Impact of Entrepreneurial Orientation on MSME Performance: Mediating Role of Entrepreneurial Competency

Abstract This study uses entrepreneurial competencies as a mediating element to explore the scope and pattern of influence of entrepreneurial orientation (EO) on micro, small and medium entrepreneur (MSME) business success. The study’s target population was small-scale business owners and employees from Rajasthan, India. A sample of 339 small companies was selected through the purposive sampling method. Data were gathered through a survey instrument designed given an appropriate theoretical context. The survey instrument was tested for its proper validity and reliability. Further, we used the structural equation modeling approach to test the hypotheses. Derived findings indicated that the direct impact of entrepreneurial orientation (EO) on firm performance was significant. Additionally, the relationship between EO and MSME performance was partially mediated by entrepreneurial competencies. The conceptual framework and findings offer the MSME sector entrepreneur new directions for positioning their product in customers’ minds and supporting the growth of an innovative and opportunistic mindset. The current research findings help to outperform the competition and take advantage of market opportunities. The organization must be able to correctly match what it delivers to the consumer with the needs and demands of the customer.