Entrepreneurial competences and growth of female-owned enterprises: the mediation role of absorptive capacity

Abstract

Purpose Focusing on female entrepreneurs operating in a resource-scarce environment, this study aims to draw from the resource-based view to examine the relationship between entrepreneurial competences and firm growth. Design/methodology/approach This study used a cross-sectional research design. Data was collected from 232 women entrepreneurs operating in Kampala’s two biggest markets. The data were analyzed to test the mediation effect of absorptive capacity on the relationship between entrepreneurial competences and firm growth; a Sobel test and bootstrap estimation were analytical approaches that were used. Findings This paper argues that for female entrepreneurs, the venture growth process is not simply dependent on inimitable resources such as competences, as these are first not readily available to female entrepreneurs and second, only provide a temporary competitive advantage. Rather, venture growth also involves the ability to continuously identify and exploit knowledge resources through an absorptive capacity that may be limited by the sociocultural context within which the female entrepreneur operates in sub-Saharan Africa. Originality/value The novelty of this research resides in support for the mediating role of the ability to recognize the value of new information, assimilate it and apply it to commercial ends. This study shows that female entrepreneurs use externally generated knowledge as a mechanism to grow their firms and this is impacted by the sociocultural context within which they operate. The study further improves the understanding of the resource-based view by suggesting that a black box exists in the relationship between resources and performance. It is shown that the possession of one resource facilitates the acquisition of other resources and proposes that the role of resources continuously unfolds as a firm develops.