The Impact of Entrepreneurial Orientation on SMEs
Performance in West Java Province: Market
Orientation as Mediating Variable
Vigory Gloriman Manali*, Fauziyah Adzimatinur, Faishal Rahimi
Universitas Kuningan, Kuningan, Indonesia
{vigoryglo@uniku.ac.id}
Abstract In this study, we examine the effect of Entrepreneurial Orientation on the
performance of SMEs by using the mediating impact of Market Orientation. We used
respondents from four regions in the West Java Province of Indonesia. After the
questionnaires were distributed using the purposive sampling method, a total of 188
respondents were obtained. The analytical technique used in this study was Structural
Equation Modeling (SEM). From the results of the study, it was found that orientations
can affect the performance of SMEs. Entrepreneurship Orientation and Market
Orientation can affect the performance of SMEs. From testing the mediating effect, it is
found that Market Orientation can mediate the relationship between Entrepreneurial
Orientation and the performance of SMEs. The research results can provide information
for entrepreneurs who want to explore Entrepreneurial Orientation and Market
Orientation.
Keywords: Mediating Variable; Market Orientation; SEM
1 Introduction
Amid technological developments and uncertain times, SMEs are required to survive and
be sustainable. Entrepreneurship is needed to survive [1, 2]. Most businesses usually fall into
the SME business category [3]. SMEs have facilitated the dynamics in most business
organizations in developing countries because they create new jobs and generate additional
capital for the business [4]. Researchers are always interested in finding answers to what
makes some entrepreneurs more successful than others, particularly in small and medium-
sized enterprises (SMEs) from developing countries who usually struggle with survival [5].
Indonesia is one of the developing countries in the Southeast Asia region, and much
research on the performance of SMEs has been carried out [6-11]. Several researchers
revealed the importance of Entrepreneurial Orientation in influencing the performance of
SMEs [6, 8, 9, 11]. However, several research results related to the effect of Entrepreneurial
Orientation on SME performance still found contradictive [12-16]. [17] employ three
dimensions (proactiveness, risk-taking, and competitive aggressiveness) into Entrepreneurial
Orientation. The results show that proactiveness and competitiveness have a significant and
positive impact on the performance of SMEs, while risk-taking has a significant and negative
effect on the performance of SMEs. Furthermore, referring to research [13], Entrepreneurial
Orientation has a positive and significant direct impact on the performance of SMEs. Then,
research conducted by [14] shows that Entrepreneurial Orientation has a positive and
UNISET 2021, December 02, Kuningan, Indonesia
Copyright © 2022 EAI
DOI 10.4108/eai.2-12-2021.2320216