Article Metrics

Article abstract view : 319 times
PDF full text: 0 times

The Effect of Owner’s Characteristics through Innovation on the MSMEs Performance

Ririn Wulandari, Wei-Loon Koe


This study aims to analyze the influence of the characteristics of MSME owners on their performance through innovation in Indonesia and Malaysia. Structural Equation Modeling (SEM) was used to analyze the data, with the Smart-PLS program. The population in this study was Micro, Small, and Medium Enterprises from various types of businesses. The number of respondents was 225 from Indonesia and Malaysia. The sampling technique used was stratified judgment sampling. Questionnaire in the form of Google Forms and distributed via WhatsApp, Facebook, and Instagram. The study results show that innovation affects the performance of MSMEs in Indonesia and Malaysia. In Indonesia, owner characteristics influence innovation but do not affect performance. With the characteristics they have, MSME owners can improve their performance through the creation of innovations. However, this is not the case in Malaysia.


Innovation, Enterpreneur Characters, Performance, MSMEs

Full Text:




Abdilahi, M.H., Hassan, A.A., Muhumed, M.M. (2017). The impact of Innovation on Small and Medium Enterprises Performance: Empirical Evidence from Hargeisa, Somaliland. International Journal of Academic Research in Business and Social Sciences,7 (8), 14-28.

Alharbi, R.K., Yahya, S., Ahmed, E.R. (2018). Characteristics of Manager’s and SMEs Performance: The Role of Access to Finance Moderator. International Journal of Engineering & Technology,7 (4), 5115-5119.

Berkhout, G., Hartmann, D., Trott, P. (2010). Connecting Technological Capabilities with Market Needs Using a Cyclic Innovation Model. Research and Development Management, 40 (5), 474-490.

Christensen, C.M., McDonald, R., Altman, E.J., Palmer, J.E. (2018). Disruptive Innovation: An Intellectual History and Directions for Future Research. Journal of Management Studies, 55(7), 1043-1078.

Cowling, M., Brown, R., Rocha, A. (2020). Did you save some cash for rainy Covid-19 day? The crisis and SMEs. International Small Business Journal:Researching Entrepreneurship, 38(7), 593-604.

Dormant, D. (2011). The Chocolate Model of Change. 1st edition.

Hair, J.F., Black, W.C., Babin, B.J., Anderson, R.E. (2006). Multivariate Data Analysis. 7 ed. England: Pearson Education Limited.

Ibrahim, Z., Abdullah, F., Ismail, A. (2016). International Business Competence and Small and Medium Enterprises. Proceedia-Social and Behavior Sciences, 224, 393-400.

Ivanus, G., Repanovici, A. (2016). SME’s Innovation Strategy for Business Continuity and Crisis Management. Bulletin of The Transilvania University of Brasov, 9(58), 155-162.

Jayawarna, D., Wilson, A., Macpherson, A. (2007). Training Commitment and Performance in Manufacturig SMEs. Journal of Small Business and Enterprise Development, 14(2), 321-338.

Kaiser, U. (2001). Product innovation and Product Innovation Marketing: Theory and Microeconometric Evidence. Centre for European Economic Research, Discussion Paper, 01(31).

Kemenko (2020) Pengaduan e-form Siapbersamaumm, Kemenko UKM per 3 Juni 2020 (data diolah).

Li, Y.-H., Huang, J.-W., & Tsai, M.-T. (2009). Entrepreneurial Orietation and Firm performance: The Role of Knowledge Creation Process. Industrial Marketing Management, 38(4), 440-449.

Lim, D.S.K, Morse, E.A., Yu, N. (2020). The Impact of The Global Crisis on The Growth of SMEs: A Resource System Perspective. International Small Business Journal: Researching Entrepreneurship, 38(6), 492-503.

Liu, C., Jiang, H. (2020). Impact of CEO characteristics on firm performance: evidence from China listed firms. Applied Economics Letter, 27(14), 2-5.

Maradana, R.P., Pradhan R.P., Dash, S., Gaurah, K., Jayakumar, M., Chatterjee, D. (2017). Does Innovation Promote Economic Growth? Evidence from European Countries. Journal of Innovation and Entrepreneurshi, 6 (1), 1-23.

Martines-Vergara, S.J., Valss-Pasola, J. (2020). Clarifying the disruptive innovation puzzle: a critical review. European Journal of Innovation Management, Vol. ahead-of-print, 1-26.

Mulyani. S. (2020). Menkeu: Triwulan II 2020, Pertumbuhan Ekonomi Menunjukkan Perbaikan Signifikan. Majalah Kementerian Keuangan Republik Indonesia, ekonomi-indonesia-tunjukkan-perbaikan-signifikan.

Ndalira, D.W., Ngugi, J.K, & Chepkulei B. (2013). Effect of The Type of Innovation on The Growth of Small and Medium Entreprises in Kenya: a Case Garment Enterprises in Jericho, Nairobi. Eropean Journal of Management Sciences and Economics, 1(3), 49-57.

Nastasiea, M., Mironeasa, C. (2020). Key Performance indicators in Small and Medium Sized Enterprises. Tehnomus.

Omar, A.R.C., Ishak, S., Jusoh, M.A. (2020). The Impact of Covid-19 Movement Control on SMEs Business and Survival Strategies. Malaysian Journal of Society and Space, 16(2):139-150.

Rosli, M.M. & Sidek, S. (2013). The Impact of Innovation on Performance of Small and Manufacturing Enterprises: Evidence from Malaysia. Journal of Innovation Management, 1- 16.

Sabeli, H. (2008). Bios Theory of Innovation. The Innovation Journal: The Public Sector Innovation Journal, 13(3), 1-13.

Spanjol, J., Muhlmeier, S., Tomczak, T. (2012). Strategic Orientation and product Innovation: Exploring Decompositional Approach. Journal of product Innovation Management, 29(6), 967-985.

Taalbi, J. (2017). What Drives Innovation? Evidence from Economic History. Research Policy, 46(8), 1437-1453.

Tehseen, S., Sajilan, S. (2016). Impact of Innovative Practices on Moderating Impact of Culture- A Conseptual Model. Integrative Business & Economics, 5(2), 28-46.

Tencer, K., Cadoso, J.P. (2014). Cause a Distrurbance: If You can slice a melon or make right-hand Turn You Can Be Breathrough Innovator. New York: Spyder Works Inc.

Thornhill, S. (2006). Knowledge, Innovation and Firm Performance in High and Low Technology Regimes. Journal of Business Venturing, 21, 687-703.

Tradingeconomic. (2020).

Terziovski, M. (2010). Innovation Practice and Its Performance implications in Small and Medium Enterprises (SMEs) in The Manufacturing Sector: a Resource-Based View. Strategic Management Journal, 31(8), 892-902.

Woldie, A., Leighton, P., Adeusa, A. (2008). Factors influencing small and medium enterprises (SMEs): an exploratory study of owner/manager and firm characteristics. Journal Bank and Bank Systems, 3(3), 1-10.

Zhou, K.Z., Brown, J.R., Dev, C.S., Agarwal, S. (2007). The Effects of Customer and Competitor Orientation on Performance in Global Markets: A contingency Analysis. Journal of International Business Studies, 38, 303-319.

Copyright (c) 2022 Ririn Wulandari, Wei-Loon Koe

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

International Research Journal of Business Studies has been covered by the following services:

Image result for university of Saskatchewan small logo