Financial Availability on Performance of MSMEs: Mediation of Entrepreneurial Orientation and Business Actor’s Rationality

Syti sarah maesaroh; Agus Rahayu; Lili Adi Wibowo; Eeng Ahman

doi:10.21831/economia.v19i1.48918

Financial Availability on Performance of MSMEs: Mediation of Entrepreneurial Orientation and Business Actor’s Rationality

Syti sarah maesaroh, Faculty of Economics and Business Education, Universitas Pendidikan Indonesia, Indonesia
Agus Rahayu, Faculty of Economics and Business Education, Universitas Pendidikan Indonesia, Indonesia
Lili Adi Wibowo, Faculty of Economics and Business Education, Universitas Pendidikan Indonesia
Eeng Ahman, Faculty of Economics and Business Education, Universitas Pendidikan Indonesia

10.21831/economia.v19i1.48918

Abstract

This study investigates how business actors' entrepreneurial orientation and rationality affect MSMEs' performance, as well as how the availability of financing affects that performance. Using a random sampling technique, we surveyed 195 MSMEs from various business fields. The data were analyzed using structural equation modeling and AMOS and SPSS software. We discovered that the mediation of entrepreneurial orientation and decision-making rationality significantly impacted the relationship between financial availability and performance. Adequate funding encourages an entrepreneurial mindset and the development of innovations that improve overall performance. The study suggests that business actors improve their capabilities, including managerial skills, practices, and procedures in the financial sector. When adequate funds are available, they could be used to improve performance. The study adds to the dynamic capability theory by demonstrating that MSMEs must be able to integrate, construct, and reconfigure their financial resources in the face of rapid environmental changes.

Keywords

Financial, Performance, Rational, MSMEs

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DOI: https://doi.org/10.21831/economia.v19i1.48918