Abstract

The purpose of this paper is to explore the extent of entrepreneurial competencies and innovation on business success in SMEs in Malaysia. Specifically, this study tested the mediating role of product innovation and process innovation between the relationship of entrepreneurial competencies and business success. The statical sample population of this research includes 407 owner and manager involved in SMEs, both manufacturing and services & other sectors. For data collection, a standard questionnaire using seven-point Likert scale and 72 items was used to evaluate 12 entrepreneurial competencies (strategic competency, commitment competency, conceptual competency, opportunity competency, organising and leading competency, relationship competency, learning competency, personal competency, technical competency, familism competency, ethical competency & social responsibility competency), seven items for innovation (product & process innovation) and, ten items for business success (financial & non-financial). Four hypotheses were developed in this study. The SPSS version 21.0 and Structural equation model (SEM)-AMOS version 21.0 techniques were used. The findings indicate that there is a positive and significant relationship between the entrepreneurial competencies and innovation on business success in SMEs. Moreover, there is a positive and significant relationship between all dimension of competencies and business success. The product innovation and process innovation served as partial mediator between entrepreneurial competencies and business success. Limitations and implications for future studies are discussed.

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