Empowering micro and small enterprises in times of crisis: How human resources management skills and owned funds drive self-efficacy and continuity intention

Abstract

Business continuity for micro and small enterprises has been a critical challenge, especially under adverse conditions, that needs to be addressed. This study aims to understand the key factors strengthening entrepreneurial self-efficacy and business continuity during unfavourable times. In particular, this study investigates the role of human resources management skills and entrepreneur-owned funds in developing entrepreneurial self-efficacy among micro and small entrepreneurs and how this self-efficacy strengthens their intention to continue their businesses during adverse times. Accordingly, a sample of 300 responses from micro- and small-scale entrepreneurs was collected using an online questionnaire and on-site visits. Data analysis was completed using partial least squares-structural equation modelling. Human resources management skills showed a positive and significant influence on the intention to continue business and entrepreneurial self-efficacy, and entrepreneurial self-efficacy partially mediated the relationship between the intention to continue business and human resources management skills. Furthermore, while entrepreneur-owned funds showed a non-significant relationship to the intention to continue the business, they showed a positive relationship with entrepreneurial self-efficacy. Finally, entrepreneurial self-efficacy could fully mediate the relationship between the intention to continue the business and the entrepreneur-owned funds and had a positive and significant direct relationship with the intention to continue the business. The paper confirms that policymakers need to focus on enhancing the human resources management skills among micro and small entrepreneurs as well as assist them in arranging and managing their owned funds, as this will contribute positively to strengthening their entrepreneurial self-efficacy during adverse times which in turn develop better intention to continue their businesses and better sustainability despite the challenges they face.