Entrepreneurial Leadership, Training, Absorptive Capacity on Business Performance: The Mediating Role of Innovation Capability

Abstract

Aims: This study aims to examine how entrepreneurial leadership, training, absorptive capacity, and innovation capability can affect business performance, as well as the influence of the mediating effect on innovation capability. Study Design: Quantitative. Place and Duration of Study: Sample: This study used a sample of 200 respondents from the Banyumas, Purbalingga, Banjarnegara, Cilacap, and Kebumen districts. The data collection technique used a questionnaire with a multistage random sampling method. Methodology: Statistical analysis used the Partial Least Square Structural Equation Modeling (PLS-SEM) method, which uses an inner model, an outer model, and hypothesis testing. Results: This study's results indicate that entrepreneurial leadership, training, absorptive capacity, and innovation capability have a significant impact on business performance. Likewise, the variable innovation capability as mediation of entrepreneurial leadership, training, and absorptive capacity significantly impacts business performance. Conclusion: This research implies that an organization or MSME must pay attention to and optimize business potential by considering entrepreneurial leadership, training, absorptive capacity, and innovation capability to influence business performance improvements and creating a vision to identify and take advantage of new business opportunities by paying attention to innovation and preparing the workforce to deal with technological changes. This can drive economic growth by increasing business efficiency and market competitiveness.