Entrepreneurial Competencies and Performance of Informal Micro-Enterprises in Malaysia

Abstract

Doi:10.5901/mjss.2016.v7n3p273 Abstract Literature on informal economic activities has identified the significant role of informal microenterprises in national development and the role of entrepreneurial competencies in microenterprise performance. This study, therefore, examined the role of entrepreneurial competencies, i.e., risktaking propensity, need for achievement, selfefficacy, and experience in informal microenterprise performance in Kelantan, Malaysia. This study used a crosssectional design and collected quantitative data from 197 informal microentrepreneurs. Findings of the path analysis using variancebased structural equation modeling (SEMPLS) revealed that informal microentrepreneurs' risktaking propensity and selfefficacy have a significant positive effect on microenterprise performance. Development programs and policies should, therefore, focus on increasing lowincome informal microentrepreneurs' selfefficacy and ability to take risks in order to take advantage of all the incomegenerating opportunities available to them, which would ultimately lead to the improvement of the socioeconomic condition of low income households in Malaysia.