Entrepreneurship and Innovation: An Empirical Study in Agro-industry

Abstract

As the backbone of Indonesia’s economy, micro, small, and medium enterprises (MSMEs) are the vital business to be concerned with. This study aims to determine how entrepreneurship orientation and product innovation affect agro-industry firm performance. This study used a quantitative approach with 157 respondents from MSMEs in South Sulawesi, Indonesia. The analysis used structural equation modeling (SEM) with Smart-PLS application. The results showed that entrepreneurial orientation is an important factor that affects firm performance, and product innovation mediates the relationship between entrepreneurial orientation and firm performance. The article deepens our understanding of the entrepreneurship orientation construct by examining how firm performance is positively impacted and including product innovation as a mediating factor. The results from our sample lend credence to the idea that creating entrepreneurship orientation influences firm performance directly or indirectly through product innovation. This study provides a theoretical and empirical basis on entrepreneurship and innovation in agro-industry.