Linking entrepreneurial competencies, innovation and sustainable performance of manufacturing SMEs

What is it about?

The purpose of this study is twofold: to examine the impact of entrepreneurial competencies and innovation on manufacturing SMEs’ sustainable performance; and to explore the role of innovation as a mediator on the relationship between entrepreneurial competencies and manufacturing SMEs’ sustainable performance. The results of the PLS-SEM approach reveal that entrepreneurial competencies play a robust and noteworthy role in promoting innovation, and the sustainable performance of manufacturing SMEs, respectively. Further, innovation has a partially-mediated effect on the link between entrepreneurial competencies and manufacturing SMEs’ sustainable performance. Manufacturing SMEs’ aspirations to be the first to market with new products are reflected in their implementation of positive entrepreneurial competencies or capabilities which enable them to scan the environment to identify high-quality business opportunities and respond through their R&D activities to create products that provide real benefit to customers’ needs. Hence, they seize the market opportunities. By applying the resource-based view (RBV) theory and the triple bottom line (TBL) framework into a single framework, this study highlights the role of innovation as a meaningful mediator between entrepreneurial competencies and manufacturing SMEs’ sustainable performance. As exploration of this relationship has been very limited, the study makes a novel contribution to the extant literature.

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