Investigation of the Contribution of Entrepreneurial Behavior to Firm Growth using PLS-SEM Approach
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Bottled water SMEs in South Sulawesi face significant challenges in achieving sustainable growth due to high competition and low product differentiation. The objective is to analyze how entrepreneurial behavior contributes to firm growth within this context. The study is grounded in entrepreneurship and strategic management theories. Entrepreneurial Orientation reflects innovativeness, proactiveness, and risk-taking behavior, Strategic Innovation represents strategic improvements in operations and distribution, Entrepreneurial Leadership captures the leader’s role in enabling innovation, and Firm Growth refers to business expansion and performance improvement. The framework proposes that entrepreneurial orientation influences firm growth directly and through strategic innovation, while leadership strengthens the orientation–innovation relationship. A quantitative approach using PLS-SEM was employed. Data were collected from bottled water SME owners and managers through structured questionnaires. Reliability and validity tests were conducted, followed by structural model evaluation and hypothesis testing. Triangulation through follow-up interviews with SME representatives was conducted to enhance credibility. The findings show that Entrepreneurial Orientation significantly affects Strategic Innovation and Firm Growth. Strategic Innovation significantly influences Firm Growth and mediates the relationship between Entrepreneurial Orientation and Firm Growth. Entrepreneurial Leadership shows a positive but relatively weak moderating effect on the relationship between Entrepreneurial Orientation and Strategic Innovation. In conclusion, firm growth in bottled water SMEs is primarily driven by the firm’s ability to translate entrepreneurial orientation into strategic innovation. Leadership support enhances this process, although its moderating influence is limited. The study contributes to understanding how entrepreneurial strategy drives growth in emerging market SMEs.
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