Intentional model of MSMEs growth: a tripod-based view and evidence from Indonesia

Abstract

Purpose The purpose of this study is to explore growth models based on “industry-based capabilities”, “resources-based capabilities” and “institution-based capabilities” in the context of the determinants of micro, small and medium enterprises’ (MSMEs) actors’ intention to grow. Design/methodology/approach This study involved 188 owners/managers of MSMEs. The analysis was conducted using partial least squares structural equation modelling. Moreover, the importance-performance map analysis package is used to complement the study findings. Findings This study uses the framework of the resource-based view (entrepreneurial knowledge), industrial-based view (industrial linkage) and institutional-based view (government support and access to finance) as proxies of the tripod-based view framework. The findings show that entrepreneurial knowledge (skills, competencies and functional), government support, access to finance and industrial linkage (vertical and horizontal) significantly encourage MSMEs’ owner/manager growth intention. Practical implications Firstly, this study suggests that MSMEs actors focus on developing entrepreneurial knowledge to boost the skills, competencies and functionalities needed to improve their business capabilities, directly affecting their growth intention. Secondly, this study indicates that the growth intention of MSME players, besides increasing internal capacity, must also be supported by the external environment, such as financial institutions, government and industrial linkage. Originality/value This study offers a tripod-based view as a framework for MSMEs’ actors’ intention to grow, where the constructs in the model used so far have not been explored comprehensively in the context of MSMEs. So, the built model brings more relevant factors to explain this topic from various perspectives.

Unlocking Economic Landscape: Understanding the Dynamics of Financial Challenges, Business Traits, Financial Resources, Growth Phases, Financial Accessibility, and MSME Performance

“…This result is consistent with the research conducted by (Kurdi et al, 2023). Furthermore, the study conducted by (Utama et al, 2024) supports these findings, indicating that factors such as access to finance, technology, and infrastructure have a positive impact on the performance of MSMEs.…”

“…Therefore, MSMEs are crucial for job creation and poverty alleviation. The study identified factors such as access to finance, technology, and infrastructure that positively impact MSME performance (Utama et al, 2024) H5: Financial accessibility has a significant positive impact on MSME Performance.…”

“…The loans from moneylenders (FR4) Growth Phases of an MSME (X4) Conception/Development stage (GP1) (Berisha et al, 2024), (Fowowe, 2023), (Kurdi et al, 2023), (Kurdi et al, 2023), (Utama et al, 2023).…”

“…Organizations go through growth stages similar to those that occur in humans, involving birth, maturity, change, and even death (Ariani et al, 2024). The organization needs to go through several stages during its development over a specific period (Utama et al, 2024). During this period of transformation, companies not only increase in size but also improve their procedures and frameworks to align with the needs of both internal and external environments (Jatmiko et al, 2022).…”

Ending Poverty: Islamic Solutions For The Welfare of The Ummah

“…MSMEs are generally labor-intensive so they absorb a lot of labor. The government needs to encourage the growth of MSMEs through ease of licensing, access to financing, training, and product marketing (Utama et al, 2023). MSMEs also need to continue to be empowered so that they can develop into medium and large businesses.…”