A Effect Entrepreneurship Orientation, Government Support on Innovation and Business Performance of SME’s Madura Island
Keywords:
Entrepreneurship Orientation, Government Support, Innovation, Business Performance
Abstract
This study focuses on the influence of government-supported entrepreneurial orientation in increasing innovation and business performance in the batik sector on Madura Island, directly or indirectly on innovation and business performance in the batik sector in four districts of the Madura archipelago. There are many existing studies aimed at analyzing the effect of the three variables on business performance directly. However, there is no research that analyzes the effect of these variables, especially government support on business performance, directly without mediating variables and innovation variables being the dependent variable. So it becomes a new construction in this research.
The population of this research is 141 batik business units. Sampling in this study uses a census technique. Before the research instruments were distributed, validity and reliability tests were first carried out on the research instrument questionnaire, which was tested on 141 batik business units. The data analysis method used in this research is descriptive statistical analysis and inferential analysis. Descriptive analysis is used to provide an empirical description of the answers, while in inferential analysis the Generalized Structured Component Analysis (GSCA) method is used.
The results of direct hypothesis testing show that entrepreneurial orientation has a significant effect on innovation and business performance, government support has a significant effect on innovation, and innovation has a significant effect on business performance. Meanwhile, government support has no significant effect on business performance.
References
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Bonacina Roldan, L., Hansen, P. B., & Garcia-Perez-de-Lema, D. (2018). The relationship between favorable conditions for innovation in technology parks, the innovation produced, and companies’ performance: A framework for an analysis model. Innovation and Management Review, 15(3), 286–302. https://doi.org/10.1108/INMR-05-2018-0027
Briozzo, A., Cardone-Riportella, C., & García-Olalla, M. (2019). Corporate governance attributes and listed SMES’ debt maturity. Corporate Governance (Bingley), 19(4), 735–750. https://doi.org/10.1108/CG-11-2017-0272
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Cho, M., Bonn, M. A., Han, S. J., & Kang, S. (2018). Partnership strength and diversity with suppliers: Effects upon independent restaurant product innovation and performance. International Journal of Contemporary Hospitality Management, 30(3), 1526–1544. https://doi.org/10.1108/IJCHM-01-2017-0016
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Lumpkin, G.T. and Dess, G. . (1996). Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance. Academy of Management Review, 21, 135–172.
Makinde, O. G., & Agu, C. U. (2018). Strategic Entrepreneurship and Performance of Small and Medium Scale Enterprises in Aba Metropolis. Archives of Business Research, 5(9), 1–107. https://doi.org/10.14738/abr.69.5120
Mason, M. C., Floreani, J., Miani, S., Beltrame, F., & Cappelletto, R. (2015). Understanding the Impact of Entrepreneurial Orientation on Smes’ Performance. the Role of the Financing Structure. Procedia Economics and Finance, 23(October 2014), 1649–1661. https://doi.org/10.1016/s2212-5671(15)00470-0
Ndubisi, N. O., & Agarwal, J. (2014). Quality performance of SMEs in a developing economy: Direct and indirect effects of service innovation and entrepreneurial orientation. Journal of Business and Industrial Marketing, 29(6), 454–468. https://doi.org/10.1108/JBIM-07-2013-0146
Pérez-Luño, A., Bojica, A. M., & Golapakrishnan, S. (2019). When more is less: The role of cross-functional integration, knowledge complexity and product innovation in firm performance. International Journal of Operations and Production Management, 39(1), 94–115. https://doi.org/10.1108/IJOPM-04-2017-0251
Poernomo, D. Wahono, P. & Puspitaningtyas, Z. (2017). The Role of Knowledge Absorption inthe Mediation of the Effect of Social Network on the Competitive Advantages of “Batik” Micro Company. Archives of Business Research, 5(12). https://doi.org/10.14738/abr.512.3933
Rapaccini, M., Saccani, N., Kowalkowski, C., Paiola, M., & Adrodegari, F. (2020). Navigating disruptive crises through service-led growth: The impact of COVID-19 on Italian manufacturing firms. Industrial Marketing Management, 88(May), 225–237. https://doi.org/10.1016/j.indmarman.2020.05.017
Rosli Mahmood, Mahmood, R., Aarakit, S. M., Alarape, A. A., Al-swidi, A. K., Al-Hosam, A., Aminu, I. M., Shariff, M. N. M., Zhongfeng Su, En Xie, and Y. L., Ahmed, I., Ali, G., Ramzan, M., Andersén, J., Anderson, B. S., Eshima, Y., Arbaugh, J., Larry, W., Camp, S., Arief, M., … Me, N. (2013). Entrepreneurial orientation and business performance of women-owned small and medium enterprises in Malaysia : Competitive advantage as a mediator. International Journal of Business and Social Science, 4(1), 82–90. https://doi.org/10.1177/0266242612455034
Setyawati, S. M., & Rosiana, M. (2015). Inovasi Dan Keunggulan Kompetitif Sebagai Variabel Mediasi Pengaruh Orientasi Pasar Terhadap Kinerja Bisnis (Studi Empiris Pada Usaha Kecil Dan Menengah Di Purwokerto). Sustainable Competitive Advantage (SCA), 5(1).
Shahzad, F., Xiu, G. Y., & Shahbaz, M. (2017). Organizational culture and innovation performance in Pakistan’s software industry. Technology in Society, 51, 66–73. https://doi.org/10.1016/j.techsoc.2017.08.002
Shanker, R., Bhanugopan, R., van der Heijden, B. I. J. M., & Farrell, M. (2017). Organizational climate for innovation and organizational performance: The mediating effect of innovative work behavior. Journal of Vocational Behavior, 100, 67–77. https://doi.org/10.1016/j.jvb.2017.02.004
Ucaktürk, A., Bekmezci, M., & Ucaktürk, T. (2011). Prevailing during the periods of economical crisis and recession through business model innovation. Procedia - Social and Behavioral Sciences, 24(December 2011), 89–100. https://doi.org/10.1016/j.sbspro.2011.09.095
Valmohammadi, C. (2017). Customer relationship management: Innovation and performance. International Journal of Innovation Science, 9(4), 374–395. https://doi.org/10.1108/IJIS-02-2017-0011
van Tulder, R., Seitanidi, M. M., Crane, A., & Brammer, S. (2016). Enhancing the Impact of Cross-Sector Partnerships: Four Impact Loops for Channeling Partnership Studies. Journal of Business Ethics, 135(1), 1–17. https://doi.org/10.1007/s10551-015-2756-4
Vasconcelos, R., & Oliveria, M. (2018). Does innovation make a difference? Innovation & Management Review, 15(2), 137–154. https://doi.org/10.1108/inmr-04-2018-011
Zhang, S., Wang, Z., Zhao, X., & Zhang, M. (2017). Effects of institutional support on innovation and performance: Roles of dysfunctional competition. Industrial Management and Data Systems, 117(1), 50–67. https://doi.org/10.1108/IMDS-10-2015-0408
Arshad, A. S., Rasli, A., Arshad, A. A., & Zain, Z. M. (2014). The Impact of Entrepreneurial Orientation on Business Performance: A Study of Technology-based SMEs in Malaysia. Procedia - Social and Behavioral Sciences, 130(February 2016), 46–53. https://doi.org/10.1016/j.sbspro.2014.04.006
Aziz, A.M. Irjayanti, M. & Susanto, R. . (2019). Entrepreneurial Orientation and Innovation for Improving Competitive Advantage. Journal of Engineering and Science Research, 3(2), 1–7.
Bonacina Roldan, L., Hansen, P. B., & Garcia-Perez-de-Lema, D. (2018). The relationship between favorable conditions for innovation in technology parks, the innovation produced, and companies’ performance: A framework for an analysis model. Innovation and Management Review, 15(3), 286–302. https://doi.org/10.1108/INMR-05-2018-0027
Briozzo, A., Cardone-Riportella, C., & García-Olalla, M. (2019). Corporate governance attributes and listed SMES’ debt maturity. Corporate Governance (Bingley), 19(4), 735–750. https://doi.org/10.1108/CG-11-2017-0272
Buli, B. M. (2017). Entrepreneurial orientation, market orientation and performance of SMEs in the manufacturing industry: Evidence from Ethiopian enterprises. Management Research Review, 40(3), 292–309. https://doi.org/10.1108/MRR-07-2016-0173
Carrascal Incera, A., & Fernández, M. F. (2015). Tourism and income distribution: Evidence from a developed regional economy. Tourism Management, 48, 11–20. https://doi.org/10.1016/j.tourman.2014.10.016
Cegliński, P. (2017). the Concept of Competitive Advantages. Logic, Sources and Durability. Journal of Positive Management, 7(3), 57. https://doi.org/10.12775/jpm.2016.016
Chang, J.-C., Yang, Y.-L., Chang, J. C., & Yan, Y. L. (2012). The Effect of Organization’s Innovational Climate on Student’s Creative Self-Efficacy and Innovative Behavior. Business & Entrepreneurship Journal, 1(1), 2241–2312.
Cho, M., Bonn, M. A., Han, S. J., & Kang, S. (2018). Partnership strength and diversity with suppliers: Effects upon independent restaurant product innovation and performance. International Journal of Contemporary Hospitality Management, 30(3), 1526–1544. https://doi.org/10.1108/IJCHM-01-2017-0016
Clarke, A., & Crane, A. (2018). Cross-Sector Partnerships for Systemic Change: Systematized Literature Review and Agenda for Further Research. Journal of Business Ethics, 150(2), 303–313. https://doi.org/10.1007/s10551-018-3922-2
De Beukelaer, C. (2014). Creative industries in “developing” countries: Questioning country classifications in the UNCTAD creative economy reports. Cultural Trends, 23(4), 232–251. https://doi.org/10.1080/09548963.2014.912043
Dolz, C., Iborra, M., & Safón, V. (2019). Improving the likelihood of SME survival during financial and economic crises: The importance of TMTs and family ownership for ambidexterity. BRQ Business Research Quarterly, 22(2), 119–136. https://doi.org/10.1016/j.brq.2018.09.004
Dwimahendrawan, A., & Ayunda, N. (2022). Peran Akademisi, Business, dan Pemerintah Dalam Mengembangkan Desa Wisata Batik Berbasis Inovasi Produk di Kabupaten Banyuwangi. 21(1), 25–39.
Feranita, N. V., Nugraha, A., & Sukoco, S. A. (2019). The Role of Goverment Support For Innovation and Performance of SME’s. Jurnal Politico, 561(3), S2–S3.
Handrimurtjahjo, A. D. (2014). Peran Strategic Entrepreneurship dalam Membangun Sustainable Competitive Advantage. Binus Business Review, 5(2), 437. https://doi.org/10.21512/bbr.v5i2.992
Kamukama, N. Ahiauzu, A. & Ntayi, J. . (2011). Competitive Advantage: Mediator of Intellectual Capital and Performance. Journal of Intellectual Capital, 12, 152–164.
Khouroh, U. K., Windhyastiti, I., & Handayani, K. (2019). Peran Kebijakan Pemerintah dalam Memperkuat Aliansi Strategis dan Meningkatkan Daya Saing Ekonomi Kreatif. Jurnal Manajemen Dan Kewirausahaan, 7(2), 205–224. https://doi.org/10.26905/jmdk.v7i2.3830
Kraus, S., Clauss, T., Breier, M., Gast, J., Zardini, A., & Tiberius, V. (2020). The economics of COVID-19: initial empirical evidence on how family firms in five European countries cope with the corona crisis. International Journal of Entrepreneurial Behaviour and Research, 26(5), 1067–1092. https://doi.org/10.1108/IJEBR-04-2020-0214
Lumpkin, G.T. and Dess, G. . (1996). Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance. Academy of Management Review, 21, 135–172.
Makinde, O. G., & Agu, C. U. (2018). Strategic Entrepreneurship and Performance of Small and Medium Scale Enterprises in Aba Metropolis. Archives of Business Research, 5(9), 1–107. https://doi.org/10.14738/abr.69.5120
Mason, M. C., Floreani, J., Miani, S., Beltrame, F., & Cappelletto, R. (2015). Understanding the Impact of Entrepreneurial Orientation on Smes’ Performance. the Role of the Financing Structure. Procedia Economics and Finance, 23(October 2014), 1649–1661. https://doi.org/10.1016/s2212-5671(15)00470-0
Ndubisi, N. O., & Agarwal, J. (2014). Quality performance of SMEs in a developing economy: Direct and indirect effects of service innovation and entrepreneurial orientation. Journal of Business and Industrial Marketing, 29(6), 454–468. https://doi.org/10.1108/JBIM-07-2013-0146
Pérez-Luño, A., Bojica, A. M., & Golapakrishnan, S. (2019). When more is less: The role of cross-functional integration, knowledge complexity and product innovation in firm performance. International Journal of Operations and Production Management, 39(1), 94–115. https://doi.org/10.1108/IJOPM-04-2017-0251
Poernomo, D. Wahono, P. & Puspitaningtyas, Z. (2017). The Role of Knowledge Absorption inthe Mediation of the Effect of Social Network on the Competitive Advantages of “Batik” Micro Company. Archives of Business Research, 5(12). https://doi.org/10.14738/abr.512.3933
Rapaccini, M., Saccani, N., Kowalkowski, C., Paiola, M., & Adrodegari, F. (2020). Navigating disruptive crises through service-led growth: The impact of COVID-19 on Italian manufacturing firms. Industrial Marketing Management, 88(May), 225–237. https://doi.org/10.1016/j.indmarman.2020.05.017
Rosli Mahmood, Mahmood, R., Aarakit, S. M., Alarape, A. A., Al-swidi, A. K., Al-Hosam, A., Aminu, I. M., Shariff, M. N. M., Zhongfeng Su, En Xie, and Y. L., Ahmed, I., Ali, G., Ramzan, M., Andersén, J., Anderson, B. S., Eshima, Y., Arbaugh, J., Larry, W., Camp, S., Arief, M., … Me, N. (2013). Entrepreneurial orientation and business performance of women-owned small and medium enterprises in Malaysia : Competitive advantage as a mediator. International Journal of Business and Social Science, 4(1), 82–90. https://doi.org/10.1177/0266242612455034
Setyawati, S. M., & Rosiana, M. (2015). Inovasi Dan Keunggulan Kompetitif Sebagai Variabel Mediasi Pengaruh Orientasi Pasar Terhadap Kinerja Bisnis (Studi Empiris Pada Usaha Kecil Dan Menengah Di Purwokerto). Sustainable Competitive Advantage (SCA), 5(1).
Shahzad, F., Xiu, G. Y., & Shahbaz, M. (2017). Organizational culture and innovation performance in Pakistan’s software industry. Technology in Society, 51, 66–73. https://doi.org/10.1016/j.techsoc.2017.08.002
Shanker, R., Bhanugopan, R., van der Heijden, B. I. J. M., & Farrell, M. (2017). Organizational climate for innovation and organizational performance: The mediating effect of innovative work behavior. Journal of Vocational Behavior, 100, 67–77. https://doi.org/10.1016/j.jvb.2017.02.004
Ucaktürk, A., Bekmezci, M., & Ucaktürk, T. (2011). Prevailing during the periods of economical crisis and recession through business model innovation. Procedia - Social and Behavioral Sciences, 24(December 2011), 89–100. https://doi.org/10.1016/j.sbspro.2011.09.095
Valmohammadi, C. (2017). Customer relationship management: Innovation and performance. International Journal of Innovation Science, 9(4), 374–395. https://doi.org/10.1108/IJIS-02-2017-0011
van Tulder, R., Seitanidi, M. M., Crane, A., & Brammer, S. (2016). Enhancing the Impact of Cross-Sector Partnerships: Four Impact Loops for Channeling Partnership Studies. Journal of Business Ethics, 135(1), 1–17. https://doi.org/10.1007/s10551-015-2756-4
Vasconcelos, R., & Oliveria, M. (2018). Does innovation make a difference? Innovation & Management Review, 15(2), 137–154. https://doi.org/10.1108/inmr-04-2018-011
Zhang, S., Wang, Z., Zhao, X., & Zhang, M. (2017). Effects of institutional support on innovation and performance: Roles of dysfunctional competition. Industrial Management and Data Systems, 117(1), 50–67. https://doi.org/10.1108/IMDS-10-2015-0408
Published
2023-06-15
How to Cite
Ilmiyah, I., Zarah Puspitaningtyas, Djoko Poernomo, & Anastasia Murdyastuti. (2023). A Effect Entrepreneurship Orientation, Government Support on Innovation and Business Performance of SME’s Madura Island. Asian Journal of Management, Entrepreneurship and Social Science, 3(03), 455-467. Retrieved from https://mail.ajmesc.com/index.php/ajmesc/article/view/427
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