Positive Psychological Capital and Sustained Competitive Advantage of Born Global SMEs: Mediating role of Transformational Leadership

Abstract

While born global literature has profoundly gained scholarly attention for development of born global SMEs in emerging economies since last decade, its empirical and theoretical presence in terms of sustained competitiveness of these firms is limited. Sustained competitive advantage of the firm has been numerously linked with its investigations in reference to financial, human and social capital of “what you have”, “what you know”, and “who you know”, yet the empirical enquiry of “who you are” and its significance in determining long-term competitiveness of firm is missing. We present and evaluate an inter-disciplinary research framework employing positive psychological capital (PsyCap) and transformational leadership (TFL) for determining sustained competitive advantage of born global SMEs in Malaysia. Using quantitative research design, data from 212 born global SMEs in Malaysia was analyzed. Findings revealed significant relationship of psychological capital with sustained competitive advantage and partial mediation of transformational leadership in this regard. Practical implications emphasize developing “HERO within” by working on PsyCap of born global entrepreneurs to champion sustained competitiveness. Future research recommendations are also provided.