TY - JOUR
T1 - Quality of Entrepreneurship and Micro-, Small-and Medium-sized Enterprises’ (MSMEs) Financial Performance in Indonesia*
AU - HANGGRAENI, Dewi
AU - SINAMO, Timothy
N1 - Funding Information:
This research is funded by the Directorate of Research and Development, University of Indonesia (NKB-2048/UN2.RST/ HKP.05.00/2020). 1First Author and Corresponding Author. Lecturer, Department of Management, Faculty of Economics and Business, University of Indonesia, Indonesia [Postal Address: Jl. Prof. DR. Sumitro Djojohadikusumo, Kukusan, Kecamatan Beji, Kota Depok, Jawa Barat, 16424, Indonesia] Email: [email protected] 2Department of Management, Faculty of Economics and Business, University of Indonesia, Indonesia. Email: [email protected]
Publisher Copyright:
© Copyright: The Author(s) This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.
PY - 2021
Y1 - 2021
N2 - The purpose of this study is to investigate the quality of entrepreneurship – motivation, entrepreneurial orientation, and risk behavior – in relation to the odds of micro-, small-and medium-sized enterprises’ (MSMEs) financial performance in Indonesia. Additionally, this paper investigates how these qualities apply for the current challenges perceived by MSMEs’ entrepreneurs in Indonesia due to Covid-19 crisis; specifically, this paper examines the odds of MSMEs’ financial performance during the pandemic in respect to when these qualities are implemented by the entrepreneurs. The empirical data was obtained from an online survey by means of a structured questionnaire. MSMEs surveyed were randomly selected on a national scale. To test the hypotheses, a quantitative approach is employed, using multinomial regression. The main result shows that, under normal economic environment, the more intrinsically-motivated and continuity-driven entrepreneur is, the more likely the MSME will achieve financial growth compared to remaining stagnant. To our surprise, innovativeness leads to less likelihood of MSME’s financial growth, suggesting the significance of innovation does not apply to MSMEs in Indonesia. Lastly, MSMEs’ risk behavior to operate in a stable business environment is found more likely to result in a better performance and is true for operational and financial risks, but not marketing risks.
AB - The purpose of this study is to investigate the quality of entrepreneurship – motivation, entrepreneurial orientation, and risk behavior – in relation to the odds of micro-, small-and medium-sized enterprises’ (MSMEs) financial performance in Indonesia. Additionally, this paper investigates how these qualities apply for the current challenges perceived by MSMEs’ entrepreneurs in Indonesia due to Covid-19 crisis; specifically, this paper examines the odds of MSMEs’ financial performance during the pandemic in respect to when these qualities are implemented by the entrepreneurs. The empirical data was obtained from an online survey by means of a structured questionnaire. MSMEs surveyed were randomly selected on a national scale. To test the hypotheses, a quantitative approach is employed, using multinomial regression. The main result shows that, under normal economic environment, the more intrinsically-motivated and continuity-driven entrepreneur is, the more likely the MSME will achieve financial growth compared to remaining stagnant. To our surprise, innovativeness leads to less likelihood of MSME’s financial growth, suggesting the significance of innovation does not apply to MSMEs in Indonesia. Lastly, MSMEs’ risk behavior to operate in a stable business environment is found more likely to result in a better performance and is true for operational and financial risks, but not marketing risks.
KW - Entrepreneurial Orientation
KW - Financial Performance
KW - Motivation
KW - MSMEs
KW - Risk Behavior
UR - http://www.scopus.com/inward/record.url?scp=85104033898&partnerID=8YFLogxK
U2 - 10.13106/jafeb.2021.vol8.no4.0897
DO - 10.13106/jafeb.2021.vol8.no4.0897
M3 - Article
AN - SCOPUS:85104033898
SN - 2288-4637
VL - 8
SP - 897
EP - 907
JO - Journal of Asian Finance, Economics and Business
JF - Journal of Asian Finance, Economics and Business
IS - 4
ER -