The purposes of this study are: (1) to test the effect of market sensing capability on SMEs performance, both directly and indirectly (product innovativeness success as intervening variable); (2) to test the effect of entrepreneurial orientation on SMEs performance, both directly and indirectly (product innovativeness success as intervening variable); (3) to test the effect of market sensing capability on speed to market; and (4) to test the effect of speed to market on SMEs performance. This research sampled 168 SME owners or managers. This study uses Structural Equation Model to test the hypothesis and uses AMOS 21 in data analysis. The result of this study shows that entrepreneurial orientation and product innovativeness have positive and significant effect on SMEs performance but market sensing capability and speed to market have no significant effect. Market sensing capability has significant effect on speed to market and product innovativeness success but entrepreneurial orientation has no significant effect on product innovativeness success. Product innovation success becomes the best mediating variable of markets sensing capability on SMEs performance than entrepreneurial orientation on SMEs performance. The findings of this study provide two contributions to the entrepreneurship research. First, in the leather and furniture industry, the most important factor in achieving performance of SMEs is product innovation success. Second, entrepreneurial orientation is still predictive in improving performance.
ISSN 0116-7111 (Print)
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