Impact of Managerial Ability on MSME Performance: The Mediating Roles of Entrepreneurial Motivation and Business Climate in Bandar Lampung City's Culinary Sector
Abstract
This study explores the influence of managerial ability on the performance of Micro, Small, and Medium Enterprises (MSMEs) in the culinary sector of Bandar Lampung City, Indonesia. Employing a quantitative approach with Structural Equation Modeling (SEM) on data from 60 MSMEs, the research identifies both direct and mediating effects of managerial skills on MSME performance. Key findings reveal that managerial ability significantly enhances MSME performance, entrepreneurial motivation, and the business climate. Specifically, a one-unit increase in managerial ability results in a 29.7% increase in MSME performance, a 77.4% rise in entrepreneurial motivation, and a 70% improvement in the business climate. Furthermore, entrepreneurial motivation and business climate mediate the relationship between managerial ability and MSME performance, contributing to a 32.4% and 41.1% increase in performance, respectively. The total effect coefficient of managerial ability on MSME performance is 0.814, underscoring its substantial impact. The study underscores the importance of integrating managerial skills with entrepreneurial motivation and adapting to a favorable business environment to enhance MSME performance. Future research is recommended to explore additional mediating factors.
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