Purpose This study aims to examine the effect of entrepreneurial resources on micro businesses and the mediating role of innovation capability in this relationship. Design/methodology/approach A structured questionnaire was used to gather data for this quantitative study, which adopted partial least squares structural equation modelling to test the hypotheses on a sample of 455 women entrepreneurs in Malaysia. Findings The results reveal that entrepreneurial resources, particularly technical resources, positively and significantly affect innovation capability and enhance business performance. Furthermore, innovation capability mediates the relationship between entrepreneurial resources and microbusiness performance. Research limitations/implications This study contributes theoretically by combining six entrepreneurial resources into a single framework in light of the resource-based view and finance-based theory. The results corroborate the effects of entrepreneurial resources on the performance of women’s micro businesses and the mediating role of innovation capability in this relationship. However, the cross-sectional design study limited this study’s ability to engage respondents in a more in-depth analysis of pertinent themes. Practical implications This research provides guidance and directions for business managers/owners and decision makers to adopt and improve entrepreneurial resources to achieve superior performance and competitive advantages. It presents evidence of innovation capability’s significant role in converting resources into innovative outcomes and creating value. Additionally, it is useful for policymakers to design development programmes for micro, small and medium enterprises (MSMEs) in emerging markets. Social implications This study highlights the value of innovation with a variety of entrepreneurial resources for women business owners that significantly impact Malaysian employment and gross domestic product and may have a positive social impact by enhancing social life in local communities. The nation’s unique context of multiracial and ethnic groups reflects Malaysia’s truly Asian ethnic composition. Originality/value This study fills the research gap by offering empirical evidence of the mediating role of innovation capability in the link between entrepreneurial resources and microbusiness performance, thus significantly contributing to emerging markets worldwide, where women-owned micro businesses are increasingly generating value and employment.

Micro-, small, and medium enterprises (MSMEs) play a crucial role in the economic growth of emerging markets. This study examines the effect of entrepreneurial leadership (EL) on the entrepreneurial success (ES) of MSMEs in Malaysia through the mediating effect of entrepreneurial opportunity recognition (EOR) and innovation capability (IC). To examine the proposed mediation model, we utilized a structured questionnaire to collect data for this quantitative research. Partial least square-structural equation modeling (SEM) was used to test the hypothesis on a sample of 401 micro-business owners/managers in Malaysia. The findings reveal that an EL has a significant positive effect on ES but is conditional on the mediating role of EOR and IC. However, the results show that EOR and IC partially mediate the link between EL and ES. Additionally, EOR and IC serially mediated the relationship between EL and ES. This research has valuable contributions to MSMEs by explaining EL, EOR, and IC’s critical role in gaining competitive advantage and achieving success. This research develops a theory-based mediation model to demonstrate how the EL and ES of MSMEs are related. Further, the model in this study adds to the body of knowledge by examining whether or not serial mediation occurs through EOR and IC. Hence, this research sheds new light on the relationship between EL and ES.