Mediating role of self-efficacy between entrepreneurial traits and venture growth

Abstract

Small and medium sized enterprises (SMEs) are important for economic development of any country. As far as the small and medium sized enterprises are concerned, individual entrepreneurs play a significant role in terms of innovations, economic growth, and contribution to employment growth. Venture growth is a vital factor to achieve these outcomes. Growth of a venture is a prime purpose of a business. However, some ventures report higher growth whereas others do not. There are different explanations about the venture growth. Personality traits of entrepreneurs, organizational factors and environmental factors have been studied by the entrepreneurship researchers as causes of new venture success. As far as the venture growth is concerned the mediating role of self-efficacy between entrepreneurial traits and venture growth is also important. At the same time the mediating role of self –efficacy between entrepreneurial traits and venture growth has not studied much by the researchers. Therefore, this research study focused on to find out the mediating role of self-efficacy between entrepreneurial traits and venture growth. Several hypotheses were formulated in this regard using theory and empirical studies. Growth was measured using sales growth and employment growth. In this regard the study was conducted of three hundred (300) small and medium sized enterprises registered in Gampaha District. Data was collected by using a self-administered questionnaire. The respondents to the questionnaire were entrepreneurs of small and medium sized enterprises. The data were analyzed at three levels. Descriptive analysis, mean and standard deviation, were the statistical techniques used under univariate analysis. Correlation analysis was used under the bivariate analysis, while multivariate analysis was deployed by using the statistical technique of multiple regression analysis. The results show that the self-efficacy mediates the entrepreneur’s passion for work and venture growth with respect to employment growth. However, results show that self-efficacy do not mediate the tenacity of the entrepreneur and venture growth. But the results confirmed that the self-efficacy mediates the relationship between new resource skill and venture growth. Finally, results do not show any significant relationship between risk taking propensity and venture growth.