Role of government policy in the relationship between charismatic leadership and entrepreneurship in the Kurdistan Region of Iraq SMEs

Abstract

Entrepreneurship drives economic growth by creating jobs, fostering innovation, and introducing new products and services to the market. It also empowers individuals to pursue their ideas, solve societal challenges, and contribute to overall economic and social development. Grounded in leadership and entrepreneurship theories, particularly Conger's Charismatic Leadership Theory and Path Goal Theory, this study explores the relationship between government policy, charismatic leadership, and entrepreneurship in the Kurdistan Region of Iraq. A quantitative research design was employed, collecting 390 responses from 1,190 SMEs. PLS (SEM) was used as an estimation method to attain the study's objectives. The findings show a significant positive relationship between Charismatic Leadership and Entrepreneurship. Moreover, there is a significant positive relationship between government policy and Entrepreneurship. However, government policy in the Kurdistan Region exhibits a significant moderating effect with negative implications, suggesting potential policy inefficiencies or regulatory constraints. This study contributes to the literature by offering empirical insights into the interplay between leadership, policy, and entrepreneurial activity in a developing economy. The findings hold important implications for policymakers seeking to enhance entrepreneurship through more effective regulations, investors aiming to expand SME portfolios, and business leaders reconsidering leadership styles to foster innovation and growth.