Absorptive Capacity, Innovativeness and the Performance of Micro-enterprises in Malaysia

Abstract

This study examines the effect of the entrepreneur’s innovativeness and absorptive capacity on micro-enterprise innovativeness and the performance of micro-enterprises owned and managed by women micro-entrepreneurs in Peninsular Malaysia. This study adopted a cross-sectional design and stratified sampling methods, and collected complete data from 417 micro-entrepreneurs. Findings of this study reveal that women micro-entrepreneurs’ innovativeness and absorptive capacity have a significant positive effect on micro-enterprise innovativeness and the performance of micro-enterprises. The development programmes and policies on innovation and SMEs should therefore emphasize on promoting innovativeness and improving the absorptive capacity among the women micro-entrepreneurs to improve the performance of micro-enterprises.

How international SME's vicarious learning may improve their performance? The role of absorptive capacity, strength of ties with local SMEs, and their prior success experiences

“…However, less research is available for SMEs, particularly the role of international SMEs' ACAP in improving their innovation in host countries. Albort-Morant et al (2018), , and Al Mamun et al (2017) find a positive association between ACAP and firm innovativeness. Based on these premises, the current study proposes the following hypothesis: H3: International SMEs' ACAP raises their innovation.…”

“…Ali, Musawir, and Ali (2018) also hold that higher levels of ACAP lead to higher organizational performance. Similarly, Mamun et al (2017) hold that SMEs' ACAP is positively related to firm performance. However, although the previous literature provides evidence on the role of ACAP in improving firm performance, less is known about the extent to which ACAP derived through vicarious learning from networked firms in the transnational market improves firm performance in international markets.…”

Mediating Effect of Social Media Marketing Adoption Towards Business Performance: An Approach of Structural Equation Modelling Partial Least Square (SEM-PLS)

“…Performance is the key indicator of success of any businesses, either small or medium enterprises as well as large organisations. With regards to the performance of small businesses, their success is defined by the capability of these business makers to lead across multitude of aspects, such as the provision of opportunities for employment, the generation of wealth through business start-ups, their business longevity and lastly, business sustainability (Mamun,Muhammad &Ismail, 2017;Zakaria, Yasoa', Ghazali, Ibrahim & Ismail, 2017;Sandberg, Vinberg & Pan, 2002). Meanwhile, Pfeffer and Salancik (2003) defined performance as the company's capability to initiate action and appropriate results, while Anggadwita and Mustafid (2014) defined organisational performance as the measure of a company's success in reaching its targets.…”

Does the Innovation Capability and Competency Affect the Innovation Performance of Malaysian’s SMES?

“…Regardless of its definition and classification, innovation is considered a firm's core value creation capacity and regarded as one of the most important competitive weapons not only for larger firms, but also SMEs (Andries & Czarnitzki, 2012). Previous scholars, for example, Schumpeter (1934), initially recommended that SMEs are likely to be the source of most innovation (Ekpe et al, 2015;Mamun et al, 2017). Since then, the SME industry holds a significant share in the field of innovation (Abereijo, Ilori, Taiwo, & Adegbite, 2007).…”