The role of knowledge management in MSMEs business performance

Abstract

This research purpose is to examine the effect of knowledge management on MSMEs business performance and how these relationships are mediated by business innovation. The population in this study was the owner of MSMEs in the city of Semarang. Data collection methods were observation, questionnaires, and interviews. Purposive sampling was used in this study, in addition, 100 respondents collected as a sample. Structural Equation Modeling (SEM) through the Warp PLS program was used to test the hypothesis. The results of the study revealed that knowledge management is influencing business innovation. Business innovation also affects business performance. In this study, knowledge management has no direct influence on business performance, however, knowledge management affects business performance through business innovation as a mediation. This study provides an overview of the importance of knowledge management to be applied in large or small and medium enterprises. This research provides an understanding of the mechanism of the role of knowledge management in MSMEs.