Entrepreneurial Orientation, Innovation and SME Performance: A Study of SMEs in Malaysia using PLS-SEM

Nurulhasanah Abdul Rahman ()
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Nurulhasanah Abdul Rahman: School of Management, Universiti Sains Malaysia, 11800 Penang, Malaysia Author-2-Name: Daisy Mui Hung Kee Author-2-Workplace-Name: School of Distance Education, Universiti Sains Malaysia, 11800 Penang, Malaysia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:

GATR Journals from Global Academy of Training and Research (GATR) Enterprise

Abstract: Objective - Despite extensive research on Entrepreneurial Orientation (EO) and innovation and performance, there are still limited resources on how these areas benefit Small and Medium Enterprises (SMEs). There are various financial aids and support services that are provided to SMEs. Despite this, SMEs still tend to perform quite low. This paper aims to identify the link between EO and SME performance using innovation as a mediator. Methodology/Technique - To achieve this objective, a quantitative approach is used. Questionnaires are collected from 285 SMEs in Peninsular Malaysia. Structural Equation Modelling (SEM) analysis is applied to test the hypotheses on the direct and indirect relationships between EO and SME performance through innovation. Finding - The findings of this study show that only two aspects of EO (innovativeness and proactiveness) have significant relationships with SME performance. Interestingly, all dimensions of EO have a direct impact on innovation. Further, innovation has a direct effect on SME performance and is a significant mediator between EO and SME performance. Novelty - These findings indicate that EO is a strong predictor of Innovation and SME performance. The discussion provided in this paper strengthens the body of knowledge on Entrepreneurship and acts as a benchmark for future studies on EO, Innovation and SME Performance. Type of Paper - Empirical.

Keywords: Malaysia; Entrepreneurial Orientation; Innovation; SME Performance. (search for similar items in EconPapers)
JEL-codes: L25 M13 M19 (search for similar items in EconPapers)
Pages: 8
Date: 2020-06-03
New Economics Papers: this item is included in nep-cse, nep-sbm and nep-sea
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Published in Global Journal of Business and Social Science Review, Volume 8, Issue 2.

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