Mediating role of competitive advantage on the relationship between product innovations, digital entrepreneurship and entrepreneur alertness towards business performance of Bumiputera SME’s

This study focuses on the business performance of Bumiputera-led small and medium enterprises (SMEs) in Malaysia. The objective of this study is to examine the relationship between product innovation (IN), digital entrepreneurship (DE), and entrepreneur alertness (EA) with business performance (BP). In addition, competitive advantage (CA) takes the role of a mediator. This study applied the resource-based view (RBV) theory was used as a theoretical model. A self-administered questionnaire was distributed to 430 SME owners in the Klang Valley, including Kuala Lumpur, Putrajaya, and Cyberjaya, Malaysia. The data from the 271 completed questionnaires were analysed using Partial Least Squares-Structural Equation Modelling (PLS-SEM). The results show a positive and significant relationship between IN and BP, which CA mediates. However, DE and EA, mediated by CA, show insignificant results in this relationship with BP. Similarly, the relationship between CA and BP shows a relatively weak relationship. Theoretically, this study has proved the support of the RBV theory for the relationship between IN, DE, EA, and CA on SMEs’ business performance. This result has practical implications for owners/managers of Bumiputera-owned SMEs and policymakers. In addition, the limitations of the study and recommendations for future research were also presented.