Navigating success: Exploring how entrepreneurial traits and institutional factors mediate enterprise characteristics and financial performance

Sheevun Di O. Guliman-Qudsi, Berlyn M. Teaño and Michael Lloyd A. Bation

Journal of the International Council for Small Business, 2025, vol. 6, issue 2, 311-330

Abstract: This study examined the dynamics between enterprise characteristics (EC) and the financial performance (FP) of 623 micro-enterprises in five highly urbanized cities across Mindanao, Philippines. Using partial least squares structural equation modeling, it also examines the mediating effects of entrepreneurial traits and perceived institutional factors after controlling for business age. The results revealed that EC significantly and positively influences FP. This suggests that micro-enterprises benefit from their enabling characteristics, such as business model, employees, and organizational culture. Entrepreneurial traits, including business acumen, grit, and environmental and social orientation, partially mediate the EC–FP relationship. Perceived institutional factors, including culture, norms, and enabling trading climate, played significant roles as partial mediators between EC and FP. Policy makers can use these insights to design programs that foster supportive institutional environments. Meanwhile, entrepreneurs should optimize key traits, leverage their enterprise-specific strengths, and adapt their business models to local culture and norms to enhance financial performance.

Date: 2025
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DOI: 10.1080/26437015.2024.2403150

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