The Role of Entrepreneurship Orientation in Mediation of Social Capital and Innovation to Augment Marketing Performance of Small Medium Enterprises (SMEs)

Abstract

In this study, we focus on the importance of entrepreneurship to mediate social capital and innovation, thus improving the marketing performance of Small and Medium Enterprises (SMEs). We took the research sample from exporting SMEs members of the East Java SMEs Facebook group with a total number of members of 19,100 accounts. In addition, we took 100 exporting SMEs as samples based on the Slovin formula. The partial Least Squares (PLS) method was used to analyze the research result. The study results are divided into two parts of a correlation: direct and indirect correlation. 1) Direct correlation analysis shows that from 5 correlations, 3 correlations have a significant effect: social capital variables on innovation and entrepreneurial orientation; the variable of entrepreneurial orientation on marketing performance. Furthermore, two correlations do not affect marketing performance: innovation and social capital. 2) The indirect correlation analysis shows two significant correlations: the social capital positive association with the marketing performance with the aid of both innovation and entrepreneurial orientation, and the social capital positive association with marketing performance solely via entrepreneurial orientation. Furthermore, there is 1 correlation that has no effect, namely: social capital variable in marketing performance through innovation. From these results, we can demonstrate that entrepreneurial orientation is crucial to enhancing the influence of innovation and social capital on marketing performance. This research finding has two implications: First, the research results can be used as a reference for applying innovation, social capital, and the entrepreneurial orientation of East Java's exporting SMEs. Second, the study results will guide local governments in making policies to assist exporting SMEs in improving their marketing performance.