NETWORK COMPETENCE AND FIRM PERFORMANCE: THE MEDIATING ROLE OF ENTREPRENEURIAL INNOVATIVENESS AMONG MALAYSIAN CHINESE ENTREPRENEURS OF WHOLESALE BUSINESSES
Main Article Content
Abstract
Entrepreneurial innovativeness has been considered as one of the crucial factors for any firm to achieve its superior performances. The aim of this paper is to analyse the mediating effect of entrepreneurial innovativeness in the relationship between network competence and firm performances including financial performance, non-financial performance, and business growth. Data were collected from 150 Malaysian Chinese wholesalers from the states of Selangor and Kuala Lumpur. Non-probability sampling technique was used to get the target respondents. PLS-SEM technique was used to analyse the data. The results revealed positive as well as significant mediating influence of entrepreneurial innovativeness in the relationship between network competence and firm performances. This study also provides future recommendations and managerial implications.
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Ahmad, N.H. (2007). A cross cultural study of entrepreneurial competencies and entrepreneurial success in SMEs in Australia and Malaysia. PhD dissertation, University of Adelaide, South Australia.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
Brinckmann, J. (2008). Competence of top management teams and success of new technology-based firms: A theoretical and empirical analysis concerning competencies of entrepreneurial teams and the development of their ventures. Wiesbaden: Gabler Publishing.
Cavusgil, S., Calantone, R.J., & Zhao, Y. (2003). Tacit knowledge transfer and firm innovation capability. Journal of Business & Industrial Marketing, 18(1), 6–21. https://doi.org/10.1108/08858620310458615
Chin, T.A., Hamid, A.B.A., Rasli, A., & Tat, H.H. (2014). A literature analysis on the relationship between external integration, environmental uncertainty and firm performance in Malaysian SMEs. Procedia-Social and Behavioral Sciences, 130(May), 75–84. https://doi.org/10.1016/j.sbspro.2014.04.010
Cohen, J. (1988). Statistical power analysis for the behavioural sciences. Hillside, NJ: Lawrence Earlbaum Associates. https://doi.org/10.1002/bs.3830330104
Cohen, W.M., & Levinthal, D.A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128–152. https://doi.org/10.2307/2393553
Farooq, W., & Abideen, Z.U. (2015). SMEs’ preparedness to face economic crisis: A proposed framework for Malaysian SMEs. East West Journal of Business and Social Studies, 4(2), 66–79.
Faul, F., Erdfelder, E., Lang, A.G., & Buchner, A. (2007). G* Power 3: A flexible statistical power analysis program for the social, behavioral and biomedical sciences. Behavior Research Methods, 39(2), 175–191. https://doi.org/10.3758/BF03193146
Grant, R. (1991). The resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review, 33(2), 114–135. https://doi.org/10.2307/41166664
Gunday, G., Ulusoy, G., Kilic, K., & Alpkan, L. (2011). Effects of innovation types on firm performance. International Journal of Production Economics, 133(2), 662–676. https://doi.org/10.1016/j.ijpe.2011.05.014
Hair, J.F., Hult, G.T.M., Ringle, C.M., & Sarstedt, M. (2014). A primer on partial least squares structural equation modeling (PLS-SEM). Thousand Oaks, CA: Sage.
Hair, J.F., Hult, G.T.M., Ringle, C.M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Thousand Oaks, CA: Sage.
Hair, J.F., Sarstedt, M., Ringle, C.M., & Gudergan, S.P., (2018). Advanced issues in partial least squares structural equation modeling (3rd ed.). Thousand Oaks, CA: Sage.
Halim, H.A., Ahmad, N.H., Ramayah, T., & Hanifah, H. (2014). The growth of innovative performance among SMEs: Leveraging on organisational culture and innovative human capital. Journal of Small Business and Entrepreneurship Development, 2(1), 107–125.
Halim, H.A., Ahmad, N.H., Ramayah, T., Hanifah, H., Taghizadeh, S.K., & Mohamad, M.N. (2015). Towards an innovation culture: Enhancing innovative performance of Malaysian SMEs. Academic Journal of Interdisciplinary Studies, 4(2), 85–94. https://doi.org/10.5901/ajis.2015.v4n2p85
Hassan, T.M.R.T., Yaacob, M.R., & Abdullatiff, N.K. (2014). Sustaining SMEs woodbased product manufacturing through best practices: The case of indigenous entrepreneurs in Kelantan. Procedia-Social and Behavioral Sciences, 115(February), 221–234. https://doi.org/10.1016/j.sbspro.2014.02.430
Headd, B. (2003). Redefining business success: Distinguishing between closure and failure. Small Business Economics, 21(1), 51–61. https://doi.org/10.1023/A:1024433630958
Henseler, J., Ringle, C.M. & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance based structural equation modelling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
Henseler, J., Ringle, C.M. & Sinkovics, R.R. (2009). The use of partial least squares path modelling in international marketing. Advances in International Marketing, 20(1), 277–319.
Hilmi, M.F., Ramayah, T., Mustapha, Y., & Pawanchik, S. (2010). Product and process innovativeness: Evidence from Malaysian SMEs. European Journal of Social Sciences, 16(4), 556–565.
Hooi, L.W., & Ngui, K.S. (2014). Enhancing organizational performance of Malaysian SMEs. International Journal of Manpower, 35(7), 973–995. https://doi.org/10.1108/IJM-04-2012-0059
Jamil, A., Omar, R., & Panatik, S.A. (2014). Entrepreneurial passion, achievement motivation goals and behavioural engagements in Malaysia: Are there any differences across ethnic groups? Asian Social Science, 10(17), 17–28. https://doi.org/10.5539/ass.v10n17p17
Kheng, L.K., & Minai, M.S. (2016). The network characteristic of Chinese SMEs in Malaysia and their performance. In N. Mohd Sidek, S. Ali, & M. Ismail (Eds.), Proceedings of the ASEAN Entrepreneurship Conference 2014 (pp. 39–47). Singapore: Springer. https://doi.org/10.1007/978-981-10-0036-2_4
Korsakiene, R. & Diskiene, D. (2015). Do competencies of entrepreneurs and managers influence internationalization processes? Investigation of Lithuanian SMEs. In Proceedings of the 10th European Conference on Innovation and Entrepreneurship ECIE 2015, The University of Genoa, Italy, 17–18 September 2015.
Lawson, B., & Samson, D. (2001). Developing innovation capability in organisations: A dynamic capabilities approach. International Journal of Innovation Management, 5(3), 377–400. https://doi.org/10.1142/S1363919601000427
Lee, C.S., & Wong, K.Y. (2015). Knowledge management performance measurement in micro-, small- and medium-sized enterprises: An exploratory study. Business Information Review, 32(4), 204–211. https://doi.org/10.1177/0266382115615262
Miller, D. (2015). A downside to the entrepreneurial personality? Entrepreneurship Theory and Practice, 39(1), 1–8. https://doi.org/10.1111/etap.12130
Ng, P.Y., & Hamilton, R.T. (2015). Capabilities, strategy, and performance: The case of ICT firms in New Zealand. Journal of Asia-Pacific Business, 16(4), 302–327. https://doi.org/10.1080/10599231.2015.1091710
Olughor, R.J. (2015). Effect of innovation on the performance of SMEs organizations in Nigeria. Management, 5(3), 90–95.
Penrose, E. (1959). The theory of the growth of the firm. Oxford: Blackwell.
Peteraf, M.A. (1993). The cornerstones of competitive advantage: A resource?based view. Strategic Management Journal, 14(3), 179–191. https://doi.org/10.1002/smj.4250140303
Ritter, T. (1999). The networking company: Antecedents for coping with relationships and networks effectively. Industrial Marketing Management, 28(5), 467–479. https://doi.org/10.1016/S0019-8501(99)00075-9
Ritter, T., Wilkinson, I.F., & Johnston, W.J. (2002). Measuring network competence: Some international evidence. Journal of Business & Industrial Marketing, 17(2/3), 119–138. https://doi.org/10.1108/08858620210419763
Rodríguez, A., & Nieto, M.J. (2016). Does R&D offshoring lead to SME growth? Different governance modes and the mediating role of innovation. Strategic Management Journal, 37(8), 1734–1753. https://doi.org/10.1002/smj.2413
Romijn, H., & Albaladejo, M. (2002). Determinants of innovation capability in small electronics and software firms in southeast England. Research Policy, 31(7), 1053–1067. https://doi.org/10.1016/S0048-7333(01)00176-7
Salim, I.M., & Sulaiman, M. (2011). Organizational learning, innovation and performance: A study of Malaysian small and medium sized enterprises. International Journal of Business and Management, 6(12), 118–125. https://doi.org/10.5539/ijbm.v6n12p118
Salisu, Y., & Bakar, L.J.A. (2018). Strategic alliance and the performance of SMEs in developing economies: The mediating role of innovation strategy. Asian Journal of Multidisciplinary Studies, 6(2), 47–56.
Saunila, M., & Ukko, J. (2014). Intangible aspects of innovation capability in SMEs: Impacts of size and industry. Journal of Engineering and Technology Management, 33, 32–46. https://doi.org/10.1016/j.jengtecman.2014.02.002
Smolarski, J., & Kut, C. (2011). The impact of venture capital financing method on SME performance and internationalization. International Entrepreneurship and Management Journal, 7(1), 39–55. https://doi.org/10.1007/s11365-009-0128-1
Swink, M. (2006). Building collaborative innovation capability. Research-Technology Management, 49(2), 37–47. https://doi.org/10.1080/08956308.2006.11657367
Tipu, S.A.A. (2016). Comparing the behaviour of opportunity and necessity driven entrepreneurs. International Journal of Entrepreneurship and Small Business, 27(1), 84–107. https://doi.org/10.1504/IJESB.2016.073359
Wernerfelt, B. (1984). A resource?based view of the firm. Strategic Management Journal, 5(2), 171–180. https://doi.org/10.1002/smj.4250050207
Yasin, G., Nawab, S., Bhatti, K.K., & Nazir, T. (2014). Relationship of intellectual stimulation, innovations and SMEs performance: Transformational leadership a source of competitive advantage in SMEs. Middle-East Journal of Scientific Research, 19(1), 74–81.
Zeng, S.X., Xie, X.M., & Tam, C.M. (2010). Relationship between cooperation networks and innovation performance of SMEs. Technovation, 30(3), 181–194. https://doi.org/10.1016/j.technovation.2009.08.003