Entrepreneurial Innovativeness and Its Impact on SMEs Performances

Grounded in the innovation literature and the composition-based view (CBV), this paper develops a framework for assessing the impact of entrepreneurial innovativeness on SME’s performances. Specifically, this paper investigates the impact of entrepreneurial innovativeness on the four types of firm performance. We employed structural equation modeling partial least square (SEM-PLS) to test our proposed theoretical framework on a dataset of 450 SMEs in the wholesale and retail industry in Malaysia. Our findings revealed that there was a significant positive impact of entrepreneurial innovativeness on three types of business performances namely perceived non-financial, perceived business growth and perceived performance relative to competitors. However, based on our findings, increased financial performance was not derived from entrepreneurial innovativeness. This study contributes to the existing literature on innovation by assessing the impact of the most influential innovative practices on the four aspects of SME’s performances in the context of wholesalers and retailers.