Ngatno, Ngatno and Apriatni, Endang P and Widayanto, Widayanto (2016) Human Capital, Entrepreneurial Capital and SME's Performance of Traditional herbal Industries in Central Java, Indonesia : The mediating Effect of Competitive Advantage (Dr.Ngatno, Apriatni EP, Widayanto). Archives of Business Research, 3 (4).

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Abstract

This study provides new insights by examining effects of human capital and
entrepreneurial capital on competitive advantage and performance. The
samples of this study were owners of SME’s traditional herbal industries in
Central Java, Indonesia. Thirty-five questionnaires were distributed, and they
made 32 (91.43%) response rate. The data was analyzed using Generalized
Structured Component Analysis (GSCA). The results reveal that: a) human
capital and entrepreneurial capital have a positive effect on competitive
advantage; b) human capital and entrepreneurial capital do not directly affect
SMEs’ performance; c). Competitive Advantage fully mediates between human
capital and entrepreneurial capital on SMEs’ performance. The findings offer
an insight for the SMEs in traditional herbal industries: to increase their
performance the human and entrepreneurial capital need to be developed.
Limitations of this study, first, only small tradtional herbal industries were
investigated. The small industries which are more specific in nature, such as
the batik, toys, and craft SMEs, may result in different relations between the
constructs of the models; second, the data was collected in a single central area
of traditional herbal industry. There was no evidence of sampling bias, but
future studies would benefit from inclusion of a wider geography scope; third
the findings of this study also underscore the need for researchers to examine
other factors which may also be antecedents of the SMEs’ performance and
competitive advantage.

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