The mediating role of the innovation in the relationship between the competencies and organization performance: A case study

Abstract

The main purpose of the study was to examine the impact of the entrepreneurial competency on the performance of SME in the Indonesia. In addition to that mediating role of the innovation in the relationship between the entrepreneurial competency and the SME performance is also examined. The study has employed the survey-based methodology and the data is collected form the SMEs. The response rate of the study is 63.2 percent. The structural equation modeling which is one of the mist robust techniques is employed to examine the mediating and direct relationship between and among the variables. the results of the study highlights that the entrepreneurial competency, and innovation are the significant determinists of the SME performance. The entrepreneurial competency has also significant impact on the innovation. The innovation also appeared as a mediator in the relationship between the entrepreneurial competency and the SME performance. The study is among the very few studies on the issue and pioneer study on the sample Indonesia firms. The study will be helpful for policy makers and researchers in formulating the policy.