Entrepreneurial Leadership and Entrepreneurial Success: The Mediating Role of Entrepreneurial Opportunity Recognition and Innovation Capability

Abstract

Micro-, small, and medium enterprises (MSMEs) play a crucial role in the economic growth of emerging markets. This study examines the effect of entrepreneurial leadership (EL) on the entrepreneurial success (ES) of MSMEs in Malaysia through the mediating effect of entrepreneurial opportunity recognition (EOR) and innovation capability (IC). To examine the proposed mediation model, we utilized a structured questionnaire to collect data for this quantitative research. Partial least square-structural equation modeling (SEM) was used to test the hypothesis on a sample of 401 micro-business owners/managers in Malaysia. The findings reveal that an EL has a significant positive effect on ES but is conditional on the mediating role of EOR and IC. However, the results show that EOR and IC partially mediate the link between EL and ES. Additionally, EOR and IC serially mediated the relationship between EL and ES. This research has valuable contributions to MSMEs by explaining EL, EOR, and IC’s critical role in gaining competitive advantage and achieving success. This research develops a theory-based mediation model to demonstrate how the EL and ES of MSMEs are related. Further, the model in this study adds to the body of knowledge by examining whether or not serial mediation occurs through EOR and IC. Hence, this research sheds new light on the relationship between EL and ES.