MEDIATING EFFECT OF ENTREPRENEURIAL COMPETENCIES ON THE RELATIONSHIP BETWEEN ENTREPRENEURIAL ORIENTATION AND SMALL AND MEDIUM SCALE ENTERPRISES PERFORMANCE IN NIGERIA

Abstract

In the current technology driven era, Small and Medium Scale enterprises (SMEs) have emerged
as very essential economic catalyst in the development and industrialization bid of most developed
and developing economies such as Nigeria. Given the economic realities in Nigeria, the country
must constantly create new jobs and diversify the industrial and commercial sector to take
advantage of human and natural resources through entrepreneurship. The present research aims
to identify the role of entrepreneurial competencies on the relationship between entrepreneurial
orientation and SMEs performance in Nigeria. Questionnaire was distributed to the
owners/managers of registered SMEs in Kaduna State. Structural Equation Model was used to
analyzed the data using Partial Least Square Method (PLS 2). The result based on the findings
shows that innovativeness has positive and significant effect on SMEs performance, just as risk
taking and entrepreneurial competencies has positive and significant effect on the performance of
SMEs. However, proactiveness and the performance of SMEs are not significantly related. On the
mediation relationships, entrepreneurial competencies only mediate the relationship between risk
taking and performance of SMEs. The study therefore concludes that entrepreneurial
competencies do not mediate other relationships in the study. Finally, the study recommends that
Government of Nigeria and other stakeholders need to focus their attention on issues that are
related to entrepreneurial development of SMEs such as, giving them qualitative training and
retraining, provision of loan facilities at a low interest. On the other hand, SMEs owner/managers
should attach more importance to the implementation of innovative and risk-taking behavior in
order to increase their performance.