STRENGTHENING MSME BUSINESS CONTINUITY IN FLOOD-PRONE AREAS THROUGH DISASTER PREPAREDNESS AND RESILIENCE

Abstract

Floods are increasingly frequent and destructive, posing significant threats to the sustainability of micro, small, and medium enterprises (MSMEs), particularly in flood-prone regions. This study aims to analyze the determinants of MSME business continuity in the context of flood risk by examining the roles of disaster preparedness and organizational resilience. A conceptual model is developed to explain how disaster preparedness influences business continuity both directly and indirectly through resilience. The study employs a quantitative approach using Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze survey data collected from 386 MSMEs in Brebes Regency, Indonesia. The findings reveal that disaster preparedness has a negative direct effect on MSME business continuity, indicating that the implementation of preparedness measures may temporarily disrupt business operations due to limited financial and operational resources. However, disaster preparedness significantly enhances organizational resilience, which in turn positively influences MSME business continuity. These results highlight the critical mediating role of resilience in enabling small businesses to maintain operational sustainability under disaster risk. The study contributes to the literature on disaster management and small business resilience by providing empirical evidence from MSMEs operating in flood-prone areas. The findings also offer practical insights for policymakers and stakeholders in designing programs aimed at strengthening disaster preparedness and resilience to support the long-term sustainability of MSMEs.