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Islamic Leadership, Innovation, Competitive Advantages, and Performance of SMEs in Indonesia

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Abstract

Investigate the relationship between Islamic leadership, innovation, competitive advantages, and performance of small- and medium-sized enterprises (SMEs) in Indonesia, especially investigate the mediation effect of innovation and competitive advantage in the relationship between Islam leadership and the performance of SMEs. The focus of this study is the SME (small and medium entrepreneurs) of typical food products of Riau domiciled in Riau. The population in this study was all the SMEs, and the sample size is 160 respondents. The method used to analyze the data in this study is WarpPLS [1], for inner model (hyphothesis testing for structural model) and outer model (measurement model for unobservable variables). Sobel test (under WarpPLS model) was used to test whether a variable is a variable mediating the relationship between endogenous variables and exogenous variables. The conclusions of this research are the following: (1) Islamic leadership does not have a direct effect on the performance of SMEs, (2) Islamic leadership has an indirect effect on the performance of SMEs, with competitive advantages and innovation as mediation variables. Originality for this paper shows the following: (1) mediation effect (using Sobel test) of competitive advantage and innovation in the relationship between Islam leadership and the performance of SMEs and (2) location of study (no previous research for this relationship): SME in Riau.

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  1. Universitas Islam Negeri Sultan Syarif Kasim, Pekanbaru, Indonesia

    Ilyas Husti & Mahyarni Mahyarni

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Husti, I., Mahyarni, M. Islamic Leadership, Innovation, Competitive Advantages, and Performance of SMEs in Indonesia. East Asia 36, 369–383 (2019). https://doi.org/10.1007/s12140-019-09325-7

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