Leveraging Pro-Growth Interaction Capability to Improve Firm Performance: The Impact of Dynamic Markets

Diana Aqmala, Roymon Panjaitan and Febrianur Ibnu Fitroh Sukono Putra

Economic Studies journal, 2025, issue 7, 98-115

Abstract: This study examines the influence of entrepreneurial orientation (EO) on firm performance (FP), with a particular focus on the mediating role of pro-growth interaction capability (PGC). Data were obtained through a purposeful sample method from 324 SMEs across several sectors in Indonesia. The data were examined utilising Structural Equation Modelling-Partial Least Squares (SEM-PLS). The results showed that PGC significantly mediates the relationship between EO and FP by enhancing firms' adaptability and innovation capabilities. However, dynamic market conditions did not effectively moderate this relationship. This research adds to the existing literature by introducing PGC as a novel construct that strengthens the impact of EO on performance, offering new insights into optimising EO for resource-constrained SMEs. Managers are encouraged to enhance PGC through strategic collaborations and continuous learning to maximise the benefits of EO, particularly in competitive and dynamic markets.

JEL-codes: L26 M21 M31 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bas:econst:y:2025:i:7:p:98-115

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