|Title:||Human Capital and Entrepreneurial Competencies towards Performance of Informal Microenterprises in Kelantan, Malaysia|
Vol. 11, No 4, 2018
Published date: 12-2018 (print) / 12-2018 (online)
Economics & Sociology
ISSN: 2071-789X, eISSN: 2306-3459
Noor Raihani Zainol
Universiti Malaysia Kelantan
Abdullah Al Mamun
Universiti Malaysia Kelantan
Ghazali Bin Ahmad
Universiti Malaysia Kelantan
Derweanna Bah Simpong
Universiti Malaysia Kelantan
|Keywords:||informal microenterprise, human capital, entrepreneurial competencies, performance, women entrepreneurship|
|JEL classification:||J24, O17|
|This research was funded by the Ministry of Higher Education, Malaysia under the grant entitled “Research Acculturation Grant Scheme – RAGS” (Grant Code: RAGS/1/2014/SS05 /UMK//4), Topic: Entrepreneurial Competency among Women Informal Traders: A Study in Peninsular Malaysia).|
Microenterprise is essential for strengthening the economies in developing countries through job creation, skills’ development, self-esteem, and knowledge. This study intended to measure the effect of human capital on entrepreneurial competencies and the effect of entrepreneurial competencies on the performance of informal microenterprises owned and managed by women-microentrepreneurs in Kelantan, Malaysia. This study has employed a cross-sectional design and collected quantitative data from 384 informal women-entrepreneurs in Kelantan, Malaysia. The result indicated that human capital and entrepreneurial competencies had a significant positive effect on women microenterprises’ performance. Despite the increase in the number of research in this subsector, little attention has been given to the effect of human capital and entrepreneurial competencies on business performance in Malaysia. Therefore, this study aims to examine human capital, entrepreneurial competencies, and business performance among informal microenterprises owned and managed by women in Kelantan, Malaysia. Given that investments in human capital and entrepreneurial competencies improve the performance of informal microenterprises, the government and development organizations should, therefore, focus on entrepreneurship development programs, so that to improve the entrepreneurial competencies among women microentrepreneurs in Kelantan, Malaysia.
1. Abor, J., & Quartey, P. (2010). Issues in SME development in Ghana and South Africa. International Research Journal of Finance and Economics, 39(6), 215-228.
2. Achtenhagen, L., Melin, L., and Naldi, L. (2013). Dynamics of Business Models–Strategizing, Critical Capabilities and Activities for Sustained Value Creation. Long Range Planning, 46(6), 427-442.
3. Ackerman, P. L., & Humphreys, L. G. (1990). Individual Differences Theory in Industrial and Organizational Psychology, In: Hough, L.M. (Ed.), 2nd ed. Handbook of Industrial and Organizational Psychology, Vol.1. Consulting Psychologists Press, Palo Alto, p
4. Agarwala, T. (2003). Innovative Human Resource Practices and Organizational Commitment: An Empirical Investigation. International Journal of Human Resource Management, 14(2), 175-197.
5. Aldrich, H., & Auster, E. R. (1986). Even Dwarfs Started Small: Liabilities of Age and Size and their Strategic Implications. Research in Organizational Behavior, 8, 165–198.
6. Arbussa, A., Bikfalvi, A. & Marquès, P. (2017). Strategic agility-driven business model renewal: the case of an SME. Management Decision, 55(2), 271-293.
7. Bae, J., & Rowley, C. (2004). Macro and Micro Approaches in Human Resource Development: Context and Content in South Korea. Journal of World Business, 39(4), 349-361.
8. Baum, J. A., & Singh, J. V. (1994). Evolutionary Dynamics of Organizations.Oxford University Press.
9. Becker, B. E., Huselid, M. A., & Ulrich, D. (2001). The HR Scorecard: Linking People, Strategy, and Performance. Harvard Business Press.
10. Bigsten, A., & Gebreeyesus, M. (2007). The Small, The Young, and The Productive: Determinants of Manufacturing Firm Growth in Ethiopia. Economic Development and Cultural Change, 55(4), 813-840.
11. Boden, R. J., & Nucci, A. R. (2000). On The Survival Prospects of Men's and Women's New Business Ventures .Journal Of Business Venturing, 15(4), 347-362.
12. Brush, M. C., & Ruse, D. H. (2005). Driving Strategic Success Through Human Capital Planning: How Corning Links Business and HR Strategy to Improve The Value and Impact of Its HR Function. Human Resource Planning, 28(1), 49-61.
13. Burcharth, A., Præst Knudsen, M., & Søndergaard, H. A. (2017). The role of employee autonomy for open innovation performance. Business Process Management Journal, 23(6), 1245-1269.
14. Carter, N., Brush, C., Greene, P., Gatewood, E., & Hart, M. (2003). Women Entrepreneurs Who Break Through to Equity Financing: The Influence of Human, Social and Financial Capital. International Journal of Entrepreneurial Finance, 5(1), 1-28.
15. Cooper, A. C., Gimeno-Gascon, F. J., & Woo, C. Y. (1994). Initial Human and Financial Capital as Predictors of New Venture Performance. Journal of Business Venturing, 9, 371–395.
16. Department of Statistics, Malaysia (2014). GDP by State 2005-2013. Retrieved from www.statistics.gov.my/index.php?r=column/ (02 July 2016).
17. Dimov, D. (2010). Nascent Entrepreneurs and Venture Emergence: Opportunity Confidence, Human Capital, and Early Planning. Journal of Management Studies, 47 (6), 1123–1153.
18. Dimov, D. (2017). Towards a qualitative understanding of human capital in entrepreneurship research. International Journal of Entrepreneurial Behavior and Research, 23(2), 210-227.
19. Fairlie, R. W., & Robb, A. M. (2009). Gender Differences in Business Performance: Evidence from the Characteristics of Business Owners Survey. Small Business Economics, 33(4), 375-395.
20. Ganotakis, P. (2012). Founders’ Human Capital and The Performance of UK New Technology Based Firms. Small Business Economics, 39(2), 495-515.
21. Garud, R., Giuliani, A. P. (2013). A Narrative Perspective on Entrepreneurial Opportunities. Academy Management Revision. 38(1), 157–160.
22. Guthrie, J. P., Spell, C. S., & Nyamori, R. O. (2002). Correlates and Consequences of High Involvement Work Practices: The Role of Competitive Strategy. International Journal of Human Resource Management, 13(1), 183-197.
23. Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed A Silver Bullet. Journal of Marketing theory and Practice, 19(2), 139-152.
24. Hair, J. F., Ringle, C. M., & Sarstedt, M. (2013). Editorial-Partial Least Squares Structural Equation Modeling: Rigorous Applications, Better Results and Higher Acceptance. Long Range Planning, 46(1-2), 1-12.
25. Hair, J. F., Sarstedt, M., Hopkins, L., & G. Kuppelwieser, V. (2014). Partial Least Squares Structural Equation Modeling (PLS-SEM) An Emerging Tool in Business Research.European Business Review, 26(2), 106-121.
26. Hanohov, R., & Baldacchino, L. (2018). Opportunity recognition in sustainable entrepreneurship: an exploratory study. International Journal of Entrepreneurial Behavior and Research, 24(2), 333-358.
27. Harshana, K., & Verena, T. R. (2014). Women in the Informal Sector in Mauritius: A Survival Model, Equality, Diversity and Inclusion: An International Journal, 33(8), 750-763.
28. Hawawini, G., Subramanian, V., & Verdin, P. (2003). Is Performance Driven by Industryor FirmSpecific Factors? A New Look at The Evidence. Strategic Management Journal, 24(1), 1-16.
29. Haynie, J. M., Shepherd, D. A., & Patzelt, H. (2012). Cognitive Adaptability and an Entrepreneurial Task: The Role of Metacognitive Ability and Feedback. Entrepreneurship Theory and Practice, 36(2), 237-265.
30. Hayton, J. C. (2003). Strategic Human Capital Management in SMEs: An Empirical Study of Entrepreneurial. Human Resource Management, 42(4), 375.
31. Kaur, H., & Bains, A. (2013). Understanding The Concept of Entrepreneur Competency. Journal of Business Management and Social Sciences Research, 2(11), 31-33
32. Kim, K. C., ElTarabishy, A., & Bae, Z. T. (2018). Humane Entrepreneurship: How Focusing on People Can Drive a New Era of Wealth and Quality Job Creation in a Sustainable World. Journal of Small Business Management, 56, 10-29.
33. Kozan, M. K., Oksoy, D., & Ozsoy, O. (2012). Owner Sacrifice and Small Business Growth. Journal of World Business, 47(3), 409-419.
34. Krasniqi, B. A. (2007). Barriers to Entrepreneurship and SME Growth in Transition: The Case of Kosova. Journal of Developmental Entrepreneurship, 12(1), 71-94.
35. Kraus, S., Rigtering, J. C., Hughes, M., & Hosman, V. (2012). Entrepreneurial Orientation and The Business Performance of SMEs: A Quantitative Study from The Netherlands. Review of Managerial Science, 6(2), 161-182.
36. Liedholm, C. E., & Mead, D. C. (2013). Small enterprises and economic development: the dynamics of micro & small enterprises. Routledge.Abingdon.UK
37. Liu, G., Pang, L., and Kong, D. (2017). Effects of human capital on the relationship between export and firm innovation. Chinese Management Studies, 11(2), 322-345.
38. Lockett, A., & Thompson, S. (2001). The Resource-Based View and Economics. Journal of Management, 27(6), 723-754.
39. Lucas, D. S., & Fuller, C. S. (2017). Entrepreneurship: Productive, unproductive, and destructive—Relative to what? Journal of Business Venturing Insights, 7, 45-49.
40. Machirori, T. and Fatoki, O. (2013). The impact of firm and entrepreneur’s characteristics on networking by SMEs in South Africa. Journal of Economics, 4(2), 113-120.
41. Mahajar, A. J. and Yunus, J. M. (2012). Factors That Encourage Women Involvement in Smes in Pahang, Malaysia. The Journal of Human Resource and Adult Learning, 8(2), 33-41.
42. Mahmood, R. and Hanafi, 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.
43. Man, T. W., & Lau, T. (2000). Entrepreneurial Competencies of SME Owner/Managers in The Hong Kong Services Sector: A Qualitative Analysis. Journal of Enterprising Culture, 8(3), 235-254.
44. Man, T. W., Lau, T., & Chan, K. F. (2002). The Competitiveness of Small and Medium Enterprises: A Conceptualization with Focus on Entrepreneurial Competencies. Journal of Business Venturing, 17(2), 123-142.
45. Marett, E., Marler, L., & Marett, K. (2018). Socioemotional wealth importance within family firm internal communication. Journal of Family Business Management, 8(1), 22-37.
46. Martin, B. C., McNally, J. J., & Kay, M. J. (2013). Examining The Formation of Human Capital in Entrepreneurship: A Meta-Analysis Of Entrepreneurship Education Outcomes. Journal of Business Venturing, 28(2), 211-224.
47. Masakure, O., Henson, S., & Cranfield, J. (2009). Performance of Microenterprises in Ghana: A Resource-Based View. Journal of Small Business and Enterprise Development, 16(3), 466-484.
48. McConaughy, D. L., Matthews, C. H., & Fialko, A. S. (2001). Founding Family Controlled Firms: Performance, Risk, and Value. Journal of Small Business Management, 39(1), 31-49.
49. Mead, D. C., & Liedholm, C. (1998).The Dynamics of Micro and Small Enterprises in Developing Countries.World development, 26(1), 61-74.
50. Miah, NZ, Mia, L., Decentralization, Accounting Control and Performance of Government Organizations: A New Zealand Empirical Study. Financial Accountability and Management, 12(3), 173-189.
51. Mitchelmore, S., & Rowley, J. (2010). Entrepreneurial Competencies: A Literature Review and Development Agenda. International Journal of Entrepreneurial Behavior and Research, 16(2), 92-111.
52. Onetti, A., Zucchella, A., Jones, M. V., & McDougall-Covin, P. P. (2012). Internationalization, Innovation and Entrepreneurship: Business Models for New Technology-Based Firms. Journal of Management and Governance, 16(3), 337-368.
53. Osman, I., Ho, T. C., & Carmen Galang, M. (2011). The Relationship Between Human Resource Practices and Firm Performance: An Empirical Assessment of Firms in Malaysia. Business Strategy Series, 12(1), 41-48.
54. Packham, G., Jones, P., Miller, C., Pickernell, D., & Thomas, B. (2010). Attitudes towards Entrepreneurship Education: A Comparative Analysis. Education Training, 52(8/9), 568-586.
55. Panda, T. K. (2002). Entrepreneurial Success and Risk Perception among Small-Scale Entrepreneurs of Eastern India. Journal of Entrepreneurship, 11(2), 173-190.
56. Parida, V., Pesämaa, O., Wincent, J., & Westerberg, M. (2017). Network capability, innovativeness, & performance: a multidimensional extension for entrepreneurship. Entrepreneurship and Regional Development, 29(1-2), 94-115.
57. Parkman, I. D., Holloway, S. S., & Sebastiao, H. (2012). Creative Industries: Aligning Entrepreneurial Orientation and Innovation Capacity. Journal of Research in Marketing and Entrepreneurship, 14(1), 95-114.
58. Ramadani, V., Gërguri, S., Dana, L-P.and Tašaminova, T. (2013). Women Entrepreneurs in the Republic of Macedonia: Waiting for Directions. International Journal of Entrepreneurship and Small Business, 19(1), 95–121.
59. Rastogi, P. N. (2000). Knowledge Management and Intellectual Capital - The New Virtuous Reality of Competitiveness. Human Systems Management, 19(1), 39-48.
60. Razak, D. A., Abdullah, M. A., & Ersoy, A. (2018). Small Medium Enterprises (Smes) In Turkey And Malaysia A Comparative Discussion On Issues And Challenges. International Journal of Business, Economics and Law, 10(49), 2-591.
61. Reinartz, W., Haenlein, M., & Henseler, J. (2009). An empirical comparison of the efficacy of covariance-based and variance-based SEM. International Journal of Research in Marketing, 26(4), 332–344.
62. Reza Rajabi, Thomas Brashear-Alejandro, Cristian Chelariu, (2018). Entrepreneurial motivation as a key salesperson competence: trait antecedents and performance consequences. Journal of Business and Industrial Marketing, 33(4), 405-416,
63. Rosa, P., Carter, S., & Hamilton, D. (1996). Gender as a Determinant of Small Business Performance: Insights from a British Study. Small Business Economics, 8(6), 463-478
64. Salwa, A. H. F., Azahari, A. M., & Tamkin, B. J. (2013). Success Factors of Successful Micro-credit Entrepreneurs: Empirical Evidence from Malaysia. International Journal of Business andSocial Science, 4(5), 153-159.
65. Sambasivan, M., Li-Yen, L., Che-Rose, R., & Abdul, M. (2010). Venture Performance in Malaysia: Personal Initiative, Human Capital, and Competency Areas of Founding Entrepreneurs as Critical Success Factors. Journal of Small Business and Entrepreneurship,
66. Santandreu-Mascarell, C., Garzon, D., & Knorr, H. (2013). Entrepreneurial and Innovative Competences, Are They The Same?.Management Decision, 51(5), 1084-1095.
67. Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business Cases for Sustainability: The Role of Business Model Innovation for Corporate Sustainability. International Journal of Innovation and Sustainable Development, 6(2), 95-119.
68. Scuotto, V., Del Giudice, M., Bresciani, S. and Meissner, D. (2017). Knowledge-Driven Preferences In Informal Inbound Open Innovation Modes: An Explorative View On Small To Medium Enterprises. Journal of Knowledge Management, 21(3), 640-655.
69. Selamat, N. H., Abdul-Razak, R. R., Gapor, S. A., & Sanusi, Z. A. (2011). Survival through Entrepreneurship: Determinants of Successful Microenterprises in Balik Pulau, Penang Island and Malaysia. British Journal of Arts and Social Sciences, 3(1), 23-37.
70. Selvarajan, T. T., Ramamoorthy, N., Flood, P. C., Guthrie, J. P., MacCurtain, S., & Liu, W. (2007). The Role of human Capital Philosophy in Promoting Firm Innovativeness and Performance: Test of A Causal Model. International Journal of Human Resource Mana
71. Shane, S. (2000). Prior Knowledge and The Discovery of Entrepreneurial Opportunities. Organization Science, 11(4), 448-469.
72. Shane, S., & Venkatraman, S. (2000).The Promise of Entrepreneurship as a Field of Research.Academy of Management Journal, 25(1), 217–226.
73. Shepherd, D. A., & DeTienne, D. R. (2005). Prior Knowledge, Potential Financial Reward, and Opportunity Identification. Entrepreneurship Theory and Practice, 29(1), 91-112.
74. Shih, W.L. and Tsai, C.Y. (2016). The effects of knowledge management capabilities on perceived school effectiveness in career and technical education. Journal of Knowledge Management, 20(6),1373-1392.
75. Simpson, M., Padmore, J., & Newman, N. (2012).Towards a New Model of Success and Performance in SMEs.International Journal of Entrepreneurial Behavior and Research, 18(3), 264-285.
76. Simsek, Z. and Heavey, C. (2011). The Mediating Role of Knowledge-Based Capital for Corporate Entrepreneurship Effects On Performance: A Study of Small-to Medium-Sized Firms. Strategic Entrepreneurship Journal, 5(1), 81–100.
77. SME Annual Report. (2011). S.M.E. Annual Report 2010/2011: Leveraging Opportunities, Releasing Growth. National SME Development Council, SME Corporation, Kuala Lumpur, Malaysia official Website. Retrieved from http://www.smecorp.gov.my on June 12, 2016.
78. Snell, R., & Lau, A. (1994). Exploring Local Competences Salient for Expanding Small Businesses. Journal of Management Development, 13(4), 4-15.
79. Suddaby, R., Bruton, G. D., & Si, S. X. (2014). Entrepreneurship through a Qualitative Lens: Insights on the Construction and/or Discovery of Entrepreneurial Opportunity. Journal of Business Venture, 30(1), 1–10.
80. Tambunan, T. T. H. (2009). Women Entrepreneurship in Asian Developing Countries: Their Development and Main Constraints. Journal of Development and Agricultural Economics, 1(2), 027-040.
81. Thompson, J. E., Stuart, R., & Lindsay, P. R. (1996). The Competence of Top Team Members: A Framework for Successful Performance. Journal of Managerial Psychology, 11(3), 48-66.
82. Tundui, C., & Tundui, H. (2013). An Empirical Analysis of Social Capital and Enterprise Performance In Tanzania: The Case of Women Owned Businesses. International Journal Of Developing Societies, 2(1), 50-60.
83. Ucbasaran, D., Shepherd, D. A., Lockett, A., & Lyon, S. J. (2013). Life After Business Failure The Process and Consequences of Business Failure for Entrepreneurs. Journal of Management, 39(1), 163-202.
84. Ucbasaran, D., Westhead, P., & Wright, M. (2008). Opportunity Identification and Pursuit: Does An Entrepreneur’s Human Capital Matter?.Small Business Economics, 30(2), 153-173.
85. Ucbasaran, D., Westhead, P., Wright, M., & Flores, M. (2010).The Nature of Entrepreneurial Experience, Business Failure and Comparative Optimism. Journal of Business Venturing, 25(6), 541-555.
86. Ulhøi, J. P. (2005). The Social Dimensions of Entrepreneurship.Technovation, 25(8), 939-946.
87. Unger, J., Rauch, A., Frese, M., & Rosenbusch, N. (2011). Human Capital and Entrepreneurial Success: A Meta-Analytic Review. Journal of Business Venturing, 26(2), 341–385.
88. Wang, G., Dou, W., Zhu, W., & Zhou, N. (2015). The effects of firm capabilities on external collaboration and performance: The moderating role of market turbulence. Journal of Business Research, 68(9), 1928-1936.
89. Weick, K. (1996). Drop Your Tools: an Allegory for Organizational Studies. Administrative Science Quarterly, 41(2), 301–314.
90. Wiklund, J., & Shepherd, D. (2003). Knowledge-Based Resources, Entrepreneurial Orientation, and The Performance of Small and Medium-Sized Businesses. Strategic Management Journal, 24(13), 1307-1314.
91. Williams, C. C. and Youssef, Y. (2013). Evaluating The Gender Variations in Informal Sector Entrepreneurship: Some Lessons from Brazil, Journal Of Developmental Entrepreneurship, 18(1), 715–28.
92. Wirtz, J., Chew, P., & Lovelock, C. (2012). Essentials of Services Marketing. Singapore: Pearson Education South Asia Pte Ltd.
93. Wood, M. S., & McKinley, W. (2010). The Production of Entrepreneurial Opportunity: a Constructivist Perspective. Strategy Entrepreneurship Journal, 4(1), 66–84.
94. Wright, P. M., Gardner, T. M., Moynihan, L. M., & Allen, M. R. (2005). The Relationship Between HR Practices and Firm Performance: Examining Causal Order. Personnel psychology, 58(2), 409-446.
95. Zafar, A. and Mustafa, S. (2017). SMEs and its role in economic and socioeconomic development of Pakistan. International Journal of Academic Research in Economics and Management Sciences, 6(4), 2226-3624.
96. Zahra, S. A., & Nambisan, S. (2012). Entrepreneurship and Strategic Thinking in Business Ecosystems. Business Horizons, 55(3), 219-229.
97. Zimmerer, W. T., Scarborough, N. M. and Wilson, D. (2008). Essential of Entrepreneurship and Small Management. Upper Saddle River N.J: Prentice Hall.