The Small Firm Performance and Entrepreneurial Competence Revealed Through Competitiveness Framework: A Case Study of MSMEs in Indonesia

Abstract

The number of MSMEs is very influential in economic growth, especially in developing countries. What is of concern to developing countries, although the number of MSMEs is increasing every year, they cannot develop in an increasingly competitive business environment. In this case, good business performance is needed to survive in this intense competition. This study tries to make a performance model of small-scale enterprises by finding out the effect of entrepreneurial competency variables and moderated by the variable competitive sphere and capability of organization. We use the partial least squares to confirm the theory and get answers about the influence between variables. Respondents of this study were 100 MSME owners in Bandung, Indonesia. The study's findings revealed that entrepreneurial competence had a significant influence both directly and indirectly on small firm performance. The variable of entrepreneurial competence provides the most powerful influence on the competitive sphere than organizational capability's moderating variable. Although the moderating variable of organizational capability is not as strong as the competitive sphere in influencing firm performance, it has a strong predictor (quality and flexibility).

Citation

Sari, P.A. and Sari, W.P. (2022), "The Small Firm Performance and Entrepreneurial Competence Revealed Through Competitiveness Framework: A Case Study of MSMEs in Indonesia", Sergi, B.S. and Sulistiawan, D. (Ed.) Modeling Economic Growth in Contemporary Indonesia (Entrepreneurship and Global Economic Growth), Emerald Publishing Limited, Leeds, pp. 1-24. https://doi.org/10.1108/978-1-80262-431-120221001