover, eight out of ten hypotheses tested were strongly supported by the data. The study strongly emphasized the importance of knowledge management, local leadership and a factor of location as vital drivers for global competitive advantage. Lastly, the study also stressed the importance of globalizing subsidiaries in order to gain sustainable competitive advantage for the host country.